Blog article

The business response to COVID-19 and building back better


by Jessica Fries, Executive Chair, Prince’s Accounting for Sustainability Project (A4S)

2 July 2020

The partnership between the Prince’s Accounting for Sustainability Project (A4S) and ICMIF is one founded on shared values and shared purpose and we hope to encourage more of our member organisations to become involved in the work of the A4S as it expands on a global basis. The role for the finance community in achieving a sustainable world is critical and mutuals and cooperatives are ideal candidates to become actively involved in this work. Therefore, we are delighted to share this guest blog by Jessica Fries, Executive Chair, A4S with you now.

While the battle against COVID-19 is far from over, as governments around the world take careful steps to ease the lockdown restrictions, thoughts are increasingly turning to the future, beyond the crisis response, towards recovery and the shape of the economy that might emerge. A key question is how do we build back better? 

Before the pandemic struck, the climate crisis was front of mind for many, recognising that it presented an existential threat to humanity unless urgent action was taken. That threat has not disappeared. The International Energy Agency estimates that greenhouse gas emissions might fall by 8% this year, driven by the almost complete shutdown of much of the global economy in the past few months. This reduction is similar to that which the United Nations Environment Programme estimates is required every year over the next decade to keep temperature increases to less than 1.5°C. This fact underlines the complete rewiring of the economy that is required to address the climate crisis. At the same time, the pandemic has shone a spotlight on the many other social and environmental challenges faced, which there may be ways to address as part of actions taken over the coming months.

At A4S, we are working with the finance and accounting community around the world to identify lessons from the crisis, and the practical actions that can be taken to build resilience, address environmental and social risks and, ultimately, achieve the UN’s Sustainable Development Goals.

Speaking to CFOs, Chairs and other members of our networks from around the world across all sectors of the economy, there have been a number of common themes emerging. These themes provide insight into the principles that will help us to build back better. 

Emerging themes to shape building back better


Focusing on the things that matter

A crisis, such as the one we are currently living through, helps to galvanise effort in a way that little else can. It forces us to confront challenges and cut through barriers with a ruthless focus on finding a solution. Other risks, which might normally take a long time to analyse carefully and find ways to mitigate, pale into insignificance and we find solutions that are good enough in an incredibly short time. An example is the data sharing agreements that the major supermarkets were able to put in place with the UK Government, to enable them to prioritize deliveries to vulnerable customers, agreed in little more than a day or two, compared to the months that similar discussions might have taken in the past. Many individuals and organisations shifted their focus to think about what resources they had that could help respond to the crisis, whether donating vacant office space, repurposing factories to produce PPE and sanitiser, or supporting volunteer efforts. Examples exist in ‘pre-COVID’ life, but very much in the margins.  

A stakeholder, purpose-driven mindset

Last August, the Business Roundtable released its statement on the purpose of a corporation. It underlined a continuing trend towards a stakeholder view of the world. The pandemic has put these kinds of commitments to the test, revealing those organisations which are operating as purpose-driven, sustainable businesses and those which are not. Looking across our CFO Leadership Network, there have been some inspiring examples, most immediately focused on supporting people in their organization, along their supply chains and their customer base, and across communities. We are collating these examples and will be sharing insights over the coming weeks, starting with a focus on mental health and support for employees.  

A stakeholder mindset has been central to all of these examples, something that the crisis has reinforced. Boards and executives have systematically thought about how their decisions impact their employees, communities, customers, suppliers, and society as a whole. As well as being the right thing to do, a stakeholder-centric approach is likely to pay dividends in the future, building up social and human capital. 

Collaboration, innovation and trust

Much of the innovation that has occurred over the past months has been driven by collaborative thinking and partnership – something that we have seen in the past through many examples in our A4S Essential Guide series, but that has come to the fore through the crisis response. News ways of working, enabled by technology, are likely to stick. And the ability of global organisations, with hundreds of thousands of employees, to adopt new approaches almost overnight have reinforced a sense of the possible. To tackle the climate crisis, we will need a similar kind of accelerated innovation and rapid adoption. Applying these same principles as we look at ways to stimulate our economy in the months ahead will be vital.  

