How Businesses Can Make the Economy More Resilient
For the past few months, every government had paid attention to controlling the COVID-19 virus's outbreak and minimizing the country fatalities. As the health crisis has become a new normal (hopefully only temporary one), the focus has shifted towards stimulus measures that can trigger economic recovery. In addition to the human suffering, this pandemic revealed the problematic structures within our societies and economic systems, some we knew, but never had been so evidently exposed.
Beyond Build Back Better
The severity of this crisis exposed those vulnerabilities as well as a high probability of returning to previous destructive patterns instead of embracing more sustainable solutions. The "Build Back Better" term, a concept related to physical disasters, has resurfaced amid the COVID-19 pandemic. Yet, it shouldn't be limited to building back; we need much more of just 'building better' going forward.
Governments, and now the private sector, need to embrace the opportunity to contribute to a long-term resilient economy and abandon the short-term economic growth that created these systemic vulnerabilities. People are demanding nothing less. The onus is on leaders to respond accordingly. How can they lead their teams towards more responsible business practices that promise sustainable, equitable, and inclusive well-being? Here are a couple of suggestions to get started.
Protect biodiversity – Businesses whose operations directly impact nature and biodiversity, for example, forests and wetlands, can contribute significantly to better ecosystems. Companies in primary production sectors, like agriculture, forestry, fisheries, and mining, can focus on more sustainable resource management, regenerative approaches, and inclusive collaboration while still ensuring healthy natural habitats.
Secure food supply – Consumption behaviors have determined the way we distribute food around the world. The pandemic is changing these patterns now. Supply chains can profoundly influence the levels, according to which countries can recover from any disaster. For example, hydroponic agriculture, smart logistics, and the promotion of healthy consumption patterns can facilitate the adoption of more sustainable distribution methods. In turn, they can prevent the spread of new diseases, improve livelihoods for more people, and maybe avoid the insane long distances food products still travel to get into supermarkets.
Low-carbon electricity – 2020 will see drastically decrease in energy demand, which may result in low and volatile fossil fuel prices and bankruptcies of oil & gas companies. At the same time, investments in renewables are projected to continue to grow. For companies that still haven't committed to sourcing their energy demands from renewable energy sources, now is the time.
Energy-efficient buildings – Buildings globally contribute over 30% of the global CO2 emissions because of energy use and heating. Governments need to invest in the required retrofits to reduce GHG emissions from the existing building stock. Many cities, as well as businesses, are actively working on achieving near-zero or net-zero emission buildings. For the building, construction, and infrastructure industries, this is an opportunity to take an active part in introducing low-carbon solutions.
Accessible mobility – The automobile and public transportation sectors are an essential part of countries' growth, with great opportunities to create more resilient mobility solutions. One way to turn to is replacing combustion engines with electric vehicles and combine it with improved smart city infrastructure and electrified public transportation systems. Another way is to promote more active modes of transport, such as cycling, and ensure increased accessibility of all types of mobility solutions.
Resilient supply chain – Extraction, production, and shipment of raw materials through global supply chains plays a significant role in environmental pollution, albeit its importance for the global economy for decades. The current crisis has shown that a resilient, circular value chain transition is urgently needed. Companies in the supply chain and logistics sectors face one of the toughest challenges in switching to the circular economy. It has to start with (product) design for circularity and will need radically innovative approaches to recycling, reusing, remanufacturing, and creating a genuinely circular value and supply chain.
As we move towards a post-pandemic era, it is critical to not return to the previous normality, but rather build better facing forward, learn from our mistakes, and create a more inclusive and resilient economy that can prevent the disruptiveness of such crisis. More needs to happen, and various industries have multiple opportunities to facilitate that process and drive it forward.
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