Sustainable livelihoods? The informal sector beyond Covid-19

By Søren Jeppesen

As a number of the CBS Sustainability blogs have mentioned since March 2020, the official reactions to Covid-19 have (so far) not been doing much for sustainable development (apart from lower CO2 emissions from air travel). Despite concerned voices criticizing the limited attention to combating climate change (‘environmental sustainability’) in the longer run, little impact on policy makers has been registered.

If we focus on ‘social sustainability’ the picture is similar. Discussing the social side of sustainability is part and parcel of assessing the situation in the informal sector and among the estimated two billion people reliant on their livelihoods through the informal activities across the Globe. Sadly, the situation has shown that this group of people and their families have suffered from the imposed restrictions due to Covid-19 (see here).

While the negative impact on income and livelihoods probably is the most severe consequence of inability, lack of willingness (and in some cases maybe even sheer ignorance) among authorities, the events since March can also be viewed ‘an opportunity missed’ regarding (more) sustainable practices.

The classical example is waste handling where informal workers (or scavengers) are involved in waste collection, sorting and identifying material for recycling and reuse. The Indian system where almost all component of waste are sorted and reused is well-known. But additional examples are found in areas like minimizing food waste and establishing social safety nets (Tucker and Anantharaman, 2020). Had governments appreciated the role of the informal sector and the activities undertaken, the period since March could have been used to change towards a ‘sustainability footprint’.

So, instead of using the (unfortunate) challenge to aim for positive change why have governments then been so keen to do the opposite and merely lockdown the informal sector (including denying poor people of their meagre livelihoods)? As Tucker and Anantharaman (2020) argue, it might be due to informal work being perceived as a ‘deficit’ (lack of contracts, lack of permits, lack of tax payment, lack of this and lack of that). International organisations like ILO have long been arguing in favor of ‘formalization of the informal’ (ILO, 2019). And not to romantize the informal sector, nevertheless it is intriguing that this is and has not been a sector perceived as ‘creative, agile, flexible’ and all the buzz that the present glorification of the private sector and individual initiative otherwise has been marked by.

Now, we can’t change what have been the typical type of reactions to the Covid-19 situation across the globe, but we do note that we have increasing social challenges ahead due to rising poverty levels, the naïve, optimistic wish for the New Year is that attention will be placed on how to engage the informal sector and all its resources in the strive for a more sustainable development path. It will not only open up the Pandora’s box regarding new and valuable ways on dealing with the Global trajectories, but could provide avenues for the informal sector to be reckoned as ‘a contributor’ (instead of ‘a deficit’).


References:

CGAP, 2020. Covid-19 Briefing. Insights for Inclusive Finance. Relief for Informal Workers: Falling through the Cracks in the COVID-19 Crisis. August.

ILO . International Labour Organization; 2019. Work for a Brighter Future. Geneva.

Tucker, J.L. and Anantharaman, M. 2020, Informal Work and Sustainable Cities: From Formalization to Reparation, One Earth. 2020 Sep 18; 3(3): 290–299. (doi: 10.1016/j.oneear.2020.08.012)


About the Author

Søren Jeppesen is Associate Professor at the Department of Management, Society and Communication at Copenhagen Business School. His research concerns the development of firms in developing countries. He focuses on SMEs, CSR and driving forces (or lack of same) for strategies of SMEs in developing countries in engaging in CSR (or not engaging).


Photo by The Ian on Unsplash

Tax havens, COVID-19 and sustainability

By Sara Jespersen

At CBS we will host a workshop and two public events (see below for sign up) on corporate tax and inequality next week 24th – 26th June 2020 – the COVID-19 crisis has underlined the pertinence of this topic in major ways.

Taxation, tax havens and corporate tax have been high on the agenda for a while. Since the outbreak of the global financial crisis of 2008 corporations seeking to minimize their tax payments have been under close watch from the media, civil society and politicians with a focus on ensuring that corporations pay their “fair share”. The OECD and the EU have gone to quite some length to try to stop tax-optimizing behavior through revising and modernizing existing rules and legislation. In collaboration with the IMF and the World Bank they have invested time and resources in strengthening tax systems, governance and improving domestic resource mobilization in low- and middle- income countries. This work is ongoing and corporate taxation is already high on the list of priorities for the world community. But then along came COVID-19.

Taxation is central in two ways when we reflect on the pandemic and what will follow. Firstly, governments have passed historic economic recovery packages to ensure that the private sector stays afloat and to avoid mass lay-offs during the lockdown period in 2020. The question is what can we expect in return? Secondly, the emerging discussion on the disruption caused to national economies should be thought into long-term solutions for sustainability including tax.

“Tax haven free” recovery packages

Poland and Denmark, followed by Italy, Belgium and France have attached an explicit conditionality to their COVID-19 state support that companies cannot be registered in tax havens.

In light of this clear conditionality, there has been a media storm in Denmark, when a journalistic investigation revealed that several companies that government support had an ownership structure that was associated with tax havens and with a consumer outcry on social media. This prompted one of the companies, a well-known bakery “Lagkagehuset”, to take out full-page advertisements in daily newspapers to counter the criticism and explain the company structure. The CEO also did a lengthy interview on the issue of the company’s ownership structure to a major daily newspaper. 

Two immediate takeaways can be drawn from this:

  1. It has revived the discussion about the usefulness of tax haven blacklists (see more on this by CBS professor Leonard Seabrooke in Danish).  Which countries should be on them, and what does it mean if you as a business (or individual) are associated with a tax-haven on such a list? One thing is clear, measures to push countries into greater cooperation will not in itself comprise a substitute for measures to make companies act responsibly.
  2. It has emphasized the importance of corporate governance including a reflected approach to responsible corporate tax practice. The fact that there are so-called tax havens out there warrants companies and individuals to decide how or if they want to be associated with these. If yes, companies must accept that they may be liable to critique and journalistic and even political inquiry into what that association means. It should come as no surprise that association with these jurisdictions may entail suspicion.

Tax havens are not the only concern in relation to companies’ environmental, social and governance (ESG) behavior in this pandemic. The financial times reported how NGOs and investors are challenging shareholder primacy as it leads to growing inequality. Corporate governance and ESG, including tax, is now more than ever one to watch for companies that wish to be part of a sustainable business community in the short-term and the long-term.

Opportunities in the long term

Recovery packages are short-term measures. However, in the long term,  the pandemic offers an opportunity that must not be missed in terms of taking a serious look at which direction our global society is heading.

While the pandemic, in theory, cannot tell the difference between the poor and the rich, it is clear that the existing inequality in our society is all made acutely visible during COVID-19. In the US more than 40 million have lost their jobs during the pandemic.  In Sierra Leone, there is allegedly just 1 available ventilator in the entire country (for a population of 7 million, where Denmark has more than 1000 ventilators for a population of 5.8 million).  As for the gendered impacts even for the better off, there are indications that women are less able to find time to prioritize research and publishing during the crisis than men are (). While big tech companies look to come out of this crisis more profitable and, possibly, powerful than ever.

These are just examples of how inequality is front and center in this crisis and how it offers an important opportunity to consider if the direction we are heading in is where we want to go.

With many countries having been in a complete]  lockdown and economic activity at a standstill, this presents a unique opportunity to truly rethink how well the existing economy has worked for our societies and planet. The city of Amsterdam in the Netherlands has seized the opportunity to embrace the concept of the doughnut economy and the OECD is arguing that it makes discussions about challenges of digitalization of the economy and a minimum level of tax for MNEs more pertinent.

Tax is the central tool for governments to raise revenue and engage in redistribution. However, it is much more than a technical tool in an administrative toolbox.

It is the modern social contract for individuals and businesses as highlighted by the discipline of fiscal sociology. Short term, long term, whichever way, you approach it tax should, and will, play a central role in the debate about where we want to go from here towards a more sustainable, and more equal, future.

It provides a key source of revenue to finance vital public services, it can act as an explicit redistributive tool central to fighting inequality, and if used wisely, it can incentivize the behavior of corporations and individuals including the transition to more sustainable practices. Some of these things will be discussed at CBS in June.

A timely workshop on corporate tax and inequality

At CBS we are hosting a timely interdisciplinary workshop as a collaboration between the department for Management, Society and Communication, CBS center for sustainability, and the Inequality platform on corporate tax and inequality. We are bringing together researchers from around the world to meet (virtually) and discuss different pieces of research emerging on this relationship. We have legal analysis, economic modelling, qualitative analysis of tax administration efforts, and sociological analysis of tax professionals and wider societal tendencies on the agenda.

Our keynote speaker Professor Reuven Avi-Yonah will give a (virtual) public lecture (SIGN UP HERE) on Thursday 25th of June 2020 at 14:15 CET. He will speak to the short, medium and long term revenue options in light of the pandemic including a chance for a Q & A. He is a renowned scholar and has published widely on international tax, history of the corporate form, and CSR and tax among other topics.

 The workshop concludes on June 26th 2020 with a (virtual) practitioner panel to discuss knowledge gaps (SIGN UP HERE) from the perspective of professionals of various disciplines. Bringing together professionals from media, NGOs, tax advisory services, tax administration and business. This is likely to be a lively debate with the aim of furthering the CBS tradition of engaging the private sector on what could be fruitful avenues for further research in this axis of relevance between tax and inequality.


About the author

Sara Jespersen is a PhD Fellow at Copenhagen Business School. Her research is on the emerging relationship between responsible business conduct and corporate tax planning of multinational enterprises. In a complex governance context, there are now signs of corporations’ self-regulation and the emergence of voluntary standards. Sara is interested in what this means for our understanding of corporations as political actors and the notion of political CSR.


