By Nicole Lim
Today marks the last day of the “circuit breaker” in Singapore. Come tomorrow (2 June), Singapore will enter the first phase of the three parts to reopening the Singapore economy. Singapore is not alone, many countries and economies are already reopening while navigating through some semblance of a pre-COVID way of life – the new normal. How these upcoming weeks and months unfold will be critical for the fight against COVID-19, but also for setting our path towards a more sustainable future. How will we build back better?
The World Economic Forum (WEF) recently released two new reports which highlights key risks, challenges and opportunities the world is facing as a result of COVID-19. Based on inputs from 350 of the world’s top risk professionals, the COVID-19 Risks Outlook Report identifies the following most likely fallouts for the world, with economic risks topping the charts. This is no surprise, seeing as how the pandemic has halted much economic activity and saw governments pushing out trillions of dollars for recovery packages. Against this backdrop, these risks create far-reaching implications on ESG issues, as outlined in the report. Without going into too much detail, the environmental front will face risks from potential setbacks and stalling of progress for climate and environmental action. Countries run the risk of returning or developing emissions-intensive ways of operating as they look to reboot their economy post-pandemic. On the social front, WEF and many other thought leaders have identified rising inequality, negative effects on mental health, and long-lasting repercussions on youths, as some key societal risks. Cybersecurity and the inequality rising from the (forced) acceleration of widespread digital adoption has also been identified as a key risk. Underscoring all these risks is the need for strong, effective, and visionary governance practices to build back better. The report also outlines some key questions for decision-makers to consider.
An opportunity to build back better
Despite it sounding all doom and gloom, WEF also articulates that these risks are not forecasts – that decisive and bold action can set a path to a global sustainable recovery. Here’s a direct quote from the same report:
“As economies restart, there is an opportunity to embed greater societal equality and sustainability into the recovery, accelerating rather than delaying progress towards the 2030 Sustainable Development Goals and unleashing a new era of prosperity.”
The European Union’s proposal for a recovery plan which places emphasis on a green transition is one such example. The plan emphasises investing for the next generation, has significant funds directed at circular models and renewable energy, as well as proposals for adapting to new levels of digitalisation.
Beyond public sector responses, the report also notes that the global private sector will play a pivotal role in shaping a post-COVID future.
“As businesses seek to restructure supply chains, redesign manufacturing systems and respond to changing consumer demands, global sustainability could be shaped for years to come by the decisions taken today.”
In Singapore, we are seeing signs of such a green recovery from the private sector. Just last week, it was announced that CapitaLand secured a four-year S$500m sustainability-linked loan form UOB. This comes with Group CEO Lee Chee Koon highlighting that,
“The pandemic has raised global awareness of the importance of ESG (criteria), as major disruptions to businesses can come from anywhere… We are reviewing CapitaLand’s sustainability strategy… which will allow (us) to better future-proof our company.”
Also last week, the National University of Singapore (NUS) raised S$300 million through its inaugural green bond. Being the first of its kind among Asian universities, the bond will go towards financing green projects, which will be evaluated against NUS’ new Green Finance Framework. The university will be working alongside two major Singaporean banks, DBS and OCBC, on this commitment. Innovations and partnerships such as these would be pivotal in a post-pandemic recovery.
Be it in the public or private sector, one thing is certain – this pandemic has given the world the tools to manage a global risk. From newfound working practices, to altered ways of commuting and consuming, and to galvanising a global cohesive response to a crisis – emerging from this pandemic, we will have the opportunity to build back better.