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Freshfields Sustainability

| 5 minutes read

Business as unusual: How can companies prepare for a postcorona world?

When we exit this crisis, the world will be different. Investors' psychology will change. Business will change. Consumption will change. And we will be more deeply reliant on our families and each other to stay safe. 

Larry Fink's March 29 2020 letter to shareholders.

COVID-19 is disrupting every aspect of our lives. With the possible exception of remote indigenous communities and submarine crews, every person on the planet has been affected by the virus.

As a result of COVID-19 related restrictions our lives have changed beyond measure from what they were just a few months ago, in every aspect. Many of the things we take for granted are either past memories or future longings: a cold beer on a sunny terrace, that friendly football game in the park, a Sunday lunch in the local pub and those post-work drinks on a Friday evening. Instead we learn to carefully balance home and work responsibilities under a single roof with young people who want nothing more than to play with their parents. Why else would Mum and Dad be home?

And while a few companies are thriving, the impact on the business community is arguably even greater. Where will future revenues come from? How can we continue to pay our staff? How secure is our supply-chain?

While we don’t know how long this crisis will last for, it is very likely that what comes next will be very different to what we have known to date. Will we go back to pre-corona behaviours or will the way we do business and run our economies fundamentally change? Over the coming weeks I will be exploring how a postcorona world might impact business, and how business can prepare themselves. I will review this through four lenses: The environment, our society, how we work and our economy.

Week 1: Will the environmental recovery last? 

Clear skies, dramatic reduction in pollution, fish return to Venice and birdsong can be heard everywhere. There is no doubt that our planet has benefited from the lack of economic activity. So what happens next? Will we do everything we can to make up for lost time and let the environment bear the consequences, or will we fundamentally change how we generate energy, produce goods, source raw-materials and manage supply-chains?

Until very recently, most agreed that climate change was the single greatest threat to our planet. This has now been replaced by COVID-19 and its economic fallout. Some argue that addressing climate change has suffered a fundamental setback and we are losing the little momentum we had, while others, such as the European Commission, believe that this is the opportunity to fast-track the transition to a low-carbon future. Which view will prevail and how will this affect markets and the companies shaping – and relying on - these markets?

Week 2: Have we created stronger communities? 

Distance has brought us closer over the last few weeks, and technology has paradoxically made us more human. Speaking to a colleague from our respective kitchens with family members in the background has become the norm and provided us with a greater sense of connection with the individual behind the job. Video-chats with multiple friends to share lockdown tales from around the world has strengthened bonds and made us realise how much we value people we often take for granted.

At a societal level, we are realising the critical value of roles that are relatively underpaid – and therefore undervalued in our old paradigm – such as healthcare workers and teachers, and the vulnerability of gig-economy workers to economic downturns. Will a postcorona world review how we value work and define value?

The sharing economy has taken on a whole new meaning with an abundance of stories of companies offering products and services for free and people offering their time as citizens, instead of their wallets as consumers. Helping others with no expectation of reward is becoming the norm. Postcorona, could this sharing mindset become embedded in our communities and take root in our economic activity?

How will this impact on business? How will recruit people and select office locations? Will a sharing ethos impact business models?

Week 3: How will our experience of work change?

We have adapted remarkably quickly to new ways of working and communicating. Many are surprised at how those of us who are still able to work have been able to remain productive in spite of the lack of physical meetings, workshops and conferences. Physical interactions have been replaced by online equivalents and most of us are amazed at how effective these alternatives can be. I recently was part of a team of the University of Cambridge Institute for Sustainability Leadership (CISL) teaching a 4-day workshop to a group of 40 bankers using only online interaction instead of the physical workshop that was due to take place. And while the social interaction could not be replicated, the quality and depth of learning was retained. We are all experiencing the same in our professional environments as we move from physical meetings to virtual alternatives. And in the process get a glimpse into people’s lives we otherwise would have missed.

What will this mean going forward? Will we change how we work to such an extent that physical location of people and offices won’t matter. Will ‘financial centres’ and ‘shopping malls’ take on a very different meaning in a postcorona world?

For business this could fundamentally change how - and where - we recruit, locate our offices and interact with each other. Will this reduce our ability to create a shared mindset and work ethos within our organisations, or an opportunity for greater employee wellbeing and productivity?

Week 4: What will capitalism look like postcorona? 

Even before COVID-19, many were identifying the need for capitalism to reinvent itself. The FT’s New Agenda campaign called for a ‘reset of capitalism’ calling for business leaders to protect the future of free enterprise and wealth creation by pursuing profit with purpose, while Larry Fink said we were on the edge of a fundamental reshaping of financearguing that a company cannot achieve long-term profits without embracing purpose and considering the needs of a broad range of stakeholders.

The coronavirus crisis has accentuated this, highlighting how all economies need a number of core services to be delivered in order to function properly and that a world that values profit over purpose risks undermining both those services and the people that deliver them. In a previous life, when working for the Aldersgate Group, a UK coalition of corporations, civil society organisations and parliamentarians, I wrote a report asking what ‘An Economy that Works’ looks like, and identified six core characteristics of a successful economy: An economy that works needs to provide meaningful work, wellbeing, equality of opportunity in a way that is low-carbon, zero waste and restores natural environments. Cambridge's CISL came to very similar conclusions in its 'Rewiring the Economy' programme.

Now more than ever we need to revisit these questions, as we are standing on the threshold of a fundamental, systemic change to our economic paradigm. Only the most adaptable and resilient businesses will thrive.

In closing I would like to leave you with the following quote from an Arundhati Roy article from last Friday’s Financial Times:

Historically, pandemics have forced humans to break with the past and imagine their world anew. This one is no different. It is a portal, a gateway between one world and the next.

We can choose to walk through it, dragging the carcasses of our prejudice and hatred, our avarice, our data banks and dead ideas, our dead rivers and smoky skies behind us. Or we can walk through lightly, with little luggage, ready to imagine another world. And ready to fight for it.

Stay tuned. And in the meantime please share your thoughts on how you think the current COVID-19 crisis will impact the sustainability agenda of businesses, society and regulators.


sustainability, covid-19, climate change, environment, responsible business, purpose