Image by pickpik

Supplier perspectives on social responsibility in global value chains

By Peter Lund-Thomsen

Worldwide there is now a search for new ideas, business models, and innovations that can help us in rebounding from the global impact of COVID-19 and bring our planet and world onto a more sustainable future trajectory. One of the areas where this is evident is sustainability in global value chains where we have seen a global disruption of world trade in ways that have affected not only global brands but also suppliers and workers around the world. Some observers argue that this will result in a global backlash against attempts at making global value chains, for instance, the global garments and textile value chains, more sustainable. I.e. that COVID-19 will make brands and suppliers sacrifice long-term sustainability considerations at the expense of short-term business survival.

In my understanding,however, what these recent events demonstrate is not so much the need for new innovations and “thinking out of the box” but rather considering how the current organization of global value chains and thinking around sustainability have overlooked the importance of “supplier perspectives” on what social responsibility actually means in these chains. Amongst many practitioners, especially in the Nordic countries, there has been a tendency to assume that global brands’ adopting corporate codes of conduct and sustainability standards, asking value chain partners (i.e. suppliers) to implement these, and then auditing for compliance as well as helping suppliers to build capacity to enforce these guidelines would be sufficient.

The case of Bangladesh illustrates why this approach is insufficient. First, many brands have cancelled their orders with Bangladeshi garment suppliers, leaving local factories at the verge of bankruptcy, and hundreds of thousands, if not millions of workers at risk, potentially without any income to support themselves and their families. Second, even with orders that have been completed, some brands have refused to honor their contracts and either not paid for the goods received, substantially delayed payments, or asked for discounts on present or future orders from suppliers.

Globally, there has been condemnation of these “unfair” trading practices by both suppliers themselves (particularly in Bangladesh but also highlighted via social media) and also international labor advocacy organizations.

And third, the level of outrage is so strong that the Bangladesh Garment Manufacturers and Exporters Association has allegedly been considering placing a ban on particular brands so that they may not source garments from Bangladesh in the future as they have largely failed to live up to their “buyer” responsibilities towards suppliers and workers in Bangladesh.

To me, a key lesson learned from these events is that global brands, business associations, labor advocacy organizations, NGOs, researchers and students can no longer simply “overlook” supplier perspectives on social responsibility in global value chains.

The only realistic way forward is to take account of the concerns of these suppliers if global value chains are to be more resilient in the long run.

Many of these supplier concerns are already well-documented but tend to be either ignored or discarded by “global North stakeholders” in their policies, practices or discourses more broadly – for instance, in how they conceive and talk of sustainability in sustainability conferences around the world.

Just to recap some of the main points that we have learned from studies of supplier perspectives on social responsibility:

a) The factory manager dilemma – e.g., factory managers and owners – for instance, in the global garment industry – have had been asked for continuous price declines by many of their buyers while the same brands have asked for increased levels of social compliance at the same time.

b) The same dilemma arises when factory managers are asked to provide living wages around the year by their buyers when demand is seasonal and price competition is fierce in the global garment industry. For most suppliers having workers sitting around idle for part of the year is not a viable business option.

c) In addition, there is a general unwillingness amongst most (but not all brands) to co-finance – for instance, 50% – of the necessary social upgrading of factories in countries such as Bangladesh. Hence, brands tend to push “social responsibility” onto their suppliers rather than co-investing in and jointly bearing the costs of these improvements themselves.

d) Profits earned from selling goods sold to end consumers in the global North remain highly unequally shared amongst the (ironically called) value chain partners – often with suppliers winding up with 10-20 percent of the value of final retail price.

e) In addition to this, global North (read: Scandinavian) stakeholders including brands, government representatives, NGOs, students, and others often perceive “sustainability” in value chains as mainly relating to environmental and (to a lesser degree) social responsibility in the value chain. Hence, the general talk often seems to be about how suppliers should make environmental and social investments without considering the need for addressing existing inequalities – i.e. unequal distribution of value in these chains – and the business aspects of running supplier operations. In fact, for many suppliers in countries such as India, Pakistan and Bangladesh, sustainability is first and foremost related to “economic” or “financial” sustainability. Only when suppliers are profit-making can they afford to invest in social and environmental improvements. This is not exactly rocket-science but a point that often seems to be completely overlooked by Scandinavian “sustainability” advocates.

f) Finally, what is sometimes considered “social responsibility in global value chains” in the global North might be narrowly defined as the payment of minimum wages, overtime payment, social insurance, and the implementation of occupational health and safety measures in supplier factories. Of course, I am all for supplier factories implementing these measures. However, I also sympathize with many suppliers, NGOs and other stakeholders in the global South that point to other aspects of social responsibility that may be more contextualized.

For instance, in South Asia, many studies have pointed to factory managers helping to finance the education/school fees of the children of some of their workers. Financing the weddings of young workers or the weddings of the sons/daughters of their workers is another sign of social responsibility amongst many factory owners in South Asia.

From a Scandinavian perspective, this may not be related to “social responsibility”.

However, in the sub-continent, where your wedding day is often considered the most important day in your life, and very important for your family’s wider social standing in society, employers’ financial support may be seen a very valid act of practicing “social responsibility”.

Providing tea to your workers may also be considered an act of “social responsibility”. Again – from a Scandinavian perspective – this may not be considered a big act of social responsibility. However, then again, is it really that difficult to understand? How many of us in Scandinavia do not value it when our own employers provide us with free tea or coffee? It gives us the opportunity to socialize with our colleagues or take a much needed break between different work tasks. Why should it be any different in countries such as India and Pakistan where tea drinking could almost be considered a national sport?

Moreover, some factory managers in South Asia allow especially young mothers or women with even slightly older children the option of either working part-time (when the kids are in school or someone else is at home to take care of them) or engaging in home-working so that they may look after their kids while engaging in for instance (embroidery) whenever there is a free moment. Of course, I do recognize that home-working is also often associated with receiving very low wages and not having any social insurance.

However, during COVID 19, even in the Scandinavian context, homeworking has become an absolutely essential part of keeping private companies and public institutions afloat crisis under such compelling circumstances. It has also involved many challenges for families with young children who had to engage in home-based work (typically computer-based) and taking care of their children simultaneously.

Yet if homeworking is indeed not only allowed but also encouraged by most employers in Scandinavia, why it is that brands in the global North sometimes impose an outright ban on their suppliers outsourcing particular work tasks to “home-based locations”?

No wonder that many factory owners and managers in the global South believe that global brands practice double standards when it comes to their social responsibility requirements (i.e. ‘do as I say but not as I do’).

In conclusion, there seems to a great need in Scandinavia for raising our own levels of awareness about the commercial challenges faced by suppliers and acknowledge the myriad ways in which “social responsibility” may be thought of and practiced – of course, without throwing out the baby with the bathwater. Compliance with core labor standards remains a key concern, but it is not the only way of conceiving of supplier responsibility in global value chains.


About the author

Peter Lund-Thomsen is Professor at the Department of Management, Society and Communication at Copenhagen Business School. His research focuses on sustainable value chains, industrial clusters, and corporate social responsibility with a regional focus on South Asia.


More about Covid-19 pandemic on Business of Society blog:

Building A Better Planet: Toward a Sustainable Post-COVID-19 Society

Small, yet important – and still responsible. Reflections on SMEs and social responsibility in times of Covid-19

How the pandemic can reset cities and transform aspects of urban mobility

The Coronavirus Pandemic – and the Consequentiality of Metaphors

Sustainable Development, Interrupted?

The Political Economy of the Olympics – Misconceptions about Sustainability

Supply Chain Responsibilities in a Global Pandemic

A Green and Fair COVID-19 Recovery Plan

In Movement from Tanzania to Northern Italy to Denmark

How to make food systems more resilient: Try Behavioural Food Policies

Lobbying and the virus – three trends to take note of


Image by International Labour Organization ILO

Building A Better Planet: Toward a Sustainable Post-COVID-19 Society

By Daniel C. Esty

Covid-19 has dominated policy thinking across the world for several months – highlighting our vulnerability to unexpected threats, the fundamental reality of global interdependence, the critical role of science and data, and the value of collaborative efforts in response to a common challenge. And when the short-term public health crisis abates, the middle-term focus will be on economic recovery. But we should think now about the longer term – and the need to build a sustainable society that steps up to another looming threat: the prospect of destabilizing climate change.  Thus, as we rebuild our economy, we must do so in a way that moves us toward a clean and renewable energy future as well as addressing other pressing sustainability issues including air and water pollution, waste and chemicals management, and our depletion of natural resources.

To help launch the conversation about the pathways to a sustainable future, I offer below 10 key elements to consider. These concepts build on the ideas laid out in the recently released book, A Better Planet: 40 Big Ideas for a Sustainable Future, that emerged from a multi-year research and policy initiative at Yale University, where I teach. For more information on the Yale Environmental Dialogue, please see the website.

1 ) End of externalities

A sustainable future requires that we commit to an end of externalities as the foundational principle for environmental policy.  This starting point would require that we implement the Polluter Pays Principle, which means that those who release air and water pollution or greenhouse gases would have to stop these harms or to pay for their pollution.  Likewise, any user of public natural resources – including water for irrigation, forests for timber, grasslands for grazing, or public lands for the extraction of oil, natural gas, or minerals – would be required to pay full price for the resources they take. 

To be clear, making companies pay for the harms they cause will expose some business models as fundamentally unsustainable and only profitable when externalities are not internalized.  These enterprises will have to remake their business strategies or go under.

2 ) Change in systems thinking

We must acknowledge that we live in a highly integrated world, as COVID-19 has so painfully made clear.  Complex human and ecological systems require moving beyond traditional siloes to systems thinking — and regulatory design that links energy, environmental, and economic policies.  More fundamentally, we must accept the fact that we will need to pursue multiple goals simultaneously and learn to do so in an integrated way that accepts the reality that our goals will sometimes be in tension — and thus need to be traded off and balanced.

3 ) Top-down targets & bottom-up implementation

We must recognize that policy frameworks and structures require both top-down targets and bottom-up implementation. This lesson has become plainly evident in the climate change context, where it is now clear that presidents and prime ministers do not control all the levers of society that must be pulled to deeply decarbonize our economy.

