Select Language


Charting a Green and Just Recovery from Pandemic

COVID-19 Insights Sustainable Finance February 02, 2021
COVID-19 Insights Sustainable Finance February 02, 2021
  •  Minute Read Clock/
  • ListenListen/ StopStop/
  • Text Bigger | Text Smaller Text


The rapid global spread of COVID-19 and anti-racism movements emerging in cities around the world is underscoring the increasingly interconnected and interdependent nature of our world. In this context, the speed and scope of transition that our societies are experiencing is faster than ever. To adapt and survive during these times of significant disruption, it’s critical for both the public and private sectors to anticipate emerging trends, and respond to uncertainty in a way that considers the impact on all stakeholders holistically.

This concept is embedded in the theory of stakeholder capitalism which is championed by the World Economic Forum and gaining prominence in the business community. The view is that it is the purpose of a company to create shared and sustained value, not solely for shareholders but for the benefit of all stakeholders – employees, customers, suppliers, local communities and society at large. While managing the increasingly complex needs and expectations of these diverse groups may at first seem conflicting, in reality, the goals of creating positive impacts and minimizing negative impacts to society, the environment and the economy can be mutually reinforcing. Companies that succeed in managing them concurrently have the potential to create “win-win” outcomes.

COVID-19 has created a global tipping point, bringing a level of disruption that has simultaneously upended multiple social systems and produced an opportunity for transition that goes beyond the pandemic. Governments and the private sector have an opportunity now to address the much longer-term crisis of climate change, and ensure a post-COVID transition that is green, and a lower carbon transition that is just – a Just and Green Transition.

Across Environment, Social and Governmental (ESG) considerations, the pandemic has offered lessons we should heed to enable a Just and Green transition:

Lesson 1: A smooth transition from COVID to climate (E)

The current situation offers the opportunity to smoothly transition out of COVID in a way that is also just, charting a transition to a lower carbon economy that leaves nobody behind.

The idea of a green transition from COVID is already embedded in several government relief programs for large corporations. For example, the Canadian federal government’s Large Employer Emergency Financing Facility offers bridge financing that is contingent on a commitment for companies to publish annual climate-related disclosure reports consistent with the Task Force on Climate-Related Financial Disclosures. Similarly, bailouts for French airlines include stipulations that companies renew fleets with more efficient aircraft, commit to sourcing sustainable fuel and reduce domestic air travel to encourage less emission-intensive travel by rail.

The impact and rapid response to the COVID-19 pandemic have brought to the forefront the importance of social sustainability issues – programs around worker health and safety, sick leave, flexible work arrangements, fair wages and job security. Impacts from the pandemic have been more acutely experienced by specific groups of the population that are more likely to be engaged in employment arrangements that do not offer these social benefits, including the elderly, low-wage workers, ethnic minorities and women.

As we begin on the path of post-pandemic economic recovery, we can expect a continued focus on programs that maximize positive environmental and social sustainability benefits. Knowing that climate change poses significant risks to our current economic system and seeing how disruptive these economic shocks can be to the economy and our social well-being, we believe the recovery from the pandemic should focus equally on being just and green.

A green recovery accomplishes the dual goals of maintaining global reductions in greenhouse gas emissions that have resulted from a decrease in economic activity, and continuing the trajectory toward a net zero economy even as economic activity resumes. As the International Energy Agency’s (IEA) June 2020 Sustainable Recovery Special Report indicates, “it is possible to simultaneously spur economic growth, create millions of jobs and put emissions into structural decline,” thus supporting a just and green recovery.

Lesson 2: A transition that lifts up people and communities (S)

Much like the pandemic, a transition to a lower carbon economy places a spotlight on the livability and workability of our societies. If left unmanaged, a climate transition could leave certain people and communities behind, creating adverse and unequal social and economic impacts. Specific demographic groups, for example, face higher risk of financial hardship from the transition to a lower carbon economy. The International Labour Organization has identified women, Indigenous Peoples, ethnic minorities and people with disabilities amongst those most at risk. And the potential for supply chain disruptions would adversely affect small- and medium-sized enterprises, putting entire communities at risk of losing corporate partnerships that provide critical revenue and employment opportunities.

However, the climate transition also stands to result in societal benefits, including, for example, a global net increase of 18 million jobs with the growth of specific industries – construction, utilities, manufacturing, and renewables – playing a mitigating role against job losses in historically brown sectors. Understanding this and planning the transition in a way that considers workers, businesses and the community in light of the opportunities that the transition presents is a true embodiment of the stakeholder capitalism model. By identifying vulnerable groups and providing reskilling and training where they can access these opportunities for decent work, society can create “win-win” outcomes for workers, communities and the environment. A “Just Transition” means moving towards an environmentally sustainable economy where everyone has access to decent work, social inclusion and the eradication of poverty. It needs to be well managed and presents the greatest sustainability opportunity as we overhaul our economic system on a scale equivalent to the industrial revolution.[1]

Lesson 3: The power of collaboration (G)

The pandemic has made clear the depth and breadth of the ties that bind us on a global scale. In much the same way as COVID-19, climate change has local implications but global influence – it unites us as contributors to the problem and potential victims of the consequences. The coordinated response to the pandemic, one in which society’s actors have put self-interest aside to flatten the curve, has shown us that this type of approach has the potential to be highly effective. In the Canadian banking sector, for example, financial institutions collaborated with each other and the Government of Canada to implement relief initiatives – mortgage deferrals, access to emergency benefits for individuals through online banking and to small businesses through the Canada Emergency Business Account (CEBA) program, partnering with the Business Development Bank of Canada and Export Development Canada to operationalize the federal government’s Business Credit Availability Program (BCAP), and others.

It is this type of collaborative approach to solving big challenges that we feel is critical to apply to sustainability challenges. Doing so will help to ensure that the needs and expectations of various stakeholder groups are identified, considered and addressed in the transition, as well as amplify efforts with the power and influence of the public sector and the private sector working in partnership with each other.

Purpose, impact and resilience in a post-COVID world will become the pillars and core aspects of sustainability strategies for the public and private sector. Sustainability practitioners will be called upon to anticipate trends and connect the dots between sustainability topics across the environmental, social, economic and governance dimensions. Considering impacts of sustainability challenges on stakeholders in a holistic way – one that looks to maximize a wide range of positive impacts and minimize negatives ones – will be increasingly complex. Doing so successfully, however, will build resilience into corporate strategies and the economic system more broadly.

Additional resources on how sustainable finance can support a just transition:
Just Transition, Sustainability Leaders podcast

[1] International Labour Organization, ‘Greening with Jobs: World Employment Social Outlook,’ 2018 Last accessed August 13, 2019


Top Rank Bank in The Wall Street Journal Sustainability Survey. Learn More Here.
Read more
Whitney McWade Director, Sustainability Strategy, Disclosure and Impact

You might also be interested in