21 Jan 2021

On September 23, 2020 I held a panel discussion on behalf of the New Zealand ASEAN Business Alliance Conference on how the short-term impacts of COVID-19 point towards the long term possibilities for sustainability. The panel was attended by five of Asia Pacific’s corporate sustainability leaders: Carolyn Mortland (Director of Global Sustainability, Fonterra), Rachel Depree (Executive Officer for Sustainability, Zespri), Genevieve Smith (Principal Sustainability Advisory, Beca), Rosie Mercer (General Manager Sustainability, Ports of Auckland), and Janette O’Neill (Group Head of Sustainability at QBE Insurance). The panellists represented industries who have faced the immediate pressures from the pandemic and the converging crises of the climate emergency, collapse in ecosystems, and social inequality. Our conversation was heard by over 100 participants and told the story of how companies that lead with Environment, Social, and Governance (ESG) were the best prepared for the COVID-19 crisis and well positioned for future success.

I began the panel by outlining the context brought about by the COVID-19 pandemic: it has made millions of people fall sick, created global nationwide lockdowns, and intense shocks to supply chains. The economic consequences predicted were profoundly negative and frightening, yet in the midst of skyrocketing infection rates, some political leaders downplayed the seriousness of the virus and announced ‘back-to-work’ plans. These plans ignored scientific advice and the basics of infectious disease control, and 12 months later we are continuing to see the fallout of these countries not prioritising human health. 

Some governments in the Asia Pacific region decided to ‘go hard and early’ with tough social distancing measures. The governments who locked down early are already seeing signs of accelerated recovery. New Zealand had one of the strictest lockdowns in the world, and Zespri and Fonterra (global horticulture and dairy leaders respectively, with headquarters in New Zealand) immediately identified how to prioritise the physical and mental wellbeing of their essential workers in the newly restricted environment. 

Zespri’s first priority was on the health of its essential workers, drawing on its governance structures to ensure the processes in packhouses and on-orchard were redesigned to enable social distancing, safety, and wellbeing. The second priority was delivering the upcoming kiwifruit season, thus recognising the importance of keeping focused on the long term strategy. Fonterra ensured that its staff working on farms, in factories, as tanker drivers, and logistics drivers felt recognised as essential workers and understood the importance of their roles across the entire supply chain. As an essential service and lifeline utility, the Port of Auckland focussed on being resilient, deploying non-essential workers to support those in essential roles.

A hard and early government response going forward must support corporations to “build back better”. The impacts from COVID-19 have been severe, but climate change poses a greater threat. In the words of Christiana Figueres, head of the UN climate change response that led to the Paris Agreement in 2015, the $10-20 trillion that governments are spending on economic recovery packages will not be repeated.

Corporates who are best placed to “build back better” had actively prioritised Environment, Social, and Governance (ESG) factors in their business strategies prior to the pandemic. Although not immune to stock market fluctuations, the companies who are recovering faster have business continuity plans for different future scenarios. Climate mitigation, adaptation and increased digital connectivity will be crucial in remaining resilient as business continues to be reliant on organisations across the world to operate. Beca, an engineering and consulting firm, discussed grey and green infrastructure projects and products that are circular by design as two climate adaptation measures. 

Each panellist raised the vulnerability of supply chains with global warming and extreme climate events. With New Zealand and Australia at a long distance from most markets and customers, strong international relationships will be business critical as supply chain disruptions increase. 

The pandemic has increased institutional investor’s focus on ESG, resulting in global funds with ESG assets increasing by more than 50% since the end of 2019. This is not a fading trend. But a corporation focusing on reducing deforestation or the fastest route to decarbonise is no longer enough to create investment interest. Janette O’Neill from QBE Insurance stated that investors want to see how social issues (such as employee health & wellbeing, inclusion and human rights) and governance issues (such as conduct, privacy and regulatory management) are addressed with the companies in their portfolio. A sustainable company must be holistic and inclusive.

The next 12 months looks brighter for governments who have gone ‘hard and early’ and corporates who prioritised ESG within their business strategy. Some questions I’m holding are: How will a K-shape economic recovery impact ESG investment priorities? What impact will the pandemic have on the relationships between government and business? How long will government subsidies continue for, and how long will the economic recovery period last?

Special thanks to the panellists, the New Zealand ASEAN Business Alliance, Southeast Asia Centre of Asia-Pacific Excellence, and the New Zealand Chamber of Commerce in Singapore for hosting the discussion.

The panel was hosted by Oriana Brine, who is a Senior Sustainability Strategist at Forum for the Future’s Singapore Office. She works alongside business to drive corporate sustainability strategies and implementation in Asia-Pacific.

Cover photo credit: Gabriel Peter from Pexels