Although pandemic risk was identified by many companies as a low-likelihood, high-impact event, Covid-19 demonstrated that businesses were not prepared for the scale of government interventions, including national lockdowns that devastated economies.
EOS’s 2020 Annual Review of its engagement activities and voting recommendations identifies some of the key lessons that companies must learn from the pandemic, and ways to improve sustainability-focused risk management over the longer term.
For example, the pandemic has demonstrated the importance to companies of strong health and safety practices and provisions - such as sick pay and mental health support - to ensure business continuity. It has also shown why all businesses need to maintain a social licence to operate, underpinned by a corporate purpose. Companies that laid off workers after receiving government support were closely scrutinised by investors and the public. We take a look at this changing landscape.
Although Covid-19 captured the headlines in 2020, the long-term issues posed by the climate crisis have not gone away. The rapidity with which some governments moved to contain the pandemic - with a significant impact on business operating models and daily life - offered companies and society a window through which to view possible responses to the looming climate crisis.
The EOS 2020 Annual Review includes a progress report on our participation in the collaborative initiative Climate Action 100+, where we lead or co-lead engagement with over 30 companies. We assess the net-zero commitments made by oil and gas companies as well as the decarbonisation challenges for energy demand-side participants, as policy grinds ever tighter. In the run up to COP26, to be held in the UK in November 2021, we can expect to see further shifts as the pressure builds to bring national policies into line with Paris Agreement pledges.
To find out more, read the EOS 2020 Annual Review.