 To achieve a sustainable future, mayors, governors/premiers, and other subnational political leaders – who often control economic development, transportation systems, and other key points of policy leverage — must play a significant role in reducing greenhouse gas emissions and building a more resilient society.

Likewise, business leaders – who also make day-to-day choices that profoundly shape the prospect for moving society onto a sustainable trajectory – must also be included in this conversation.  Fortunately, both the 2015 Paris Climate Change Agreement and the UN Sustainable Development Goals (SDGs) expressly acknowledge the need for broader engagement of exactly this kind.  

4 ) New economic model

New policy tools must replace the 20th Century command-and-control regulatory model with economic incentives and other market mechanisms.  While the government mandates of the past have allowed us to dramatically reduce pollution levels compared to five decades ago, further progress depends on price signals and a commitment to making emitters pay for the harm they cause.

5 ) New roles & various actors

Environmental progress must recognize new roles for various critical actors.  Specifically, in decades past, the business world was seen as the source of pollution problems. But today, most corporate leaders recognize the need to be good environmental stewards so as to maintain their company’s social license to operate. They recognize that old notions about the mission of corporations being centered on shareholder primary and the maximization of profits has given way to a stakeholder model in which businesses have responsibilities not only to shareholders, but also to their customers, suppliers, employees, and the communities in which they operate. 

Individuals are also advancing sustainability in new and important ways that go well beyond their long-recognized role as voters. Specifically, individuals today can make a difference as green consumers who make choices every day about which products to buy and which companies are selling sustainable goods and services. Likewise, a growing set of sustainability-minded investors are tracking environmental, social, and governance (ESG) performance metrics to ensure that their portfolios align with their values – and they hold shares in companies that are showing the way toward deep decarbonization and sustainability more generally. 

And some impact investors are putting money directly into sustainability projects and enterprises with an expectation that their funds will make a difference in society as well as a financial return.

  Finally, all of us with a smartphone can serve as watchdogs — capturing and sharing evidence of environmental wrongdoing on social media.  We are also all positioned to offer comments and participate in public environmental debates in many places and ways that were not possible prior to the Internet era.  This expanded access should deepen public participation and improve the diversity of perspectives that get factored into policy decisions.

6 ) Sustainable markets

We need sustainable markets that incorporate new lessons from various emerging fields of science and other emerging academic disciplines. Industrial ecology, for instance, offers new methodologies for mapping the flows of energy and materials across the economy.  In this regard, as we rebuild business in the many sectors devastated by the Covid-19 pandemic, we should look sector-by-sector for opportunities to create closed loop production processes that generate zero waste.  Such a system would focus on water recapture and the reuse and recycling of other materials.

We might, in this spirit, shift away from plastic packaging that generates greenhouse gas emissions as it is produced and too often accumulates after use in the ocean – and move toward fiber-based materials that can be more easily recycled or composted.

7 ) New tools & Big Data

Policymakers have a set of new tools at their disposal that can be deployed in support of a sustainable future.  Big Data, in particular, has abundant applications that can help us to reduce environmental impacts – tracking emissions, identifying best practices in pollution control and natural resource management, and providing metrics that help us to identify policy leaders to emulate and laggards who should be spurred to do better.  And while 21st information and communications technologies have transformed how sports teams pick players, businesses market to their customers, and all of us make purchases, technological solutions have done rather little to reshape the environmental realm.  But recent advances in data analytics, genomics, artificial intelligence, and machine learning all show significant promise for having important environmental applications.

8 ) Ethical foundation

We must build an ethical foundation for 21st Century sustainability that captures the public’s evolving thinking about core values and fundamental principles. Most notably, the idea of environmental justice and concerns about equity and inequality make it clear that our policy programs must pay attention to who benefits from environmental commitments and who gets ignored.

Indeed, who pays for environmental inaction – including lead exposure from aging water pipes or asthma risk when urban air pollution is not abated – has become a fundamental question. 

As we seek to “build back better” after COVID-19, climate change equity issues need to be given a more prominent role – both the intergenerational burden that the build-up of greenhouse gases in the atmosphere threatens to leave for today’s young people and the reality that movement toward a clean energy future will dislocate some communities, industries, and demographic groups in ways that will require transition assistance.

9 ) New ways of communication

We need a new approach to environmental communications and a commitment to translate expert guidance and science to the public in a manner that makes sense to everyday citizens. Tony Leiserowitz and the Yale Program on Climate Change Communication have demonstrated, for example, that political leaders must learn to distill and effectively translate scientific concepts and results to the public.  And as Thomas Easley makes clear in his Better Planet essay “Hip Hop Sustainability,” we need new strategies that bring the climate change conversation to inner cities and other subsets of society in a way that engages those communities in their own language and on their own terms.

10 ) Innovation

Finally, a spirit of innovation must permeate the push toward a sustainable future.  To create an environmental policy framework that is lighter, faster, and more effective than our regulatory programs of the past, we must harness the entrepreneurial capacity and creativity that exists all across the world.  Innovation broadly-conceived has already brought us technology breakthroughs in wind, solar, tidal, wave, and fuel cell power. But we must seek innovation beyond the technology domain. We need to be equally committed to fresh thinking and new approaches to finance and investments in clean energy, government policies and incentives, public engagement strategies, and public-private partnerships. 

Such innovation can reduce the cost of creating a sustainable future and diminish the perceived tradeoff between environmental progress and economic prosperity.

Despite recent challenges, the promise of a more sustainable society seems ever closer, but still just over the horizon.  Progress thus depends on sustainability pioneers who are willing to run out front, innovate broadly, take on risks, accept failures (and redeploy resources quick when unsuccessful pathways are identified), and redouble their commitment to efforts that show promise.

This commentary builds on Dan Esty’s April 2020 virtual lecture at Copenhagen Business School and the University of Copenhagen.


About the author

Dan Esty is Hillhouse Professor of Environmental Law and Policy, Yale School of Forestry & Environmental Studies and Yale Law School


More about Covid-19 pandemic on Business of Society blog:

Small, yet important – and still responsible. Reflections on SMEs and social responsibility in times of Covid-19

How the pandemic can reset cities and transform aspects of urban mobility

The Coronavirus Pandemic – and the Consequentiality of Metaphors

Sustainable Development, Interrupted?

The Political Economy of the Olympics – Misconceptions about Sustainability

Supply Chain Responsibilities in a Global Pandemic

A Green and Fair COVID-19 Recovery Plan

In Movement from Tanzania to Northern Italy to Denmark

How to make food systems more resilient: Try Behavioural Food Policies

Lobbying and the virus – three trends to take note of


Image by Free images

Small, yet important – and still responsible. Reflections on SMEs and social responsibility in times of Covid-19

By Søren Jeppesen

One thing seems to be clear by now – that we are all challenged by the effects of the Covid-19 pandemic. This includes all enterprises, large as well as small firms. As states and individuals, also SMEs (Small and Medium-size Enterprises) need to figure out how to respond. SMEs constitute the vast majority of enterprises on the Globe, and their response to the current situation, including how they behave in terms of social responsibilities matter a lot. If jobs disappear, or wages are lowered and/or working conditions deteriorate, a large number of persons (employees) and families will be negatively affected. If environmental standards are lowered the nature and humans will be negatively affected.

The perception of what constitutes social responsibilities varies substantially across countries. As SMEs in different parts of the world face very different situations (see Spence et al. 2018), also in times of Covid-19, the responses will be very different. We already witness intense debates on what is the ‘appropriate way’ of reacting. Most SMEs have a less formalized way of operating compared to larger firms. While this is viewed as leading to being less socially responsible compared to large firms this type of organizing – not being so standardized – maybe be is an advantage in an unknown situation like the one that we are witnessing right now. Agility, creativity and ability to make a decision fast could be an advantage right now like the Danish small firms that have adjusted their production to include critical health products show.

However, the examples are probably the exceptions rather than the rule as only a smaller section of the SMEs typically can be characterized like this. The majority of the SMEs are operating in more traditional, standardized ways and have a more limited range of responses as things stand right now.

In our part of the world, governments have implemented numerous support schemes trying to assist the private sector, including SMEs, in various ways. The Danish SME has various public-funded support packages and a highly formalized labour market cushioned by a number of social benefit programs to factor into the considerations. Hence, we can insist that an important part of managing continues to be keeping an eye on working conditions and the environmental impact. In other parts of the world like the developing countries, governments have so far done less and given the much more informal nature of the economies, SMEs are much harder effected.

The Ugandan SME is faced with no economic assistance and a complete lockdown of the society leading to a dramatically reduced – if not totally halted – operation and turnover. In addition, no social benefits exist to assist employees who are losing their job. So, the overarching topic concerns the socio-economic dimensions of how many SMEs that survive while retaining a good number of the staff – or on the more pessimistic side – how many that go down leaving scores of people unemployed and without an income affecting individuals as well as tons of families.

What can we then expect in terms of social responsibilities in such a situation? Given that some developing country SMEs are characterized as having ‘family-like culture’, we would expect such enterprises to retain the employees (Tran and Jeppesen, 2016). Even though the SMEs retain the employees, owners and managers personally have to handle the insecurity that accompanies the situation as well as relating to the concerns among the employees.

The family-like type of organization could ensure that employees are kept and not fired. Still, we know that a number of SMEs pay little if any wages in times of limited production. Hence, having a job with no income does not make a difference right now.

Small enterprises in developing countries are also praised for their community engagement in taking up activities ensuring women (Langevang et al, 2015) or young people income. The localized response may assist in various ways of helping citizens in dire need. Religion and which church that you are a member of play a role. Some churches, as well as the wealthier members (and among these SME owners and managers), come forward to assist their congregation and the less well-off families in times of need. 

We need to wait for the answer to whether and to what extent Covid-19 will be marked by resilience and a protective and more caring (social) response by SMEs – or rather by the tough reality of downsizing and/or closing down with numerous dire consequences.


