By Fiona Reynolds (@fireynolds), CEO, PRI
The unfolding of the COVID-19 pandemic over the past months has exacerbated systemic social issues around the world. From equality and inclusion to decent work and social protections, the crisis has unveiled substantial systemic shortcomings within the global financial system and society as a whole. It has been essential in the short term to divert our attention to dealing with the immediate public health implications of the crisis, but now as we look toward the recovery it’s critical that we widen our perspective.
We are, in fact, dealing not just with one crisis, but with a convergence of health, social and environmental crises, the most salient of which may well prove to be climate change. The significant threat we’re facing from climate change simply cannot be side-lined or kicked down the road. And the focus on making the recovery people-centric is ever more important to cement social and political acceptance of the transition. While the magnitude of the risk is clear so too is the unparalleled opportunity our current situation presents us to leapfrog into to a better future.
So, as many people have aptly been saying—a return to normal is not an option, we must build back better. But what does better actually look like? In three words: sustainable, green and inclusive.
What does better actually look like? In three words: sustainable, green and inclusive
The good news is, these three criteria can be mutually reinforcing. With some $10-20 trillion earmarked and already being rolled out in stimulus programmes from governments around the world, we are in a unique position to harness these recovery packages to accelerate our commitments to the 2015 Paris Agreement on climate change and to the Sustainable Development Goals.
Critically, a green recovery provides an opportunity to futureproof our workforce and put people at the heart of our response. New jobs in the green economy need to also be good quality jobs, offering good pay, upskilling and pensions and be rooted in respecting fundamental labour rights. As Sharan Burrow, General Secretary of the International Trade Union Confederation points out, as a result of the crisis we’re facing up to 300 million jobs or equivalent hours lost, some 500 million people may slip back into poverty and 250 million people are facing starvation. We’ve not put social protections in place, in a universal sense, in more than 70 percent of countries.
Investing more in the green economy can advance the decent and inclusive work agenda, if it is rooted in international human rights, as environmental degradation disproportionately affects vulnerable populations and low-income countries. Recovery plans should adopt just transition principles to ensure that jobs are created across society that match with investments in net-zero emissions energy, industrial, building and transportation systems and include climate resilience measures. To ensure this people-centric approach, workers and communities most affected by the move to a net-zero economy need to be given a central voice in planning the transition.
Research is showing that a zero-carbon strategy is capable of generating strong economic returns and will create jobs at least as well and potentially even better than carbon neutral or environmentally negative recovery measures. As Joseph Stiglitz and Lord Nicholas Stern et al. conclude in their recent University of Oxford study, ‘Recovery packages that seek synergies between climate and economic goals have better prospects for increasing national wealth, enhancing productive human, social, physical, intangible, and natural capital.’ This is an unprecedented chance to utilise green fiscal packages to decouple economic growth from GHG emissions.
Meanwhile, alongside government planning, momentum is building amongst civil society and in the private sector in support of a zero-carbon recovery that embraces care for human rights and the environment and builds resilience for future disruptions. COVID-19 has served as a sort of proof-point for sustainability. Over the past few months we have seen record levels of investor engagement and take-up of sustainability strategies. According to BlackRock Q1 data, more than 90 percent of sustainable indices outperformed their parent benchmark during this time of increased market uncertainty around the pandemic.
This private sector support will prove critical as governments find themselves facing growing debt-to-GDP ratios. Over the next few months we need to see a coming together of the public and private sectors and the creation of public private partnerships to deliver a clear pipeline of scalable, investable and bankable projects.
Our response to the COVID-19 pandemic can lead us in one of two possible directions. It can lock-in inequality and high-carbon pathways, significantly hindering our chances of limiting global warming to 1.5 degrees or it can serve as harbinger of a new, stakeholder driven economic system, with people and planet at its heart. Only through coming together as businesses, investors, governments and civil society will we achieve an inclusive, green and sustainable recovery.
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