It was not so long ago. Ephemeral images of clean, dust-free air, crystal-clear river beds, picturesque mountain views bombarded WhatsApp groups in the early ‘lockdown’ months of April to July. A direct fallout of the lull in economic activity—many regarded these as instances of nature healing itself from the years of onslaught by human activities on the environment, flora and fauna.
As the momentum of economic activity begins to gather pace—post a phased lifting of ‘lockdown’ restrictions—questions are being asked about whether the response to the pandemic had any lessons for business on how to mitigate climate change risks.
A recent study by McKinsey Global Institute, Climate Risk and Response in Asia, points to the cause and effect, and the similarities in the responses to Covid-19 and climate change.
Experts point out that both pandemics and climate risk cause physical shocks with an array of socioeconomic impacts. “The current pandemic may provide a foretaste of the impact of a full-fledged climate crisis, with simultaneous exogenous shocks to supply and demand, disruption of supply chains, and global transmission and amplification mechanisms,” says the McKinsey study.
While the World Health Organization (WHO) notes that there is no evidence of a direct connection between climate change and the emergence or transmission of the Covid-19 virus, it does acknowledge that any delay in responding to threats, whether from pandemics, or from climate change, increases human and socioeconomic costs.
In fact, the mitigating response for both are similar. As the McKinsey study points out, they require fundamental shifts, “from optimising the short-term performance of systems to ensuring longer-term resilience”.
“Covid has pushed the climate change agenda,” concedes Suvojoy Sengupta, partner, McKinsey & Company, and one of the co-authors of the study.
The study notes that the pandemic has prompted a rethink of priorities and led to discussions about investment that can foster long-term sustainability.
What is also of interest is the synergy between the Covid-19 response and the climate change response, points out Jonathan Woetzel, director at McKinsey Global Institute.
Experts agree that any visible environmental improvements from the Covid-19 response are at best temporary, and are likely to get reversed as erstwhile polluting economic activities gather momentum. Unless, as WHO acknowledges, this is followed up with “a clear focus to promote equity, environmental health, around a just transition to a green economy”.
And that is where there is a need to tailor the climate change response to the Covid-19 response, experts add.
“Covid-19 has shown us a pointer towards climate action,” says Anjal Prakash, climate scientist, and research director at Bharti Institute of Public Policy, Indian School of Business. Prakash says the biggest lesson is that climate change risks could be mitigated if the right actions are taken. “It would be good for all—people, planet, and profit,” he says.
For that to happen, businesses have to first recognise the opportunity to transform and build resiliency by making strategic moves.
Unlike a pandemic, changes in nature are irreversible. “Covid has brought recognition of the fact that there are several known and unknown risks that nature poses to business. Furthermore, there is recognition that the impact that they can create is devastating,” says Sunil Chandiramani, independent director, and former national director, EY Advisory Services.
Experts point out that till now countries, and businesses, have been evading climate change issues due to commercial considerations. Chandiramani feels that climate change is a ticking time bomb and the industry is underestimating the cost of corrective measures as compared to preventive measures.
However, the biggest risks from climate change and the lessons in mitigating these risks could come from Asia. India, for instance, could become one of the first places in the world to experience heat waves that cross the survivability limit for a healthy human being, the study points out.
To mitigate the risks there is a need to facilitate a rapid shift from coal to renewable energy in the power mix, decarbonisation of industrial operations, electrifying transport and buildings, along with reforms in the agriculture sector. Accordingly, businesses would need to embed climate risk in all their decision-making processes, the study adds.
The way forward, say experts, is for large businesses to lead and support their supply chain and employees for developing ecologically sustainable business models. Governments too would need to chip in with incentives for consumers to buy products and services that help to meet sustainable development goal targets.