How to build back better after COVID-19

The COVID-19 pandemic is a global emergency, bringing devastation to millions around the world, impacting lives and jobs, and grinding much of the global economy to a halt. It’s a crisis that has shown our vulnerability and confirmed our under-estimation of the probability and exponential nature of systemic risks. It calls on all of us to come together with compassion and humility.

The virus heeds no borders. It is impacting families, companies, cities, countries and economies around the world. Short-term emergency efforts are rightly focused on dealing with the immediate impacts and preventing worse from happening. We are seeing inspiring examples of governments and businesses taking extraordinary actions to slow the spread of the disease, protect the health and safety of people and communities, support workers, help companies survive the turbulence, and work to ensure vital goods and services remain available.

As the immediate crisis response efforts transition, in some countries, to economic stimulus measures, the focus will be on rebuilding the economy and setting a new course. It is at this juncture that we need bold leadership.

As governments develop longer-term economic stimulus packages to combat the crisis, they must be designed around the core principle of building a stronger economy that ensures the long-term health and wellbeing of citizens, job creation, tackling climate change once and for all, and building a more resilient and inclusive society.

We cannot go back to business-as-usual and lock in old habits, pollution, spending and infrastructure that will inflict further harm on the very people, communities and economies that these stimulus packages seek to support.

The science is clear: climate change is a present threat to human lives, health and the economy. The decisions governments make now will lock in the strategic direction of companies and economies for years to come. Pairing economic recovery action with climate action at this critical moment will ensure that economies can recover stronger than before while simultaneously reducing emissions.

We Mean Business has called for longer-term economic stimulus to be screened through the lens of climate and resilience to ensure that government spending and policies accelerate the transition to a zero-carbon economy. There should be a focus on measures that contribute to reducing emissions, ensuring clean air and providing good jobs as well as safeguarding economic growth.

These stimulus packages should incentivize the rapid deployment of existing climate solutions and spur the development and demonstration of zero-carbon technologies to accelerate the growth of an inclusive, resilient net-zero carbon economy by 2050 at the latest. Now is the time for governments to provide companies with the clarity and confidence they need to unlock further investments in climate solutions.

A climate and resilience lens should apply not only to economy-wide stimulus packages but also to public financial support for companies. Businesses receiving long-term public financial assistance should be required to do the following three actions.

First, they must integrate risk into company disclosures, and in the case of climate, in line with the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD). Consistently assessing risks in company investments and strategy will ensure future investment decisions mitigate climate change, avoid stranded assets and prevent future risks. Understanding risks and managing them is the best way to build more resilient companies and economies.

Second, they must build science-based approaches to inform company strategy.
Companies should set science-based targets consistent with limiting global average temperature increase to 1.5°C and reaching net-zero emissions by no later than 2050. Understanding and integrating science into decision making is the best way to protect against future shocks and to ensure companies are rebuilding in ways that are future-proofed and work for people and planet.

Third, they must invest in low-carbon solutions that create new jobs. Companies should prioritize investments in technologies, products and services that create more jobs and reduce emissions. Some examples include investments in retrofitting of buildings, in renewable energies, and in achieving mass production and economies of scale in technologies that can decarbonize heavy industries.

Business and government can and must work together at this extremely challenging time to lay the foundations to build back better. Concrete government policies that send a clear signal to business will help us rebuild from this devastating crisis in a way that delivers a healthy future for everyone, through greater resilience and a clear pathway to a zero-carbon future.