The financial repercussions of Covid-19 are immense, and the recovery strategies for businesses and non-government organisations will shape the economy of the future. Whilst we have observed surprising environmental benefits from the global lockdown, including a predicted 25% drop in Chinese greenhouse gas emissions this year, it is likely that most countries will continue with “business as usual” after this crisis. In some cases, production, trade and travel may even be stimulated to counteract economic losses during this period, resulting in a potential spike in pollution levels and CO2 emissions.
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The Green Deal prior to COVID-19
The EU first presented the European Green Deal in late 2019, and progress has been made to develop industrial plans, economic action and climate law. Covid-19 could have stopped these negotiations in their tracks, however, 17 of the 27-nation EU have joined the call to position the European Green Deal at the heart of a post-coronavirus recovery. This plan involves rebuilding the economy sustainably and making progress toward carbon neutrality by 2050. This alliance also brings together CEO’s of large companies such as H&M and Unilever, as well as a number of NGO’s.
The Green Recovery and SMEs
What seems to be sorely missing from these strategic discussions, is the consideration of small and medium-sized enterprises (SMEs) and the major role that they play within the global economy. In the UK, SMEs account for three-fifths of employment and around half of turnover in the UK private sector, with small businesses alone comprising 99.3% of the total UK business population at the start of 2019. By overlooking SMEs that tend to lack the support and investment that larger corporations have, a vital opportunity in transitioning towards a green economy could be lost.
The Green Recovery and the Third Sector
Another seriously hit sector is non-profit organisations and charities, many of which have lost a significant proportion of the funding that they would ordinarily receive. Organisations less immediately related to Covid-19 emergency responses including ecological and some social welfare charities have been most vulnerable. In the UK a £750m package has been pledged to keep struggling charities afloat but this does not fully cover necessary funding, particularly for organisations currently deemed less relevant and thus receiving fewer donations.
Globally, the financial spotlight has been placed primarily on large corporations that require huge bailouts. In the UK, for instance, large businesses can now receive short-term IOU’s of up to £300m.
A much more inclusive view of post-Covid development is needed, including consideration of how SMEs can be supported for the vital economic role that they play.
In particular, facilitating robust transitions towards a more sustainable base. A committed shift towards more inclusive business models is thus necessary, simultaneously assisting in “future-proofing” businesses to allow for more sustainable growth.
This pandemic has resulted in universal uncertainty, but the one key anchoring point is that a green recovery is the only avenue for tackling the potentially more traumatic climate crisis that awaits us.
Rhiannon is a final year Biology student at the University of Oxford. She is passionate about sustainability and strives to work in the intersection between conservation and social responsibility. Working as a Sustainable partnerships intern at Impacto international has allowed her to develop further interest in the world of sustainable business.