References

Langevang, T., Gough, K. V., Yankson, P. W., Owusu, G., & Osei, R. (2015). Bounded entrepreneurial vitality: The mixed embeddedness of female entrepreneurship. Economic Geography, 91(4), 449-473.

Spence, Laura J., Jedrzej George Frynas, Judy N. Muthuri, Jyoti Navaret, 2018. Research Handbook on Small Business Social Responsibility: Global Perspectives. Edward Elgar Publishing.

Tran, Angie Ngoc & Søren Jeppesen. 2016. SMEs in Their Own Right: The Views of Managers and Workers in Vietnamese Textiles, Garment, and Footwear Companies. Journal of Business Ethics, 137(3), 589-608


About the author

Søren Jeppesen is Associate Professor at the Department of Management, Society and Communication at Copenhagen Business School. His research concerns the development of firms in developing countries. He focuses on SMEs, CSR and driving forces (or lack of same) for strategies of SMEs in developing countries in engaging in CSR (or not engaging).


More about coronavirus pandemic on Business of Society blog:

How the pandemic can reset cities and transform aspects of urban mobility

The Coronavirus Pandemic – and the Consequentiality of Metaphors

Sustainable Development, Interrupted?

The Political Economy of the Olympics – Misconceptions about Sustainability

Supply Chain Responsibilities in a Global Pandemic

A Green and Fair COVID-19 Recovery Plan

In Movement from Tanzania to Northern Italy to Denmark

How to make food systems more resilient: Try Behavioural Food Policies

Lobbying and the virus – three trends to take note of


Image by US Army Africa

How the pandemic can reset cities and transform aspects of urban mobility

By Isabel Froes

Cities are hard and complex systems. With their defined policies, grids and routes, they offer limited space for experimentation, with a low threshold for any type of interference to their regular flow.  To test and prototype [1] in the urban, besides dealing with regulatory procedures, require clear indications of the positive impact those tests might bring. Thus, any change in routine flows is disruptive and not necessarily welcomed by all.

Some of these difficulties have become explicit during the processes carried out by various cities in four EU funded neighbourhood projects, Cities-4-People, Sunrise, MUV and Metamorphosis [2]. These projects have brought together citizens and other key city stakeholders to identify and co-create mobility solutions and approaches to tackling local problems. Each project has had a distinct goal, but all are part of the CIVITAS initiative focusing on ‘sustainable neighbourhood mobility planning and have been running since 2017, with three of them to end in 2020 and another in 2021. In the case of the Cities-4-People project, running in the cities of Hamburg, Istanbul, Oxford, Trikala and Budapest, cities, citizens and transport authorities have worked closely together to co-create and implement solutions addressing congestion, bike parking, safe and new routes to reach public transportation, and more [3].

Primarily, one of the biggest difficulties in deploying urban prototypes deals with permissions, space sharing, closing parts of or an entire street, or pavement, changing traffic routes, etc.

Even when implementing aspects citizens see as valuable and beneficial, such as bike racks, paths, during construction, these processes tend to be perceived as a nuisance. Another aspect stems from the fact that, unless it is a whole new city or neighbourhood been planned, the city, as a canvas, is never blank. Therefore, cities are constantly bound to develop solutions, which are imposed over an existing and fixed grid with very little wiggle room. All true, until March 2020.

The pandemic, through lockdowns and other movement restrictions, has changed the flow of cities almost overnight. For the first time, since the widespread city development focusing on automobiles, cities have had a chance to look at their now empty public spaces and rethink their use and purposes. These changes have forced the neighbourhood projects into a sudden halt, as people’s engagement with urban spaces has been very limited. However, while physical workspaces, shops and many businesses closed their doors, with citizens mostly at home, cities have encountered an unprecedented opportunity to rethink their streets.

In two related mobility examples, Vilnius, Lithuanian capital, the city Mayor has opened up eighteen of the city’s public spaces, free of charge, to bars and restaurants, so they can run while keeping the required social distancing [4].

In Milan [5], over the summer, the city will engage in a large-scale urban prototype, deploying 35km of temporary biking lanes and enlarged pavement areas.

While the city slowly opens up, with most employees still working from home and not commuting as much, citizens, when going out, should have enough space to keep a safe distance, while also experimenting in environmental friendly modes, such as walking and biking.

When some of the neighbourhood projects, such as Cities-4-People, resume in a few months, their cities and citizens might have changed. However, instead of considering the data that has been collected in the projects prior to the lockdown as ‘outdated’ or no longer valid, these projects can consider repurposing this data, using it as a robust baseline to be compared with post lockdown. From a mobility perspective, this ‘new normal’ might prove itself a valuable mobility asset. As people return to their streets, they can experience these known spaces in new formats encountering novel mobility patterns, where people and businesses can repopulate streets differently, reconfiguring city flows.

Furthermore, some of these temporary changes might prove to be popular and become permanent, promoting not only better mobility, but also lower pollution and improved air quality [6], indirectly helping cities leapfrog into achieving some of their sustainable development goals (SDGs). The opportunity to reset busy urban centres is rare; however, as it has occurred and continues to run with the pandemic, more cities and citizens have the unique chance to engage and exploit their cities’ canvas in new ways to seize their days.


References

[1] Implementing a temporary solution

[2] https://civitas.eu/projects/research

[3] https://cities4people.eu/

[4] https://www.theguardian.com/world/2020/apr/28/lithuanian-capital-to-be-turned-into-vast-open-air-cafe-vilnius

[5] In Milan, the lockdown brought a city to an almost complete stand still, decreasing an endemic congestion problem by 30-75%, thus improving air quality. https://www.theguardian.com/world/2020/apr/21/milan-seeks-to-prevent-post-crisis-return-of-traffic-pollution

[6] https://www.mckinsey.com/industries/automotive-and-assembly/our-insights/the-impact-of-covid-19-on-future-mobility-solutions?cid=soc-app


About the Author

Isabel Fróes is a postdoc at MSC Department at Copenhagen Business School working in two EU projects (Cities-4-People and iPRODUCE) dealing with distinct aspects of urban services and sustainability. Her latest publications deal with urban planning and co-creation based on results from the Cities-4-People project. Isabel also has wide industry experience and has worked both as a user researcher and service design consultant for various companies in Denmark and internationally. For more detail please see her Linkedin profile  


More about coronavirus pandemic on Business of Society blog:

The Coronavirus Pandemic – and the Consequentiality of Metaphors

Sustainable Development, Interrupted?

The Political Economy of the Olympics – Misconceptions about Sustainability

Supply Chain Responsibilities in a Global Pandemic

A Green and Fair COVID-19 Recovery Plan

In Movement from Tanzania to Northern Italy to Denmark

How to make food systems more resilient: Try Behavioural Food Policies

Lobbying and the virus – three trends to take note of


Photo by ?? Claudio Schwarz | @purzlbaum on Unsplash

The problem with CSR: why companies need to listen to their activist employees

By Luda Svystunova and Verena Girschik

The current pandemic has exposed blatant social injustices and inequalities around the world, prompting businesses to face their societal impact. Before the crisis, however, a rising wave of employee activism had already started to call into question the extent to which companies had managed to meet their moral obligations. Employees at Wayfair, Microsoft, Google, Twitter and Amazon have protested against their employers’ stance on issues ranging from climate change to migration, pushing them to deliver on public commitments or refusing to contribute to morally dubious projects, such as Amazon’s facial recognition software that had potential to contribute to racial discrimination.

As the crisis has provided ample opportunities to reflect on and reconsider the role of business in society, we believe that this is the time to learn from employee activism – and to learn to embrace it as a force for change.

The problem with CSR

Virtually all companies today pursue a CSR agenda, strengthened by the global agreement around Sustainable Development Goals (SDGs), the growing power of corporate sustainability rankings, standardization of sustainability reporting and the proliferation of consultancies who offer support to companies pursuing a shared value approach to social responsibility. Aligning business and societal value creation, such approaches promise win-win solutions in addressing social ills. Yet it is the very promise of win-win solutions that undermines critical engagement with companies’ roles in creating or reproducing social ills.

First, CSR has become the corporate worlds’ dominant paradigm for change that is positive and comfortable. If CSR managers want to avoid eyerolls, especially from top managers and shareholders, they need to speak the language of profit and present a measurable business case for addressing social ills. By enabling companies to do well by doing and looking good, however, CSR may also cultivate complacency. This does not mean that CSR has failed to encourage companies to embrace more responsible business conduct. But it is a potent substitute for engaging with the many uncomfortable social problems as to which companies have hitherto failed to do the right thing.

Second, the triumph of CSR is symptomatic of and reproduces social inequalities. CSR is driven by privileged employees and managers often based in the corporate headquarters – members of the organizational elites. The voices of others in the company, as well as the people affected by corporate activities, are seldomly included. Indeed, Kaplan (2020) suggests that the business case alienates employees and does not deliver on promises to stakeholders. Misguided CSR initiatives can actually make things worse for those they aim to help. By limiting attention to win-win solutions, CSR has failed to pay attention to those who lose.

How can employee activism help?

Activist employees are those employees that care about and actively promote social justice in their company. With this, we call upon companies to stop viewing employee activists as antagonists or nuisance and instead invite activism in order to face problems head on. Specifically, we suggest that companies should consider the following:

1 ) Accept activist employees rather than “handle” their dissent.

Activist employees bring to the front the less comfortable social problems that a company creates, reproduces, or in other ways is complicit in. Commonly, companies manage dissent by firing those employees who speak out against corporate misdeeds. Activist employees’ voices may be uncomfortable, but if fired, they will certainly still be heard – if not by management, then certainly by the public.

2 ) Listen to dissenting voices and engage with uncomfortable truths.

Employee activists can help by shedding light onto just such areas where businesses may have missed the mark. Representing social movements inside the company, they generate awareness of problems it may have missed or not taken seriously and even contribute to solutions. Most importantly, the break with the complacency of corporate CSR practice and drive the more radical change that is so badly needed.

