What We Think
October 23, 2020
Working towards a sustainable resilient recovery
Many have been calling for a green recovery to the COVID-19 pandemic. However, for the economic recovery to be a long-term and resilient one, returning to a ‘business as usual’ environment should be avoided. Governments need to look ahead and realise that environmental emergencies, such as climate change, could cause social and economic damages far greater than those caused by COVID-19. In order to avoid this, economic recovery packages should be structured to “build back better”. Essentially this means doing more than simply focussing on getting the economy back on its feet. Such recovery packages should instill investment and behavioural changes, aimed at reducing the likelihood of future shocks and increasing a country’s resilience to them when they do occur.
One idea for a sustainable recovery is to strengthen resilience and enterprise risk management, particularly in SMEs. SMEs are considered to be the backbone of any healthy economy. They provide employment opportunities, drive growth and support the emergence of new economic niches. Acknowledging the importance of SMEs, governments prioritised their support throughout the pandemic. However, this is simply not enough and SMEs need to chart out a path to truly strenghtening their resilience. Digital transformation should be at the forefront for all SMEs to help ensure they are more adaptable than ever before. There are numerous opportunities for SMEs to seize once they have undergone a digital transformation.
Another concept for a sustainable recovery is moving towards a circular economy. A circular economy offers policymakers the chance to chart a course towards a resilient and low-carbon economic recovery. European Commission President Ursula Von der Leyen introduced such a vision for Europe by explaining that the Euroepan Union will need to ‘bounce forward’ rather than ‘bounce back’, something which she envisions may be achieved by building a resilient, green and digital Europe. At the heart of this strategy lies the European Green Deal, a deal characterised by decarbonisation and digitalisation. The circular economy forms an inherent part of this strategy, by providing a framework for resilience and regeneration that delivers on multiple policy objectives. With policy makers, CEOs and other mobilising businesses all stressing the importance of a green recovery in response to the economic impact of the COVID-19 pandemic, rethinking, resetting and redesigning the economy from a merely reactive one, to a prosperous, inclusive and sustainable one has now become a necessity
This was the principal issue discussed at this year’s UN Global Compact Leaders Summit. Mark Carney, UN’s special envoy for climate and finance stated that the time has come for systemic and seismic changes to business models. He stated that no one can self-isolate against the predicament that is climate change. Unfortunately, the COVID-19 pandemic has brought to light how sluggish our progress has been in this respect. The pandemic should serve as a great reset, allowing countries to chart new policies and frameworks to recover stronger, be more resilient and be in a better position to tackle the difficulties that climate change brings about.
It is easy to talk about wanting a green and sustainable recovery, but putting a plan into action will require international coordination and cooperation to ensure the recovery is a succesful one. The COVID-19 pandemic, climate change and sustainable development are all collective action issues, which must be solved together. Earlier this month, Seed has just been accepted as a signatory of the UN Global Compact. We feel honoured to form part of a global network of over 9,500 companies which are committed to building a more sustainable future. Our purpose is what drives each and every single one of us and it features heavily in every decision we take. We encourage other business to join us in recognising the need to commit to sustainability and to ultimately making the world a better place.
This article was first published on Times of Malta