With the economic shock of COVID, companies of all sizes are reevaluating their resiliency and preparedness to face a similar crisis. A new player is entering the scene on securing resiliency: sustainability. COVID has changed, and arguably accelerated, the role of sustainability as resiliency in the face of crisis. Here’s how an integrated sustainability strategy might be the key to future-proofing your company against a similar crisis.
1. Companies with integrated sustainability bounced back faster
This crisis has revealed that companies with integrated sustainability are more agile and able to quickly respond and adapt. Recent analysis by BlackRock shows that corporations considered to be more committed to environmental, social and governance (ESG) issues have fared far better than others so far during the COVID-19 crisis. “As we recover from the pandemic, businesses around the world will be looking to rebuild in a way that puts their people first and protects the communities and the environment on which they rely,” says Chris Turner, managing director of B Lab in the U.K.
2. Sustainable funds outperform conventional funds in COVID downturn
Investors continue to be bullish about green investments and sustainable products, and sustainable funds, stocks and bonds performed better during the crisis than portfolios without a focus on environmental, social and governance (ESG) factors, according to a report by the Morgan Stanley Institute for Sustainable Investing. In fact, in just the first four months of 2020, investors poured a record $12.2 billion into ESG funds.
According to an analysis from Jon Hale, Global Head of Sustainable Investing Research at Morningstar, sustainable equity funds weathered the downturn better than equity funds, with 58% of sustainable equity funds ranking in the top half of Morningstar categories and nearly a third ranking in the top quartile.
ESG funds historically outperform the market, but this shows resilience and proof that investing in impact even in a downturn isn’t just the right thing to do, its good business.
3. Sustainability is top of mind
It seems like COVID is the only thing in our news feeds, but Americans are thinking about sustainability just as much if not more. In a new study, Genomatica reports that “sustainability has moved from a fringe preference into a core imperative across American life,” with 85% of Americans reporting they’ve been thinking about sustainability the same amount or more during the COVID-19 pandemic.
Over half of those who thought about sustainability even more responded that they wanted brands to prioritize sustainability even while facing other issues. We can’t wait for the next pandemic to hit before we begin integrating sustainability – we must start now to build in resiliency before it’s too late.
4. Underscoring the importance of partnership
One thing COVID has made very clear is that no one can survive a crisis like COVID or the climate crisis alone. As Francesca Viliani, Director of Public Health and co-Head of Sustainability of International SOS, argues, it’s time to address the interconnectedness of the environment, social, financial, and public health issues that have been traditionally considered separate, and create strategies that address these problems holistically.
Collaboration is key especially among corporations because we cannot meet sustainability goals with just one or two invested players. Just as we have leaned on each other to survive this pandemic, partnerships are key to making real progress on integrated sustainability strategies and being better prepared for the next crisis.