3 ) Confront privilege and listen to employee activists

Companies should be mindful of who gets to have a say in the issues that matter. It is easy to overlook issues voiced by activists on the ground – across the operations and especially in distant local offices. Yet they are often the ones with a first-hand understanding of social ills as well as externalities produced by the company.   

4 ) Tackle social injustices within.

Not all employee activism is driven by personal values and compassion for others: alongside staff walkouts for greener business at Google and Amazon, Google’s temporary workers and Amazon’s warehouse employees fight for fair labour conditions. In tackling social ills, companies should never overlook the struggles of their own employees.

CSR is still needed, but we can do even better. What we are proposing is inconvenient, disturbing, and uncomfortable, but it’s time for companies to get things right.


Our critique of CSR is inspired by the following contributions:

de Bakker, F. G., Matten, D., Spence, L. J., & Wickert, C. (2020). The elephant in the room: The nascent research agenda on corporations, social responsibility, and capitalismBusiness & Society, in press.

Feix, A., & Philippe, D. (2020). Unpacking the narrative decontestation of CSR: Aspiration for change or defense of the status quo?Business & Society59(1), 129-174.

Kaplan, S. (2020). Beyond the business case for social responsibilityAcademy of Management Discoveries, 6(1), 1-4. 

Khan, F. R., Munir, K. A., & Willmott, H. (2007). A dark side of institutional entrepreneurship: Soccer balls, child labour and postcolonial impoverishmentOrganization studies28(7), 1055-1077.

Schneider, A. (2019). Bound to Fail? Exploring the Systemic Pathologies of CSR and Their Implications for CSR Research. Business & Society, in press.


About the Authors

Luda Svystunova is a Lecturer in International Management at the Institute for International Management, Loughborough University London. Luda’s research examines multinational firms’ interactions with their non-market context through corporate social responsibility and corporate political activity, particularly in non-Western settings. She is also interested in the role individuals within and outside companies play in these interactions. Luda’s Twitter: @LudaSV

Verena Girschik is Assistant Professor of CSR, Communication, and Organization at the Department of Management, Society and Communication, Copenhagen Business School. Verena’s research focuses on the responsibilities of companies in the contexts of complex societal problems and humanitarian crises. Interested in relations between companies, governments, NGOs, and other societal actors, her research explores how companies negotiate their roles and responsibilities, how they perform them, and to what consequences. Verena’s Twitter: @verenaCPH


Image by GeekWire Photo / Monica Nickelsburg

Lobbying and the virus – three trends to take note of

By Dieter Zinnbauer

Writing about anything in relation to Covid-19 is rather hopeless. Any attempt to describe current developments has a half-time of 30 minutes. Any attempt to speculate what lies ahead drowns in the flood of near infinite plausible trajectories. And any and every attempt usually ends up with the hammer and nail problem, resulting in the author pushing his favorite pre-existing policy to ask  as an essential ingredient in the crisis response, much as the whole world looks like nails when you hold the proverbial hammer in your hand.

Nevertheless here a foolish attempt to jot down some small observations of how the Covid situation is currently influencing how businesses lobby government, or in jargon corporate political activity. In a nutshell: there are indications that there is more, that it is more conventional and that integrity in lobbying is more in demand than ever.  In detail:

1) A lot to win and a lot loose means a lot to do or: “Everybody is upside down. All the clients are upside down” (US lobbyist)

Lobbying is typically understood as anti-cyclical as it tends to experience an uptick in economic downturns. Yet this time is a difference in scale and a difference in kind. Covid-19 is an essential threat to a vast array of industries and companies that until a few weeks ago looked very solid. At the same time, the scale of financial support and transformational depth of regulatory responses that are being considered and dispersed are absolutely unprecedented in the post WW2 era.

Existential stakes convert into a sharp increase in lobbying. Recent data shows that lobbying spending in the US has climbed to near-record levels already and the centrepiece of legislation, the Coronavirus Aid, Relief and Economic Security Act is the second most lobbied upon a piece of legislation.

There are new clients – that also fuel the lobbying boom – three quarters of lobbying filings in the US that mention COVID issues are by new principals. And there is a flourishing new service line out there helping companies shape new rule-writing and expedite approval for their anti-corona products. Many are desperate, everyone is out to get a piece of the cake and as even the most adept watchdogs have a hard time with tracking all proposed rule-changes and handouts it may also be a good time to slip in this long-coveted, yet unrelated regulatory tweak in one’s own favour that otherwise might have not withstood public scrutiny.

2) Forward to the basics tools, tactics and incumbents.

It seems likely and there are indications that corporate political activity is for the time being concentrating on tried and tested tools and relations. First, the Covid-19 response is the hour of the executive as the first phases of the policy response are firmly driven by the executive in most countries around the world. Emergency powers are being invoked, far-reaching policies are hastily cobbled together in small committee, and implemented qua executive orders. Ex-ante legislative deliberation is compressed, public consultations are limited and judicial reviews are only slowly kicking into gear.  All this means that lobbying is currently heavily focused pragmatically on very tangible outcomes and the executive branch of government as for example, a top German lobbyist has described in a recent interview.

Expected budget cuts and trimmed client accounts for public relation agencies in the first-affected Asia-Pacific also suggest that more sophisticated upstream strategies for framing and influencing public debates in the longer run are being put on the backburner and efforts are shifting towards core government relations work. Add to this that social distancing measures and going virtual makes it difficult to cultivate new relationships. As a result, existing, networks and long-time friends who may have walked through the revolving door between public office and private practice carry the day dealing substantive incumbency advantages to the already well-connected and established players both in terms of in-house lobbying departments and hired firms.

3) An incipient debate about the fundamentals close to home – and high stakes for integrity

Financial distress and zero-sum dynamics in what are ultimately finite support programs demand maximum resolve when making one’s case to the government. Many more interests than usually have come to the fore to compete for the pie and some of these competitors can be expected to act very opportunistically. All this puts enormous stress on integrity in lobbying. But this comes at a time when the integrity of the corporate political activity is perhaps more important than ever. 

Policy-makers enter into uncharted territory with many of their interventions and stabilization efforts. Peak uncertainty means they need accurate information on the situation of different interests and stakeholder groups and how they may be affected by different policy options. Policy-makers need more of this information more urgently than ever. Extreme fragility means that the consequences of mis-judgments are substantive.

All this highlights how important the honest, proportionate, evidence-supported articulation of interests and concerns to government is at this moment in time. In the eye of the public business appears to be largely failing in this area. Less than 40% of respondents in a very recent 11-country survey – the spring update to the 2020 Edelman Trust Barometer –  perceived business to be a reliable source of useful and accurate information during the pandemic, a number that dropped to even more staggering lows of 24% and 15%  in France and Japan respectively.

Yet, the relevance of credibly upholding integrity in lobbying goes even deeper. The specter of special interests hijacking the Covid response looms large as a tremendous PR nightmare. Such a storyline is ready to combine with the bitter aftertaste of the last financial crisis response that many perceived to be undermined by strong industry lobbying. The prospects of a special deal for special interests could thus further inflame the very anti-business sentiments that are already on the rise: in the same survey as referenced above respondents put business CEOs last when thinking which types of professions and leaders do a good job in meeting the demands the pandemic puts on them, while only 38% thought business did a good job in putting people before profits.

Pushing public opinion that is already at the edge further into the negative territory through reckless corporate political activity looks like a bad idea even from a narrow tactical perspective. This is because another fallout from Covid is an emerging public debate about the basic bargain between business and the public and the increasing readiness to consider options for a fairer settlement that until recently seemed to have difficult to find acceptance in the mainstream.

The 11-country Edelman survey again captures some of these sentiments: a remarkable 64% of people agreed with this statement:

“This pandemic has made me realize how big the gap in this country is between the rich and the working class, and that something must be done to more fairly distribute our country’s wealth and prosperity”

Massive public financial support is a great lever for updating the social licence to operate for the corporate world. This is not a theoretical possibility but has already become a reality. Widely discussed provisions to bar companies that engage in overly aggressive tax planning or pay out dividends in times of crisis from benefiting from post-Covid support is one example. So is the observation that a debate about the legitimacy of share buy-backs that despite its policy relevance was more or less confined to the fringe of experts and specialized advocates all of a sudden features prominently in the policy mainstream. It has even prompted the European Commission to require a ban on share buybacks as a central condition when government prop up companies by acquiring equity ownership.

This public limelight for a seemingly arcane issue is well deserved considering that for example the top airlines in the US that are currently clamoring for public support are estimated to have spent 96% of their free cash flow during the last decade on share buybacks and built no meaningful reserves to weather a major crisis, a strategy termed by a banker from a top firm as “a staple arrow in the quiver of companies… to optimize how they drive the most value for their shareholders”. From a corporate lobbying view not particularly productive narratives to feed any more.

Many, including this author, view this as a much needed and welcome conversation about how to refresh the principal compact between business and society in view of sharing the benefits and costs from business activity fairly and within planetary boundaries. Business will not do itself a favor when flexing its lobbying muscle too hard for special treatment at this point in time when the public is increasingly prepared to doubt and revisit the basic tenets of this compact.

Responsible corporate activity, transparent, well-governed and aligned with purpose, planetary boundaries and broader regards for all stakeholders is not a nice add on for good times. It is essential to protect the public trust in functioning institutions, functioning crisis response and a functioning societal bargain with business. This is not the time to call in special favours and push a narrow agenda. This is the time to do act as a responsible corporate citizen on all fronts and particularly when it comes to government engagement.

Now there it is:  my policy agenda framed as essential in Covid times. The whole world looks like nails when you have a hammer in the hand.  But in this instance, of course, it is for real.


About the author

Dieter Zinnbauer is a Marie-Skłodowska-Curie Fellow at CBS’ Department of Management, Society and Communication. His CBS research focuses on business as political actor in the context of big data, populism and “corporate purpose fatigue”.

