The next 10 years: the impact of coronavirus on ESG

Caroline Haas from NatWest Markets shares her thoughts on what might lie ahead.

Last updated: 05 Aug 2020 2 min read

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In a recent article, Caroline Haas, managing director and head of sustainable finance, financial institutions and SSAs (sovereign, supranational and agency) at NatWest Markets, discussed the far-reaching effects of the coronavirus crisis. Focusing on environmental, social and governance (ESG) issues, she looked at everything from the immediate reaction of the industry, to the likely impact on younger generations in the future.

Questions explored in the article include:  

  • How has the coronavirus crisis changed the ESG agenda? The effects of the crisis on the environment and society have been impossible to ignore, and Haas calls for greater recognition of the importance of social bonds alongside green bonds.   
  • Has the coronavirus crisis been the final push the world needed to recognise and appreciate the importance of ESG? ESG assets have held their own, with long-term projects core to that strong performance. Haas foresees a possible shift from away from shorter-term reporting to reflect this.
  • What development will the next decade bring in ESG awareness and responsible investing? Haas predicts ESG evaluations will become embedded to the point of measuring a company’s impact, which will incentivise businesses to include impact in their risk-return analysis. Companies that protected employees during the crisis while keeping operations open will be rewarded by investors. 
  • What other global event of this magnitude – or bigger – might strike? Serious social unrest presents the greatest risk for Haas, who hopes for lasting changes to the social and economic balance in some countries, especially the US. She also explores the idea of two-speed governments, whereby two sets of elected officials run a country for five or 10 years, allowing time for the longer-term projects required by sustainable futures to be embedded. 
  • Will the crisis trigger a new industrial revolution? Haas hopes to see acceleration for new technologies and patents that were struggling to find backers now that the balance between the social matrix and the climate crisis are better appreciated. She also considers how working from home will impact housing, municipal green space, and travel. 
  • How will all this affect our younger generations? A greater focus on equality could increase access to education, with online learning offering the scope for the university delivery model to radically change, even offering the potential for future students to pick their own modules from multiple universities. 

To read this article in full and for more coronavirus insights, visit NatWest Markets .

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