What can we learn from coronavirus (COVID-19) when it comes to tackling Climate Change?
The world is at a standstill. What began in Wuhan, China, has now affected all corners of the world taking over 10,000 lives and infecting around 250,000 people (at the time of publishing). The spread of COVID-19 has halted the world economy. For fear of spreading the contagion even further, world governments have introduced extreme but necessary measures such as self-isolation and social containment, cancelling flights, closing borders and encouraging remote working. Global markets plunged to levels not seen since the 2008 financial crisis. The unexpected beneficiary of this international crisis has been the environment and new measures to combat the pandemic have unintentionally highlighted our influence on the planet.
Getting to grips with COVID-19 is of utmost importance and should be the focus of all efforts worldwide due to its immediacy but it is difficult not to acknowledge the changes in CO2 emissions over the past few months. Using China as an example, where the most striking changes can be observed, the drastic drop in pollution can be attributed directly to the virus. Restricting flights has reduced the negative environmental impact of the industry, which is typically responsible for 2% of global emissions. From January 23rd to February 13th, the number of daily departures and arrivals fell from 15,072 to just 2,004. In other industries, the numbers keep falling: Coal consumption at power plants is down 36%; Utilisation of oil refining capacity was lowered by 34%; Operating rates for main steel products were down by more than 15%. Altogether, there are reductions of 15% to 40% in output across key industrial sectors. Over a period of four weeks this could amount to 200Mt CO2.
The virus has hit closer to home, affecting the roadshow industry and investor relations activities. Roadshows depend on flights and close personal communication, both of which risk spreading the virus. The change in circumstance has made us reflect on our carbon footprint and what this has meant for carbon emissions produced during a financial roadshow.
Flights usually account for more than 50% of a roadshow’s emissions, therefore if flights are restricted, there could be significant reductions in emissions. A one-way business class flight from London Heathrow to New York JFK generates 2,410 kgCO2e, hence a cancelled trip for a team of two to the USA could save around 4820 kgCO2e. Event emissions are the second most intensive activity of a roadshow and includes catering and meeting space emissions. For a typical Roadshow this would be around 30,000 kgCO2e, i.e the equivalent of driving around the earth 4.5 times in a diesel car! These figures allow us to localise the global issue and put it in terms which have greater relevance to the industry. It is not an argument for shutting down business but shows us the environmental impact a roadshow has and perhaps demonstrates why sustainable business is so important.
When the dust settles, the long-term environmental benefits will remain to be seen. Similar reductions due to economic slowdown have occurred in the past, notable drops include WW2, the Great Depression, the 1970s oil shock and the 2008 financial crisis. All momentary blips where emissions rose almost immediately after the global economy stabilized. Although the current timeframe on this is unclear, humanity will overcome the virus and return to business-as-usual but what remains could teach us key lessons in how to deal with existential, longer term threats, namely the one that has been lurking over the horizon and is now starting to come into view: Climate Change.
The parallels between Coronavirus and Climate Change are striking: a life-threatening crisis that affects the entire world; continuous falls in the global economy; higher risks for the poor and vulnerable. So why is the world so much more afraid of the Coronavirus than Climate Change? The speed at which efforts globally have been put in place proves that humanity has the capability to combat catastrophe of this magnitude. One can only hope that this experience will galvanise us for the fight against Climate Change before it is too late.