Twitter: @Dzinnbauer

Essays: https://medium.com/@Dzinnbauer

Working papers:  https://papers.ssrn.com/sol3/cf_dev/AbsByAuth.cfm?per_id=1588618


More about coronavirus pandemic on Business of Society blog:

The Coronavirus Pandemic – and the Consequentiality of Metaphors

Sustainable Development, Interrupted?

The Political Economy of the Olympics – Misconceptions about Sustainability

Supply Chain Responsibilities in a Global Pandemic

A Green and Fair COVID-19 Recovery Plan

In Movement from Tanzania to Northern Italy to Denmark

How to make food systems more resilient: Try Behavioural Food Policies

Photo by Dieter Zinnbauer

How to make food systems more resilient: Try Behavioural Food Policies

By Lucia A. Reisch

The vision of healthy and sustainable food systems that facilitate appropriate food choices by individuals is gaining momentum in practice and in the marketplace. As the single strongest lever to optimize both human health and environmental sustainability, the food choices we make matter in multiple ways – for our bodies, the environment, and the economic and social fabric of societies. Acknowledging and actively harnessing co-benefits of “win-win diets” is a major focus of current food, farm, environmental, and health policy that aims to positively influence consumer behaviour. A behavioural turn in food policy that puts individuals and their choices at center stage holds promise for manifesting the vision of healthy and sustainable food systems.

As we collectively ponder lessons learned from the coronavirus pandemic, a key aspect will be to consider how to increase resilience of societies and economies in general and food systems in particular, to better endure a crisis in the future.

The Food and Agricultural Organization (FAO) defines resilience as ‘the ability to prevent disasters and crises as well as to anticipate, absorb, accommodate or recover from them in a timely, efficient and sustainable manner. This includes protecting, restoring and improving livelihood systems in the face of threats that impact agriculture, nutrition, food security and food safety.’ [1]

Food chains today are long and globalized, and retail systems are streamlined for efficiency with just-in-time inventories, all adding to the vulnerability of systems. While the basic food provision in Europe continued during the pandemic (not least due to the availability of local food chains), cracks appeared at the retail level with shortages of staples. Admittedly, many shortages were due to stockpiling by frightened people – a behavioural factor rather than a reflection of true supply shortages. One can speculate now that if the crisis were to continue, other dependencies (for instance, on mostly Eastern European farm workers for harvesting) will become obvious.

In a healthy and sustainable food system, the products that are grown, processed, and distributed are health-supporting, safe, environmentally and climate friendly; farmers and laborers work for fair wages under decent conditions; and on the demand side, equal and easy access to affordable, healthy, and sustainable diets as well as nutrition security are provided for today’s and future generations. This sounds like a utopia but it is our future.

The EAT Lancet Commission on Healthy Diets for Sustainable Food Systems recently defined a concrete healthy reference diet that, if applied, can be provided “for an anticipated world population of nearly 10 billion people by 2050 and still stay within a safe operating space on Earth” (Willett et al. 2019).

Balanced and sustainable food systems that stay within the planetary boundaries and provide a minimum level of safety, access, and equity are doubtlessly more resilient – i.e., more robust in times of shocks and crisis – than lean, efficiency-maximizing, far-flung global supply systems. The advantages and necessity of system resilience are likely to constitute one big learning from the pandemic.

Another big learning is that consumer-citizen behaviour is much more malleable and adaptive than many policymakers (and researchers) had thought. People are able and ready to quickly change deeply ingrained habits, adopt new practices (social distancing, home cooking), and adhere to new social norms (wearing masks, hand washing) if – important qualifier – the reasons seem (scientifically) sound, are limited to a bearable time span, and are well explained by a trustworthy government.

Some governments (Sweden, e.g.) rely on voluntary action and “nudging” alone; others (Germany, e.g.) combine harsh bans, intense risk communication, and behaviourally informed policies such as warnings, framing, priming, reminders, defaults, and boosts. We don’t know yet which strategies will work best, but it has already become clear that much can be achieved by using behavioural insights, calling on the responsibility of people, giving positive feedback and reminders, and harnessing the power of (dynamic) social norms and peer pressure.

In the words of the great Danny Kahneman: good policy needs to activate both types of people’s decision-making: the quick, intuitive, emotional “System 1” and the slow, cognitive, deliberate “System 2”.

It is not a new idea that insights into the biases and heuristics, the habits and motivations of consumers can be useful to design effective policies. This is the essence of the new field of Behavioural Public Policy that constitutes these days an International Association of Behavioural Public Policy. The evidence is increasing that a behavioural approach can indeed help design better food policies. What we call Behavioural Food Policy puts people’s needs, biases, and decisions at center stage, offering a specific behavioural lens to existing (hard and soft) policies that can make them more effective. It relies on governance processes that are based on empirical, often experimental testing, learning, and adapting. Public deliberation and participation in these processes help consumer-citizens understand and eventually approve of the policies. This potential of behavioural policies to shift habits and food demand is under-utilized but growing.

This approach is echoed by the global climate change community in the Intergovernmental Panel for Climate Change (IPCC) upcoming 6th Assessment Report. [2] The report identifies two major behavioural changes that substantially mitigate greenhouse gas emissions: avoiding food waste and dietary shifts to plant-based nutrition. As to the former, simple behaviour such as meal planning and creative use of leftovers can help reduce food waste on the individual level; retail can adjust its marketing, and regulators can improve the handling of expiration labels and best-before dates. Regarding the latter, reducing (mainly ruminant) meat consumption and substituting animal protein with field-grown protein are seen as major steps. A diet light in meat is better for one’s health, leads to greater animal welfare, helps reduce food-borne diseases and food crisis, and produces less greenhouse gas emissions. Because individual choices are the basis of any healthy and sustainable food system, understanding and influencing consumer behaviour is a promising route to achieving sustainability, resilience, and healthfulness of our food systems and society generally.


References

[1] http://www.fao.org/emergencies/how-we-work/resilience/en/.

[2] The author is a contributing author to this IPCC AR6 chapter.


About the author

Lucia A. Reisch is Professor of consumer behaviour and consumer policy at the Department of Management, Society and Communication (MSC) within the CBS Sustainability. Her research focuses on behavioural economics, behavioural public policy, sustainable consumption (in particular, energy, food and health, active mobility and fashion), intercultural consumer behaviour, consumers and digitization, as well as consumer policy.


More about coronavirus pandemic on Business of Society blog:

The Coronavirus Pandemic – and the Consequentiality of Metaphors

Sustainable Development, Interrupted?

The Political Economy of the Olympics – Misconceptions about Sustainability

Supply Chain Responsibilities in a Global Pandemic

A Green and Fair COVID-19 Recovery Plan

In Movement from Tanzania to Northern Italy to Denmark


Photo by Chad Stembridge on Unsplash

In Movement from Tanzania to Northern Italy to Denmark

By Lisa Ann Richey

This article is based on her previously written piece for the Centre for Business and Development Studies.

My first memory of the Corona virus, before we became politicized enough to refer to it as COVID-19, or the “new” Corona virus—or for some special politicians, the “Wuhan” virus—was in Tanzania. Enjoying the evening breeze from the Indian ocean in the public area of our workshop hotel, I sat with a couple of our research team members catching up on life via apps on the smartphone. I came across a small shitstorm on my social media about our Prime Minister Mette Frederiksen. Technically speaking, she is not ‘my’ Prime Minister as my citizenship application was denied last year on the grounds of having spent too much time living outside of the country in South Africa, Italy and the US during the past 20 years. The “Wuhan virus” bleach-your-lungs guy, is actually the current head of the nation where I vote.

Yet, our Prime Minister Mette Frederiksen was in the media adamantly refusing to issue a public apology for a Danish cartoon that had been published on January 27th by Jyllands-Posten, a second-rate, nationally distributed newspaper, infamous for publishing the 2005 “Muhammed cartoons” which led to international violence, boycotts and around 200 deaths. The latest cartoon was a drawing of the Chinese flag with its five gold stars replaced by five virions of Corona. China’s embassy accused the cartoonist of insulting China and demanded an apology. The Danish Prime Minister refused and her response is on record as saying ‘we have freedom of expression in Denmark – also to draw.

Most politicians and many Danes supported the cartoonist, attributing the outrage of many Chinese as ‘cultural difference.’ The newspaper editor defended that the publication was not ‘poking fun of the situation’ stating: ‘We cannot apologise for something we don’t think is wrong. We have no intention of being demeaning or to mock, nor do we think that the drawing does. As far as I can see, this here is about different forms of cultural understanding.’ When the Corona flag was published, 100 deaths from the virus had been documented in the Chinese city of Wuhan and ‘cultural’ understandings of right and wrong ways to portray the virus, to call its name, to recognize its symptoms, to document its death rates, to protect citizens within closed borders were just beginning.

But it was only January, and our international research team starting a five-year project on how people outside of the formal humanitarian sector respond to crises in Tanzania, had no idea the ways that this Coronavirus would come to affect us. We still don’t. We live quite specifically in Copenhagen, Dar es Salaam and London. But many of us are a bit of an Afropolitan/Cosmopolitan mish-mash by parentage— Chagga/Meru, British/Dane, American/Italian, Kenyan/Tanzanian and we have lived across various countries in Africa, Europe and Asia for work, studies, or by the accident of birth. We are all employed by the state in university jobs. For all of us, these are good jobs. We are comfortable. But, now, we are uncomfortable.

We are in different stages of our careers—from doctoral students to full professors—and these days, as the global pandemic settles over all of us in different and forcibly separate parts of the world, we feel differently the burdens of different responsibilities. One of our team wrote to me: ‘I work like hell while managing a family who is also sick and tired of being locked up… I’m trying to manage 200 staff members’ teaching, supervision and examination responsibilities, plus their externally funded research projects, their problems with spouses, kids and dogs… I want my life back…’

Another of us had to travel upcountry to Kilimanjaro to look after her ageing mother who lives alone on a farm. I imagine her weighing the risks of the transport, the confusing messages from the government about whether anyone should travel, or even leave their house, of whether the handful of cases that had been officially reported in Tanzania were exaggerated hyperbole or grossly under-reported with those of your own mother, and getting on the bus. I would have done the same.