Collaboration depends on trust. Despite examples of companies acting with integrity and purpose, overall trust in business and business leaders has decreased. The Edelman Trust Barometer released in May shows that trust in CEOs has dropped from 50% to 29%. Only 38% believed business is doing well or very well at putting people before profits, or protecting their employees’ financial wellbeing and safeguarding their jobs. This is in comparison to the 78% who expect business to act to protect employees and the local community. 

Edelman also underlines the growing sense of unfairness in the system, with the pandemic highlighting the levels of inequality across different parts of society and the disproportionate impact that COVID-19 is having on those with the least. This provides a strong parallel with the climate crisis and the rapid loss of biodiversity, the human impact of which is also greatest on the poorest. 

Interconnectedness of our global economy 

The crisis has put a spotlight on the interconnectedness of the global economy, across social, economic and environmental dimensions, as well as along global supply chains. Many organisations that we have been working with have been mapping their global value chains to enable them to identify risks and opportunities associated with social and environmental issues, and to value their natural, social and human capital impacts and dependencies. We have seen examples where these insights have enabled them to be more resilient in the face of natural and human disasters. The pandemic has highlighted the vulnerability of global supply chains including the lack of information that many have into who their ultimate suppliers are and where they are based. This is driving many to question whether these supply chains need to be simplified and shortened in the future, even if this comes at a cost. In thinking through these questions, there are opportunities to increase resilience not only in response to the pandemic, but also to consider embedding greater environmental resilience and maximise positive social and human impacts. 

Businesses with strong sustainability credentials have fared better

Although it is too early to say with any real certainty, there is evidence to suggest that organisations which had taken steps to embed social and environmental risk and opportunity into their business model, governance, strategy and decision making – what we would think of as sustainable businesses – are those that have fared better than their peers in this crisis. Investors have noticed. Research by Fidelity reinforces this view, looking at performance within and across sectors, and in at both equity and fixed income. They conclude that those which outperform on ESG criteria have also performed better during the crisis. Their view is that those businesses which have been more resilient in the downturn will also be better positioned to capture opportunities when economic activity resumes. By recognizing the interconnectedness of the economy, the environment and society, it is clear why having a sustainable business plan strengthens economic resilience.  

Reconnecting with nature

COVID-19 is having a profound impact on people and their response to the world. What used to be in a box called ‘ESG’ is suddenly a real-world experience and we hope that this pervading sense of interconnectedness might sustain beyond the current crisis. From a personal standpoint, I am eternally grateful that this crisis hit the UK just as spring was starting. London is full of green spaces and, under blue skies, seeing the blossom emerging, hearing the birds singing and connecting with the community in the area that I live – if at a distance – has helped to keep me positive. Speaking to many business and finance leaders, they have felt a similar, profound deepening of their connection to nature, something that seems likely to remain. More than anything else, COVID-19 has attacked our lungs, making us all the more conscious of the air that we are breathing, and how much cleaner that air is in the absence of the levels of pollution that normally fog our cities. 

What next: can we build back better?

We have started to gather examples of how organisations around the world have responded over the past months. With our focus on the finance and accounting community, we are seeking actions taken before and during the crisis that might inform our collective response, help us move forward not backwards, and build back better in the short, medium and long term. 

Key questions that our research is covering include:

  • What approaches taken by organisations before the global pandemic hit have enabled them to respond more effectively to the crisis? 
  • Can the new ways of working, and the accelerated pace of innovation, that the crisis has triggered be leveraged to tackle other issues, including, most urgently, the climate crisis? 
  • What actions do we need to take to build back better, and what role must finance play?

As we continue to respond to the upheavals that COVID-19 has brought, most finance leaders I have spoken to have underlined that this is a defining moment in our lives. History will be our judge.

If you would like to learn more about ICMIF’s partnership with the A4S please click here or contact Shaun Tarbuck, Chief Executive, ICMIF. Find information on sources of learning for finance leaders to further understanding of role of finance in creating resilient business models and a sustainable economy here.

For member-only strategic content on the cooperative/mutual insurance sector, ICMIF members have exclusive access to a range of online resources through the ICMIF Knowledge Hub 

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