Building a better post-Covid-19 world with the private sector
Building a better post-Covid-19 world with the private sector
Covid-19 has created one of the most widespread humanitarian and economic crises in recent history. Despite years of pandemic warnings issued, most governments, civil society, research institutions and businesses were caught unaware. Severe Acute Respiratory Syndrome Coronavirus-2 (SARS-CoV-2), the virus behind the disease Covid-19, has been reported in almost every country. With few exceptions, the impact of our lack of preparedness and coordination has been swift on both human and economic health, exposing fault lines of social, economic and gender inequality.
In addition to loss of life, a higher percentage of people have lost their jobs than even during the Great Depression. The ILO estimates Covid-19 will wipe out 195 million days of full-time work in the second quarter of 2020 worldwide, almost two-thirds of that in Asia alone (125 million days). S&P Global ratings estimate a credit loss of $300 billion to banks in Asia and the Pacific. Small and medium enterprises, which represent 90 percent of businesses and more than half of employment worldwide, according to the World Bank, are already shuttering, despite multi-trillion-dollar stimulus packages. The Thailand Rice Exporters' Association (Tan) reports the price of rice has surged to a record seven-year high in Thailand.
Income is tightly correlated with health outcomes: Asian Development Bank forecasts a sharp decline in domestic consumption, with families increasingly unable to buy essential medicines as a result of the pandemic. Despite the race to find a vaccine, the World Health Organization’s emergencies director has said that the virus may become endemic and “never go away.”
Therefore, building back better needs to start now, with civil society finding new ways to collaborate with business.
A model of effective private-sector engagement amid Covid-19
A clear need for collaboration, a coordinated response and the capacity to adapt to changing business contexts are key to successful partnerships among businesses, communities and non-profits. However, much more can be achieved if companies and non-profits jointly plan to scale sustainable businesses. This is the time to change industries that engage in practices that do not align with a resilient and inclusive post-Covid world. We have an opportunity to expand the donor model for rebuilding to include comprehensive private-sector engagement.
Pact, for example, through its USAID Green Invest Asia program, is helping agriculture and forestry businesses in Southeast Asia improve sustainable commodity production and manage environmental risks through climate-smart land use. We also support financiers to measure environmental and social risks, improving long-term returns. This approach offers pathways for businesses and investors to reduce greenhouse gas emission and mitigate climate change and ecosystem collapse, contributing, instead, to planet, people and profit – popularly known as the 3Ps.
Covid-19 disruption has created not only an unprecedented, large-scale opportunity, but also an enormous responsibility to improve global business value chains – from sourcing to harvesting, production to retail. Any recovery/resilience planning must address oversights of inefficient resource-intensive cultivations that – as Covid-19 has reminded us – can puncture a fragile ecosystem, leading to far-ranging negative impacts.
For companies supplying commodities that we rely on for daily life, one starting point is data collection about their value chain disruptions and bottlenecks. In the longer term, these businesses should aim high, including achieving carbon-neutral operations by 2030 and adopting technologies and practices that benefit biodiversity and reduce waste, air pollution and environmental degradation. Businesses that benefit the most from NGO partnerships are those committed to sustainable principles that are innovating and piloting effective sourcing, production and supply chain systems; investing in impact monitoring; strengthening feedback loops; measuring greenhouse gas (CO2e) emissions and pursuing sustainability certification.
NGOs with private-sector arms like Pact are well-positioned to capitalize on business awareness about the urgent need for more sustainable business models. Needed services that Pact is already providing in the field include:
- Conducting assessments of value-chain carbon footprints and developing strategies to reduce them
- Co-creating inclusive financial solutions
- Measuring environmental and social impacts and setting strategic targets
- Linking companies with impact investors
- Integrating health and safety requirements into business planning
- Documenting and disseminating best business practices
This demands more specialization in NGO capacity and strategy to collaborate with the private sector and investors to prioritize environmental, social and governance (ESG) policies and standards, which will greatly reduce pressures on the planet. Through Pact’s implementation of USAID Green Invest Asia, it is clear there are an increasing number of banks, investors and companies that desire to contribute positively to environment and society, but lack the right tools and capacities. A private sector that is motivated for change – teamed with an NGO like Pact – can result in transformation that we all need for a better future.
- Covid-19 amplifies the call to change human behaviors and practices that worsen climate change, ecosystem collapse, life-shortening air pollution and ocean acidification.
- NGOs like Pact – in addition to advocating change through increasing pressure on lawmakers and elected officials to address causal factors and creating awareness about the impact of poor land-use on human health – need to invest in their own capacity to influence the private sector. Private-sector engagement needs to advance an integrated system that develops people, planet and profit (3Ps) together.
- Corporates, which are responsible for the largest share of deforestation, natural degradation, biodiversity loss, water and air pollution, can contribute to post-Covid economic, environmental and human recovery through transformational leadership if non-profits engage with them effectively.
- This is the time to end or change industries that engage in practices that do not align with a healthy post-Covid world through incentivizing and building resilient and inclusive businesses.