The coronavirus cloud’s silver lining

One unexpected benefit of the coronavirus crisis has been improving air quality all over the world. Companies have a role to play in helping to preserve the gains made over recent weeks as countries begin to restart their economies.

According to the World Health Organization (WHO), nine out of 10 people breathe polluted air. It kills 7m people every year and causes a third of deaths from stroke, lung cancer and heart disease.

And the negative health effects of pollution translate into economic damage. The Centre for Research on Energy and Clean Air has found that in 2018 air pollution from burning fossil fuels (the biggest air pollutant) accounted for 1.8bn days of work absence globally, at an economic cost of $8bn a day. The cost to the UK was around £49.6bn annually, or 2.3% of GDP.

Air pollution is also closely linked to climate change, and the main driver of this is fossil-fuel combustion.

The Intergovernmental Panel on Climate Change (IPCC) has warned that we need to limit the temperature increase from where it is now to just 1.5°C by 2100, not the 2°C previously judged to be “safe”. This will require a 45% reduction in carbon pollution by 2030, rather than the previous target of 20%. Last year, the UK government was the first in the G7 to legislate a national target of net zero carbon emissions by 2050. Net zero is the point at which we are adding no incremental emissions into the atmosphere.

Counting the cost of climate change

The costs to UK companies of climate change go far beyond working days lost. The economic cost of storms and floods last winter will include hundreds of millions of pounds in lost sales and repairs to assets and infrastructure. Companies’ costs will rise as they implement measures to reduce their emissions during the transition to net zero – but the costs of not making the change will be higher because fines and penalties for non-compliance will rise the closer we get to 2050. On a more positive note, the business opportunities open to companies that tackle climate change are worth almost seven times the cost of realising them, according to environmental reporting and risk-management organisation CDP.

The best companies are already making great progress in tackling climate change and reducing their emissions – but there is a gap between the best and the rest. Sustainability consultancy EcoAct’s 2019 Sustainability Report found that although the top-ranking company in the UK (Unilever) scored 87% for its strong performance on a range of different measures, the lowest among FTSE 100 companies scored just 1%.

One of the easiest and cheapest ways to reduce emissions, says Stuart Lemmon, CEO of EcoAct UK, is to switch to renewable energy. The International Renewable Energy Agency estimates all renewable technologies in commercial use will be comparable to or cheaper than fossil fuels this year.

Another quick win is reducing emissions from travel. Globally, aviation produces 2.4% of total CO2 emissions. A first-class ticket on a long-haul flight emits, on average, four times that of an economy ticket on the same plane (600g compared to 150g), with a business-class ticket emitting nearly three times as much (450g) as economy.

Companies that have been forced to communicate using videoconferencing technologies during the coronavirus crisis may be encouraged (not least by the lower costs) to continue, but where people have to travel, trains are more environmentally friendly. And where vehicles are essential, it makes sense to use alternative fuel or electric models.

Businesses Must Think Strategically

With time running out, organisations need a strategic, rather than tactical, approach to sustainability, which companies like Unilever, Marks & Spencer and BT Group have had for years. These companies assess climate risks and opportunities and have plans to mitigate and exploit them; set targets on carbon reduction and measure their progress; incentivise employees to practise sustainable behaviour; and work with suppliers and customers to produce and use their products sustainably. CDP estimates that companies’ supply chains produce, on average, more than five times the emissions of their direct operations.

Awareness of the need to act quickly on climate change is rising, but action is lagging. EcoAct’s Lemmon believes transparent reporting is an essential precursor to action, “because it allows stakeholders to hold companies to account and helps companies themselves to focus on their progress”. The blueprint established in 2015 by the Task Force on Climate-related Financial Disclosures (TCFD) has rapidly become the benchmark for sustainability reporting.

Before the pandemic, EcoAct was optimistic that businesses would step up to the plate in helping to avert a climate catastrophe. Now its co-founder and global CEO, Gerald Maradan, is warning of the danger of ‘revenge pollution’: “Experience tells us that, post-crisis, economic activities accelerate at pace during recovery, along with emissions.” He believes that to preserve the fragile gains made during the crisis, government aid to companies affected by the lockdown should be allocated according to their current or promised climate performance.

But Laure de Preux, assistant professor of economics at Imperial College Business School, warns that this approach could create greater inequality. “Many businesses will emerge in a weakened state from this crisis, and this could be a challenge too far,” she says.

Will we revert to emissions as usual?

Alastair Lewis is professor of atmospheric chemistry at the University of York, a science director at the National Centre for Atmospheric Science, and chair of the Department for the Environment, Food and Rural Affairs (Defra) Air Quality Expert Group. He says the reduction in vehicle emissions we are experiencing – largely the nitrogen dioxide (NO2) that is visible from space – gives a taste of what we can expect in 2035, the date by which all new sales of petrol, diesel and hybrid cars in the UK will be banned.

“But taking cars off the road doesn’t appear to have made a big dent in other pollutants, such as fine particles (PM2.5). This reaffirms the need to think beyond cars and lorries as sources of pollution, to less obvious sources like agriculture, wood burning and solvents.”

Lewis anticipates we’ll return to “emissions as usual” at some point in the next few months, as cars get back on the road. This is already happening in China, as satellite images attest. “But globally many countries with very poor air quality have had a taste of what is possible for emissions and clean air, and this could well intensify pressure for action and change,” he adds.

We have been warned that coronavirus might not be the last pandemic we see in our lifetimes, and there is evidence suggesting climate change can contribute to pandemics – Ebola’s jump from animals to humans, for instance, was linked to deforestation as disease-carrying species sought out new habitats. Many organisations have identified opportunities to make their operations more resilient and sustainable – things like shorter supply chains, more energy-efficient manufacturing and increased digitisation of sales and marketing. It would be a short-sighted organisation that failed to capitalise now on those opportunities in the interests of their own and the planet’s survival.

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