But I am getting ahead of the story, back in January when we were planning how to study earthquakes and floods, refugee camps and their communities and perhaps locusts, we had no possible imagination of the new crisis that would consume us. We held our workshops, discussed the academic literature, planned the plans, drafted the MOUs, enjoyed our barbecue and good conversations and parted ways. Since January in Dar es Salaam, our team’s intellectual energy has become professional, intellectual, political and highly personal about whether to hoard supplies or wear medical masks, how much hand washing with which kind of water could be enough, how would people help each other when the most helpful thing they were told to do was to stay apart?

My flight went from Dar es Salaam to Istanbul. When I arrived in the crowded airport, something felt a little different to me, but I couldn’t quite figure it out. As I neared the gate for my connecting flight to Venice, I noticed that about half of the passengers were wearing medical masks. Thinking about our Danish Corona-flag incident, I remembered to check my cultural bias as I noticed the masks around me. Many appeared Asian and I know it is good hygiene to wear masks when in crowded public places, so I thought it mostly a sign of politeness. Yet, many were also Italians, headed on the plane with me. Not checking my cultural bias so effectively when considering a culture that I now also claim as my own, I remember thinking, ‘hysterical, over-reacting Italians.’


About the author

Lisa Ann Richey is a Professor in the Department of Management, Society and Communication at the Copenhagen Business School.


More about coronavirus pandemic:

The Coronavirus Pandemic – and the Consequentiality of Metaphors

Sustainable Development, Interrupted?

The Political Economy of the Olympics – Misconceptions about Sustainability

Supply Chain Responsibilities in a Global Pandemic

A Green and Fair COVID-19 Recovery Plan


Photo by Matt Seymour on Unsplash

A Green and Fair COVID-19 Recovery Plan

By Stefano Ponte

This article is based on his previously written piece for the Centre for Business and Development Studies.

The COVID-19 crisis has made evident the limitations of existing thinking, preparedness and policy in relation not only to health pandemics but also to the sustainability challenges we face, locally and globally. Contemporary capitalism, with its hyper-individualistic culture and just-in-time – instead of just-in-case – approach to infrastructure and essential equipment, is not geared towards solving global problems that require coordination, cooperation and solidarity. As some activists, scholars and medical personnel have stated recently, ‘We don’t need heroes if we have preparation’.

Clear examples that have emerged with particular force in the past few months include the political inability to coordinate emergency responses within the EU and the US, cut-throat competition among countries seeking to procure essential medical gear, and the realization that we have been undermining the working conditions for ‘essential workers’ for decades. Therefore, an expansive economic stimulus to restart the economy during/post-covid-19 cannot be based on the first-line response of capitalism – restoring production and consumption back to ‘usual’.

This is the time to expand and rethink our socio-economic models to stimulate a more sustainable approach to consumption – not limited to consuming more sustainable goods and services (such as organic milk, ecotourism holiday or FSC certified timber), but also on consuming less.

We need to rethink the current organization of the global economy, reform the national economic and political institutions that govern it and devise new forms of governance and collective action within states and across borders. Contemporary hyper-capitalism, rather than humanity per se, is the root cause of the global sustainability crisis and the spread of pandemics – and thus should be the focus of action.

To achieve this, we need a different kind of ‘green entrepreneurial state’ that de-couples sustainability from growth, and that does not intervene to bail out carbon-intensive industries tout court. Oil markets have tanked in recent weeks, and $0 (or even negative) oil prices are devaluing oil industry assets dramatically. A green and just recovery in the oil industry transition means focusing on helping workers first and foremost, rather than executives or shareholders. This could entail partial nationalization of assets to essentially shut the oil industry down in the mid-term and open the way for further investment in renewables, which would otherwise be dampened by competition from cheap oil.

Second, what we need is more community involvement in the economy, changes in labour law to make unionization easier, tax reforms to make municipal and cooperative forms of organization more attractive, corporate regulation to facilitate employee ownership, and stimuli to expand the radical and democratic ecological experiments that are already in place – such as the shared living communities that have been active in Denmark since the 1970s.

Third, important insights for a recovery plan can be offered by the idea of ‘just sustainability’, which incorporates ‘the need to ensure a better quality of life for all, now and into the future, in a just and equitable manner, whilst living within the limits of supporting ecosystems’. Therefore, a path towards recovery during-and-post COVID-19 needs to address inequality – as it drives competitive consumption and leads to lower levels of trust in societies, making public action (including under a pandemic) more difficult. Excluding companies from recovery funds which have made use of tax avoidance tools is one of the necessary steps. But broader and collective actions to stamp out tax heavens are needed more than ever.


About the author

Stefano Ponte is Professor of International Political Economy at Copenhagen Business School and Director of the Centre for Business and Development Studies. His latest book Business, power and sustainability in a world of global value chains was published by Zed Books in 2019.


More about coronavirus pandemic:

The Coronavirus Pandemic – and the Consequentiality of Metaphors

Sustainable Development, Interrupted?

The Political Economy of the Olympics – Misconceptions about Sustainability

Supply Chain Responsibilities in a Global Pandemic


Photo by Edwin Hooper on Unsplash

The Coronavirus Pandemic – and the Consequentiality of Metaphors

By Dennis Schoeneborn

Language is a reef of dead metaphors (Guy Deutscher)

We are in the midst of an unfolding crisis that humanity is struggling to understand. To make sense of the unknown, humans tend to rely on metaphors, analogies, or other rhetorical figures. What do metaphors do? They allow for giving meaning to a (rather unknown) target domain by projecting and transferring insights from a (presumably better known) source domain.

For instance, in the public discourse about the current Coronavirus pandemic, the sensemaking process includes analogies within the same domain (e.g., Trump stating at the beginning of the pandemic: “It’s just like a regular flu”; Bolsonaro maintaining for a long time that it’s just a “little flu”) –  or metaphors that tap into the source domain of natural disasters (e.g., the “tsunami” metaphor used by various medical professionals) or of human warfare (e.g., Trump’s more recent framing of coronavirus to be an “invisible enemy”; Macron’s insistence that “we’re at war”).

World leaders, journalists, social media influencers, epidemiologists and other contributors to the public debate can be presumed to mobilize such metaphors not only to foster sensemaking but ultimately also to steer citizens’ behavior.

For all that we know, metaphors tend to “have profound influences on how we conceptualize and act with respect to important societal issues”.

(Thibodeau & Boroditsky, 2011, p. 1)

Accordingly, it is worthwhile studying how and to what extent the use of different metaphors can inspire, influence and “organize” individual and collective behavior.

As the work by Joep Cornelissen reminds us, the fruitfulness of a metaphor depends on (1) its aptness (i.e. whether a metaphor ‘fits’ and it’s meaningful) as well as (2) its heuristic value (i.e. the extent to which a metaphor offers new insights into an unfamiliar domain; see Cornelissen, 2004).

However, aptness and heuristic value tend to be in a trade-off relation: While close proximity between source and target domain can help strengthen the aptness of a metaphor, it tends to diminish the metaphor’s heuristic value, at the same time. The latter problem also occurs when the metaphorical connection between two domain becomes so well-established (e.g., the link between epidemics and warfare) that the metaphor loses its ability to lend new meaning to the target domain (i.e. a term’s metaphorical quality “dies” so-to-speak; e.g., the term World Wide Web, where hardly anybody today would think of spider webs). In contrast, metaphors can be kept vivid and alive via the power of dissimilarity: the greater the contextual distance between two domains, the better the chance of a metaphor to be insightful.

This may be one of the reasons why novel and unusual combinations of metaphors, such as Tomas Pueyo’s notion of “The Hammer and the Dance” (while being aptly chosen in that case, as well) may have better prospects to lend new meaning to the pandemic and thus inspire new and desirable modes of behavior.

Taken together, the current crisis situation is also a crisis of collective imagination and sensemaking. Hence, in these turbulent and worrisome times it is more important than ever that contributors to the public debate think twice before mobilizing metaphorical imaginations – and to consider not only their aptness, heuristic value, or “retweetability” but also their potential (and sometimes unintended) consequences for individual, collective, and organizational behavior. Ultimately, it is not only the “brute fact” (Searle) of the pandemic that can severely harm us – but also the meanings that are ascribed to it (e.g., via metaphors) and that can materialize in very concrete actions.

For instance, individuals and collectives are likely to act less careful if they believe the Coronavirus to be “just like a flu” – and more careful if they grasp the virus to have chameleon-like features that make it hard to detect (e.g. recent evidence that the virus can also surface in damages to the heart and brain).

To conclude, the current pandemic serves as painful evidence for the importance of theories that highlight the constitutive role of communication for phenomena of orga­nization and organizing. In other words, communication in forms of metaphors, narratives, or other rhetorical means, especially if voiced by opinion leaders, tends to be not just “cheap talk” but can be highly consequential (as also powerfully shown by recent studies on “Narrative Economics” by Nobel Prize winner Robert Shiller).


About the author

Dennis Schoeneborn is Professor of Organization, Communication, and CSR at Copenhagen Business School, and Visiting Professor of Organization Studies at Leuphana University of Lüneburg. He serves as head coordinator of the Standing Working Group “Organization as Communication” at the European Group of Organizational Studies (EGOS). He furthermore serves as Associate Editor of the journal Business and Society.


More about coronavirus pandemic:

Sustainable Development, Interrupted?

The Political Economy of the Olympics – Misconceptions about Sustainability

Supply Chain Responsibilities in a Global Pandemic


Illustration by Dan Page

Supply Chain Responsibilities in a Global Pandemic

By Jette Steen Knudsen, Erin Leitheiser, Shaidur Rahman & Jeremy Moon

What is the responsibility of Western retailers to the workers who make their garments as the coronavirus forces factories to shut down?

