Health and Healthcare Systems

An enlightened response to COVID-19 can avert the climate emergency

Are we heading for Groundhog Day - or a new dawn? Image: Joshua Earle on

David Craig
Co-Chair, TNFD
Our Impact
What's the World Economic Forum doing to accelerate action on Health and Healthcare Systems?
The Big Picture
Explore and monitor how The Great Reset is affecting economies, industries and global issues
A hand holding a looking glass by a lake
Crowdsource Innovation
Get involved with our crowdsourced digital platform to deliver impact at scale
Stay up to date:

The Great Reset

  • If we get our policy responses to COVID-19 wrong, we risk exacerbating the climate crisis.
  • But it also provides us with a massive opportunity to build back better.
  • Here's how policy-makers and business leaders can set the right example for others to follow.

Coronavirus is a catastrophic health emergency that has sparked the worst economic crisis in a century. My fear now is that if we try to beat this pandemic with the wrong policy responses, we will deepen the climate emergency, too.

While everyone welcomes clearer skies and a sizeable fall in CO2 emissions during the pandemic, these benefits are transitory, insufficient in scale and impose too high a price in terms of lives, jobs and economic growth.

Putting ourselves on a truly sustainable path will require levels of ambition, coordination and a mobilisation of finance (public and private) that dwarfs anything we have done before. We will succeed only by growing ourselves out of trouble – not with a thankless choice between sustaining livelihoods or sustaining the planet.

Have you read?

Five months ago, it felt like we were finding the answers. Davos was buzzing with a real energy and conviction that we could turn the climate change tanker around. Although sustainable finance is proving remarkably resilient to the economic crisis, it is also the case that governments across the world are backsliding on their environmental, social and governance (ESG) commitments, or putting them on the back burner. The number of countries that re-affirm their goals towards the Paris climate agreement later this year will be a serious litmus test of commitment.

A reset moment for humanity

Undoubtedly, we are at a point of real danger. And yet … we are also at a moment of incredible opportunity.

The pandemic is providing humanity with a reset moment. Many of us are rediscovering our connection to the natural world and realising we don’t want to go back to the old status quo. Economically, we are living through a unique moment in which governments are rewriting the textbooks on politics and the economy with a level of state intervention not seen in decades.

We may well never see such a confluence of factors again - where governments are set to deliver loans, guarantees and income support collectively worth more than $8 trillion at the same time as humanity needs to spend up to $7 trillion a year on renewable investments. The way we rescue our economies today will determine our success or failure in averting a climate catastrophe in a decade’s time.

Powers of persuasion

Given our fractured global order, consensus won’t be easy. The hope must be that, as enlightened nations make a stand, others are cajoled into action. For example:

1. Central banks could prioritise the purchase of bonds issued by green-tech, renewable energy companies and energy companies with transitional plans.

2. State support should prioritise sustainability-focused, or high-ESG-scoring companies and sectors – whether via tax breaks, credits or guarantees. The European Commission’s €750 billion ($849 billion) recovery plan is a model for others in putting climate action at its core.

3. Financial assistance for companies should be conditional on hitting future ESG targets. For example, France has made money for Air France subject to the airline halving emissions per passenger by 2030 and in removing many domestic flight routes that can be served by train.

4. Governments could commit, or further commit, to emission trading systems – China is creating a system that will dwarf Europe’s.

5. Employers and governments should encourage and incentivise more environmentally friendly work models. Remote working is here to stay, and that is already reducing emissions from transport. But when travel is necessary, we need simple green alternatives to the car and plane.

6. Regulators and industry groups could encourage or mandate greater disclosure of ESG data so markets have the transparency they need to efficiently channel capital towards sustainable investments. Of the 7,300 listed firms in Refinitiv’s ESG database, 57% still don’t disclose their direct and indirect CO2 emissions.

7. Lockdown-related shortages are prompting companies to reassess the sustainability of supply chains. Shorter and simpler supply lines not only reduce operational risk but also emissions.

Not just a ‘nice to have’

Corporate leaders see which way the wind is blowing. Climate-related impacts to their cost base, disruption to their markets and the growing regulatory costs in the form of higher carbon pricing are showing that sustainable investing is not an altruistic act, but one of enlightened self-interest.

Even if governments and companies do ease back from green commitments, investors and financial institutions won’t. Banks are already factoring higher carbon prices into M&A valuations and lending decisions, while investors are using ESG scores to determine where they do and don’t direct trillions of dollars.

This crisis is proving that investing in ESG makes financial sense. Our data shows that US-listed companies with an ESG score above 80 (out of 100) outperformed the S&P500 by an average 6.5 percentage points in the year to date. It’s a similar story for funds where data up to April shows most conventional funds underperformed their respective technical indicators, while the majority of ESG funds outperformed theirs.

US firms in the top ESG quintile have outperformed the benchmark since the start of 2020
US firms in the top ESG quintile have outperformed the benchmark since the start of 2020 Image: Refinitiv

Driven by this resilience and the demand for sustainability-linked coronavirus bonds, we have seen a significant increase in the number of our customers accessing ESG data since the start of this crisis. That has increased markedly in the last couple of weeks – a welcome outcome from the crisis.

Reasons to hope

With policy-makers deciding now to what extent they should ‘green’ economic recovery plans, we are at a critical juncture, and yet I am hopeful. The level of collective action and our willingness to change old habits has been inspiring. The groundswell for lasting change is building and I suspect global leaders, both in business and politics, sense this too.

Humanity has shown once that it can act in a rational, self-interested manner when faced with a crisis. It will need to do so again, very soon.

Don't miss any update on this topic

Create a free account and access your personalized content collection with our latest publications and analyses.

Sign up for free

License and Republishing

World Economic Forum articles may be republished in accordance with the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International Public License, and in accordance with our Terms of Use.

The views expressed in this article are those of the author alone and not the World Economic Forum.

Related topics:
Health and Healthcare SystemsClimate Action
World Economic Forum logo
Global Agenda

The Agenda Weekly

A weekly update of the most important issues driving the global agenda

Subscribe today

You can unsubscribe at any time using the link in our emails. For more details, review our privacy policy.

This Earth Day we consider the impact of climate change on human health

Shyam Bishen and Annika Green

April 22, 2024


About Us



Partners & Members

  • Join Us

Language Editions

Privacy Policy & Terms of Service

© 2024 World Economic Forum