Organisational Resilience In the Face Of Covid – Part 2
As the world starts returning to some semblance of normalcy with travel restrictions being eased and bars and restaurants opening again in multiple countries, the question on many people’s minds is: What is the new normal? And how will this impact our ability to deal with future crises? As experts in sustainability, we at Nexio Projects strive to passionately shape the future for the better. This is, after all, the purpose of the entire sustainability movement. The long-term impact that COVID-19 will have on our society therefore has significant relevance to our work but is of course also relevant to everyone – from individuals who have lost their jobs to big tech companies whose products are suddenly in huge demand. The pandemic has impacted almost all sectors of society on many levels and much can be said about it, so below we have summarised the latest findings on how it might shape the future of consumers, urban spaces and energy, through the lens of sustainability.
Consumers – Buying less but buying better
The pandemic has demonstrated our fragility as a society and our unpreparedness for crises that disrupt our way of living. But how different would things be had we fully prepared for the pandemic? This question is on many people’s minds and will certainly influence our attitude and behaviour towards other impending crises.
According to a survey by consulting firm Kearney, nearly half of consumers surveyed say the pandemic has made them more concerned about the environment. They also found that the number of consumers that took the environment into consideration when making purchasing decisions jumped from 71% in 2019 to 83% in April of this year1. Although this was already a trend pre-COVID, it shows that the importance of sustainability remains a priority among consumers and that human and planetary health are viewed as being intertwined. An interesting reason for these findings could be the small glimpses we were given of a less polluted world as the lockdown resulted in smog-less skies and cleaner waterways. Perhaps this also indicates that we as a society do not want to deal with another crisis in future and are now more ready than ever to put our money where our mouths are.
So what does this mean for businesses? A brand trust report by Edelman found that 62% of consumers believed that their country will not endure the pandemic without brands playing an active role3. It is very likely that this sentiment will spill over to other issues such as climate change and racial injustice once the worst of the pandemic is over. This means that consumer expectations regarding sustainability will be higher than ever. Coupled with the impact on our economies, people are likely to make more informed purchases and will want to buy less but buy better. As a brand, it is therefore vital to shift to more sustainable business practices and provide the transparency that customers demand.
Urban spaces – Home offices, healthier cities
Infectious diseases have a long history of shaping urban spaces, such as the mid-19th century sanitation systems developed in response to cholera outbreaks, and there is no doubt that the current pandemic will be no different. Urban design plays a key role in promoting public health and now, more than ever, designers will need to prioritise design features that reduce the spread of infections. With worldwide stay-at-home measures that have been in place for several months, many companies have been rethinking the need for office space. Major tech companies such as Twitter and Facebook have already announced that employees can continue working from home permanently. A study by the University of Chicago found that as many as 37% of US jobs could potentially be done remotely4.This will no doubt have a big influence on employee’s appreciation for their homes and where they live, which will have an impact on property markets as commuting distances becomes less important for many. As a knock-on effect, congestion and pollution within cities could decrease as less employees travel to work via personal and public transport. Workspaces are set to change drastically with short-term fixes, as lockdown restrictions start easing, and permanent long-term design changes. Measures like hygiene stations, contactless bathroom facilities, and physical barriers are being implemented within offices worldwide as employees start returning to work.
As people start spending more and more time at home, green spaces will become vital aspects of urban design. In the past, many of these spaces were designed for programmed activities tied to events or restaurants. In the future, these spaces will become a destination for safe social interaction and connection to nature. During the pandemic, places like plazas and parks have been filled with people where this was allowed, even in the absence of any planned activities. With reduced traffic, we could also see wide streets being closed off to fill the same purpose, as people crave the social interaction that they miss out on by working from home.
Energy – An opportunity within the crisis
The energy sector was one of the hardest hit by the pandemic. Oil prices hit historical lows due to oversupply and a collapse in demand as nations went into lockdown. Overall, it is estimated that global energy demand will contract by 6% in 2020 and that the impact of the pandemic will be more than seven times larger than the impact of the 2008 financial crisis5. The supply of renewable energy equipment was disrupted as manufacturers shutdown temporarily. The short to medium effects of this will be reduced investment in energy-efficiency where energy prices have dropped in line with the oil price, and a slow down in the energy transition to renewables due to supply chain constraints. What this means in the long term is harder to predict.
Governments worldwide are drawing up stimulus packages to counter the economic damage caused by the pandemic, and these offer an excellent opportunity to accelerate investments in clean energy. The EU, for example, has earmarked 25% of the €750 billion recovery fund for climate action6. Technologies, such as wind and solar, are not only mature and reliable, they have also been proven to be cheaper than dirty alternatives such as coal in many cases. According to the International Energy Agency (IEA), governments drive more than 70% of global energy investments7. With the expectation of green strings being attached to recovery plans, analysts are predicting increased investment in renewables. The IEA’s Annual Energy Outlook Report estimates that with $1trillion of investment over each of the next three years, global energy-related CO2 emissions could end up falling by 14% over the same period and would make 2019 the definitive peak in global emissions. This investment is equivalent to 0.7% of global GDP and would create 9 million jobs across several related sectors.
The second half of 2020 will significantly shape the energy sector for the foreseeable future but will depend on the potential of a 2nd wave of infections and the recovery of supply chains. Global energy demand is expected to return to previous levels but the hope, however, is that governments take this opportunity to speed up our transition to clean energy sources. How close we will come to the needed $1trillion investment remains to be seen as governments are forced to balance recovery spending between the energy transition, short-term social support, corporate bailouts, and COVID-related healthcare measures, amongst many others.
There is no doubt that the world will not return to the ‘old normal’ once we gain control over COVID-19. Fortune magazine surveyed the CEOs of the 2020 Fortune 500 list and found that over 82% agreed that nationalism will rise and global supply chains will become less common, and over 91% agreed that business travel will become less frequent8. It became abundantly clear how dependent we are on the limits of our healthcare facilities – we were willing to put entire economies on hold so that they could keep up with infections. How many other weak links exist within our societies that just need a crisis to bring them to light? A sustainable society is a resilient society, this can hardly be disputed, and whatever new normal might be on the horizon, there is no doubt that it better be a sustainable one if we are to survive the next inevitable crisis.
Read part 1 of this Covid blog here in order to get a full understanding of the current crisis.