The spread of COVID-19 has unleashed unthinkable devastation across the globe, forcing people to grapple with the loss of livelihoods on top of the loss of life. These human consequences are of the paramount importance.
In this time of uncertainty with large swaths of the world operating under some variation of self-isolation order, it is virtually impossible to know what is going to happen next week never mind for the rest of the year and beyond. But the global response to the virus has surfaced many issues with consequences for ESG activities. SASB is monitoring these developments closely to expand our understanding of how these lessons will inform our standards development over time.
Response to the virus has served to further intensify focus on the importance of human capital in a myriad of ways. Some companies reliant on “gig-economy” workers have started offering health care and paid leave benefits previously unavailable. Many retail and ecommerce companies have offered raises or bonuses to encourage employees to accept the risk associated with working in public at a time when the virus is spreading. Some employees have walked off the job to demand more safety protections at work. There are fears about the availability of labour to maintain the food supply chain. Several large COVID-19 outbreaks have occurred at a meat processing plants, in many cases idling the facilities and in some cases leading to shortages for downstream businesses. These workforce impacts all directly relate to and will likely inform SASB’s ongoing work related to human capital as well as future work as our understanding of the breadth and depth of these impacts grows.
The relationship between the COVID-19 also has ramifications for other aspects of ESG. Many tech companies, for example, are struggling to try to contain the publication/sharing of misinformation associated with COVID-19. Governments seeking to trace the spread of the virus are turning to tech solutions, including mobile phone tracking, raising renewed concerns about balancing consumer privacy with public good. As a homebound workforce has turned to videoconferencing, new security risks have arisen. And there are attendant risks with employees accessing potentially sensitive data remotely. With forced experimentation in remote working, it is possible companies may reevaluate their policies for the long term, potentially impacting demand for office space in the future.
The spread of the virus has also surfaced new developments affecting the climate. As global economic activity has sharply slowed, carbon emissions have declined and air quality improved. On the other hand, there are mounting concerns that financial pressures might force companies to dial back longer-term efforts to reduce emissions. In part due to labour health concerns, some recycling operations are at risk. Coffee chains have stopped filling reusable cups. And some municipalities that have implemented bans on single-use plastic bags, have at least temporarily reversed themselves fearing potential contagion from reusable bags.
To some degree, all these developments relate to the core dimensions that form the foundation of SASB standards. At the present and in the midst of these unfolding events, it is difficult to fully understand how COVID-19 and the global response to contain it will result in permanent regulatory or social change. But SASB will follow these events carefully to ensure that our work is informed by the shared lessons learned through the global response to this crisis. SASB updates its standards via a project-based model, enabling standard setting to effectively address broad themes, regulatory changes, and other trends which affect multiple sectors. This project-based model includes evidence-based research, extensive market consultation, and public comment periods. To build a more resilient future, the important lessons of this pandemic deserve thoughtful, painstaking analysis informed by a range of market perspectives. If you would like to share your insights on these issues, please contact the SASB analyst for the relevant sector/industry. We welcome your views.