The Changing Face Of Sustainability

Over the past decade, the role of business in sustainability has been increasingly highlighted by stakeholders around the world. The pandemic has proven the viability of the environmental, social and governance (ESG) agenda for both stakeholders and investors. It has specifically elevated the significance of social factors in the current moment, and environmental factors in the long term.

- Jennifer Lee

In the first four months of 2020, investors poured a record US$12.2 billion into ESG funds. The steady inflow is explained by the profitability of ESG investments, which have turned out to be remarkably resilient to disruption. For instance, more than 70 percent of ESG funds for all asset classes outperformed their competitors. And at the end of the second quarter there were 534 index funds focused on sustainability, overseeing a combined US$250 billion in Europe and the United States.

COVID-19 AND ITS IMPACT ON SUSTAINABILITY

The onset of COVID-19 caused an immediate shift in global priorities. Many thought that the pandemic would cause companies to relegate ESG down the list of priorities, but so far the opposite has happened. Major corporations across industries — including Barclays, Biogen, General Mills, Google, Intel and Tetra Pak, to name a few — announced bold sustainability commitments amidst COVID-19.

So, what caused this influx of commitments? COVID-19 has highlighted the need for strategic disaster preparedness plans — which in turn increased the urgency behind preparing for climate change, resulting in minimizing COVID-19’s impact on climate change.