Shopping malls are closed, gatherings are banned, thousands of employees have been furloughed, and movement outside of one’s home is discouraged if not outright illegal.  This has meant bad news for apparel brands and retailers as nervous customers cease buying. In the U.S., for example, retail sales in March were down almost 9% compared to in February.  Those brands and retailers which have built their businesses on a fast fashion model – predicated on the continuous churn of high volumes of cheap clothes – face unprecedented challenges and questions about responsibilities in the face of the COVID-19 pandemic. 

Retailers have responded in different ways.  As they have had to shut down their stores many have stated that they will not pay rent. For example, German sportswear producer Adidas stated (March 26 200, Reuters) that

“Almost all over the world there is no normal business anymore. The shops are closed. Even a healthy company like Adidas cannot stand this for long”.

Adidas was one of a string of retailers in Germany that said they wouldn’t be paying their landlords while their stores are closed as part of efforts to stem the coronavirus spread. Adidas said it would need credit even after staff cut their working hours, executives waived part of their pay and the company stopped share buybacks. Adidas’ decision was met with an uproar in Germany eventually forcing the company to formally apologize and to report that it planned to suspend a planned 1 billion euro ($1.09 billion) share buyback in an effort conserve cash after closing its retail outlets in Europe and North America. Adidas also said it would pay rent.

In Denmark, Anders Holck Poulsen, the owner of the clothing company Bestseller and Denmark’s wealthiest man, also announced that the company would not pay rent for its stores. Bestseller (parent company for brands like Vera Moda, Jack & Jones, Pieces, and Name It, among others) later reversed the decision following a public outcry and the CEO went on national television to apologize. Bestseller subsequently laid off 750 employees and sought financial support from the government.  This decision was met sharp with sharp criticism because over the last five years Mr. Holck Poulsen has paid DKK 7.6 billion (more than $ 1 billion) in dividends to his private holding company Heartland.

Not all companies have responded this way. Patagonia, for example, has promised that all of its employees will continue to receive their regular pay during store closures.

However, with many large brands scaling back their social responsibility in the Western part of the world, what kind of responsibility can we reasonably expect from Western retailers in places such as Bangladesh?

Bangladesh is heavily dependent on apparel production. Apparel comprises more than 80% of the country’s total export revenue and the sector employs more than 4 million workers, most of them women.  However, in recent weeks many Western brands have cancelled their orders from Bangladesh, and it is estimated that more than 2 million workers have lost their jobs.  H&M is the largest buyer of garments from Bangladesh and has reluctantly agreed to take and pay for the shipments of goods already manufactured as well as those that are still being produced. Inditex, PVH and Marks and Spencer have also agreed to pay suppliers for orders that are already produced but not all companies have done so. Primark, for example, has cancelled orders, and virtually all buyers have pulled orders that have not yet gone into production.  At the end of March 2020 orders for more than $1,5 billion had been cancelled, and Bangladesh reported -19% year-on-year export volume for the month.

What is the responsibility of large brands like Bestseller or H&M for their supplier factories in Bangladesh? Western brands have a long tradition for stating their commitment to CSR in global supply chains, including elaborate Codes of Conduct for social and environmental performance in supplier factories. Bangladesh has staked its claim as the low-cost producer of garments, and its costs and production capacities cannot be easily matched elsewhere in the world. The model of fast fashion needs Bangladesh, and Bangladesh, in turn, needs fast fashion. 

Now that crisis reigns upon all of us in the form of a global health pandemic, it is the most vulnerable of workers who have been left in the lurch, be it the retails associates who stock shelves or the stitchers who sew together T-shirts.  As buyers cancel orders, few recognize the perilous position that these workers are left in. For those working on the factory floor in Bangladesh, more than 2 million have been furloughed, many without pay, despite a governmental scheme intended to address these issues.  The meagre wages of garment factory workers have not allowed for savings that could support them in such times, and the prospect of long-term closures – or at least, no orders to fill and therefore no paid work – means almost certain disaster for them and their families. 

Garment workers in Bangladesh have risen up in protest, stating that

“…we don’t have any choice.  We are starving.  If we stay at home, we may save ourselves from the virus.  But who will save us from starvation?”

(13 April 2020, The Guardian).

While some brands, like Primark, have set up charitable funding pools to help support workers, the money has yet to make it to their pockets, and the “charitable” framing of this funding on behalf of brands speaks volumes about what they see as their responsibilities.  Yet, when the crisis passes and shopping malls re-open, brands will again be reliant upon these workers to satisfy their demand for an endless supply of cheap garments. 

Given that cheap labor is a fundamental need for fast fashion companies to survive, shouldn’t brands likewise ensure the survival of those on which it depends? 


This is the first in a series of blogs which will further explore the responsibility of the Bangladesh government, factories, Western governments and civil society organizations for dealing with COVID-19 in places like Bangladesh.  


About the authors

Jette Steen Knudsen is Professor of Policy and International Business at the Fletcher School of Law and Diplomacy at Tufts University and holds the Shelby Collum Davis Chair in Sustainability.  She is also a Velux Fellow at Copenhagen Business School where she is part of the Regulation of International Supply Chains (RISC) project

Erin Leitheiser is an Assistant Professor at Copenhagen Business School and Project Manager of the Regulation of International Supply Chains (RISC) project

Shaidur Rahman is Professor of Sociology at BRAC University where he is part of the Regulation of International Supply Chains (RISC) project

Jeremy Moon is Professor of Sustainability Governance and Director of the Sustainability Centre at Copenhagen Business School.  He is the Project Coordinator of the Regulation of International Supply Chains (RISC) project.

Photo by ILO Asia-Pacific

Sustainable Development, Interrupted?

By Steen Vallentin

The coronavirus and responses to the pandemic are right now defining human existence inside and outside of organizations. All societal attention and communication are centred on the virus, its day-to-day consequences and possible future repercussions for the people, the economy – and the planet.

Indeed, we are living through a gargantuan social experiment, and these can turn out to be the defining weeks and months of the new decade. Social distancing. Lockdown of public institutions and private businesses. Closing of national borders. No travelling, no tourism. All live entertainment (sports, music, culture) suspended. Places for social gatherings (restaurants, cafés, bars) closed (except for takeaway). Until further notice. The mind boggles.   

The closing down of open societies is blocking the blood flow of large parts of the economy, spelling potential disaster for many businesses and cultural institutions – in spite of large relief packages. Meanwhile, waters are clearing and air pollution is going down due to the drop in industrial production. There is an ominous air about these climatic improvements, though. They seem more like a morbid dress rehearsal for life on earth after human civilization than a silver lining.

Is it the end of the world as we know it? Certainly, we can expect – at least in the privileged global north – that life will soon return to something much more normal than the current ‘show responsibility by staying as far away as you can from other people’. In Denmark, the gradual reopening of society is already underway.

However, the question remains whether we will look at each other and on human interaction (particularly in large social gatherings) in the same way as we did before. Will the awareness of ‘the others’ close to us as potential carriers of disease somehow stay with us.     

Certainly, the comparisons with war are fitting. Who would have thought that anything except a worldwide war could affect all people’s social lives and the workings of government and business so rapidly and profoundly?

The pandemic constitutes a crisis of public health and health systems of unforeseen magnitude. The noun ‘crisis’ derives etymologically from the Greek krinein (Latin: krisis), which means ‘turning point of a disease’. This point was made repeatedly in the wake of the financial crisis of 2008-9: a crisis constitutes a turning point and thus an opportunity for new things to happen, for things to be different and perhaps better than they were. As the saying goes: ‘never let a good crisis go to waste’.

After sickness, there is newfound health. A crisis is not supposed to persist. However, recent years have taught us new lessons. Crisis has to understood in the plural, as crises, there are many of them (climate crisis, refugee crisis, trust crisis etc.), they are systemic and interconnected and they do not seem to go away.

Thus, we live in an age of perpetual or recurrent crises. We can imagine another side to where we are now, a new and more social normal, but it is becoming more and more difficult to imagine a future without some profound element of crisis.

Speaking of the interconnectedness of crises, what impact will the pandemic have on sustainable development and the green agenda? Will the public health crisis, its resultant need for emergency relief and its immediate and longer-term negative impacts on the economy take the wind out of the sails of green transition for a while? Making us waste precious time.

Or will this crisis and the efforts needed to get the economic wheels turning again turn out to be the greatest of opportunities to invest in green infrastructure and the solutions needed to create a more sustainable future? At this time, it is anyone’s (more or less qualified) guess. Not least because the answer depends on actions not yet taken by government and business leaders. Both narratives are out there.

The pandemic obviously lends itself to many interpretations. Among them faith-based apocalyptic visions of the end of times. Others see potential in this for putting an end to capitalism, as we have known it. Certainly, market-based solutions are taking a backseat to government intervention in our current predicament. It appears that in times of profound crisis we have to rely on big government (federal, local) and political leadership to take care of the common good and sort things out.

Time will tell whether or how the pandemic and all that comes with it will change people’s view of the market economy and of the need for government intervention in the market economy – not to mention people’s proclivities to consume, travel, engage with (many) others in the experience economy etc.

The more moderate take is that we need a regulated market economy and that the current crisis shows the limitations of cost/benefit analysis and the neoliberal urge to subject all things to marketization and economization. In light of the human suffering and the deaths caused by the coronavirus and facing health systems and heroic health professionals in distress, the cost/benefit mindset has come up short. This calls for immediate action and full commitment – even if the odd economist may question the utility of such a course of action.

We should take this lesson with us into the broader realm of sustainable development. Market thinking will not suffice.


About the author

Steen Vallentin is Director of the CBS Sustainability Centre and Associate Professor in the Department of Management, Society and Communication at Copenhagen Business School. His research is centred on CSR (corporate social responsibility) and sustainable development in a broad sense.

Photo by Aron Visuals on Unsplash