COVID-19, Climate Change, and the Forces Shaping Our Future

Is the COVID-19 pandemic a singular, once-in-a-lifetime event, or part of a broader set of megatrends that are shaping the future of our planet and society? If you’ve been paying attention to Andrew Winston, you’re likely to answer “both.” Winston is author of The Big Pivot: Radically Practical Strategies for a Hotter, Scarcer, and More Open World and a regular contributor to MIT Sloan Management Review. And he says there are a handful of crises and trends that were already affecting us — and our environment — well before the new coronavirus started to spread. It’s essential that we understand the major forces shaping our world and how they interact.

If there are any positives coming out of the pandemic, among them is its power to serve as a wake-up call to help us focus on these forces while we still have time to stave off their most damaging effects. But for real progress, legacy solutions and ways of thinking will need to recede, allowing new forms of collaboration to take hold. We can learn from the crisis and use it to move forward. Winston explains how in this week’s episode of Three Big Points.

Subscribe to Three Big Points on Apple Podcasts, Spotify, or Google Podcasts via the Subscribe dropdown menu above.

Transcript

Andrew Winston: There is only so much planet. There’s only so much clean air. There’s only so much clean water. There’s only so much stable climate. We’re seeing tremendous change, and not in a good way. And this all connects also to the current situation.

Paul Michelman: I’m Paul Michelman, and this is MIT Sloan Management Review’s Three Big Points. Each episode, we take on one topic that leaders need to be on top of right now and leave you with three key takeaways for you and your organization.

Andrew Winston is author of The Big Pivot: Radically Practical Strategies for a Hotter, Scarcer, and More Open World and a regular contributor to MIT Sloan Management Review. And he says there are a handful of crises and trends that were impacting us and our environment well before COVID-19 started to spread.

Andrew Winston: All of these pressures have been building and building for years, and they’re really not going away and I think for the most part are strengthening. Because of these five or six kind of gigatrends, business was being forced to rethink everything already.

Paul Michelman: One of the effects that companies around the world have been feeling because of climate change is the pressure on resources.

Andrew Winston: We have almost 8 billion of us. They are generally getting less poor — which is one of the great successes of modern times — and using more stuff. Again, we don’t know what will happen over the coming months or years, but the long-term trend is getting less poor, using more materials, less-reliable sources of water in particular. And so we’re still going to need very different thinking about our economies and how we produce goods and services — how we build this circular economy where every material finds a use, [so] that we’re not drawing as much from mines and virgin materials, which are getting harder and more expensive to get to. So we’re going to need regenerative approaches, especially in agriculture — ways to produce things, ways to make our food — that actually make the world cleaner and lower carbon as we make them.

Paul Michelman: There’s also been an ongoing shift, Winston says, when it comes to people wanting or needing to adopt the use of more clean technology.

Andrew Winston: This revolution, the growth has been unbelievable. But I do believe the share of the economy, or the share of energy and transportation, will rise. Or, possibly, we’ll see progress move maybe differently in different categories. You know, if oil stays dirt cheap, we may see the pathway or the acceleration of electric vehicles slow. But there’s laws in place around the world increasingly moving us away from internal combustion engines over the next decade.

Paul Michelman: Younger generations are also becoming a stronger and stronger economic force, demanding things of the market and society that previous cohorts haven’t.

Andrew Winston: When I talk to companies or executives, this is the one they bring up the most, which is, you know, it’s been for years millennials, now it’s Gen Z — they clearly want meaning and values in their work, in their lives. Again, will this change right now? Will this be as important if we’re at 20% or 30% unemployment? I’m not sure. You know, maybe it will become more important as people think during this time about what really matters — what do we really care about? Maybe people will want work that really matters even more.

Paul Michelman: Another trend affecting business and society? Increasing calls for transparency.

Andrew Winston: The rise of AI, big data, blockchain. Increasingly, we want to know what’s in every product, want to know how it’s made. Who made it? Were they paid a living wage? What’s their treatment by the company? What’s the carbon footprint? What’s the water footprint? And now, if anything, we’re entering potentially a much more transparent world. One of the kind of clearest pathways out of the situation we’re in is increased testing and tracking — a level of tracking of all of us that we may not be comfortable with, but I’m not sure we have much choice in — where everybody would basically…. Through their phones, it would track where you’ve been, who you’ve been in touch with.

Paul Michelman: Now, in some ways, the COVID-19 pandemic might have slammed the breaks on some of these trends — at least temporarily.

Andrew Winston: There’s going to be tremendous tension on businesses, and obviously, there’s sectors that are just going to be trying to survive — you know, hospitality, tourism. It’s not just a downturn, like 15% loss of revenue in the last downturn, but 90% loss. These companies are just going to be trying to survive and probably aren’t going to focus on their carbon footprint for a while.

Paul Michelman: But some companies are also starting to change and adapt to the crisis and learning lessons that Winston believes they can take forward to battle the longer-term problems of the environment.

Andrew Winston: This is one of my kind of favorite little stories right now. A company called Fanatics that makes baseball uniforms, and there’s no baseball right now, they are making gowns and masks. LVMH, P&G, and Anheuser-Busch, among others, are making hand sanitizer in their factories. Crocs is donating shoes to health care workers. And so companies are, I think a lot of them, doing the right thing. And people will remember the companies that did the right thing and tried to serve their community.

Paul Michelman: Winston argues that there are a number of close parallels between the current situation and the environmental crisis, starting with the idea of exponential growth.

Andrew Winston: We have to get ready increasingly for things that move very, very quickly. It’s shocking. Exponential change is shocking and really not intuitive. It isn’t the way our brains work. Things happen seemingly slowly and then all at once. And I think it partly explains why we can be so slow to act on things like COVID in the short run and definitely climate in the long run. And, of course, there’s this parallel to climate and to sustainability issues. Carbon emissions have been rising at an exponential level since the Industrial Revolution. And the fact that it’s not linear, that 2 degrees is not, you know, one-third worse than 1.5, and 3 degrees is not 50% worse than 2 degrees. It’s not linear. It gets worse much, much quicker. The amount of carbon dioxide in the atmosphere goes up exponentially. And then the impacts — the extreme weather, the effects on the planet, fairly exponential losses of species, the rise of ocean plastics. And then, some choices — you know, how are we going to handle [it] going forward? If we keep going the way we’re going, we’re going to go up exponentially.

Paul Michelman: Because of the exponential nature of the problems we face globally, we need governments and coalitions working together to try to combat these issues.

Andrew Winston: We’re still going to be trying to provide a quality of life for, you know, 8 billion people, going to 9 or 10 [billion]. And time is still very, very short. We have a tremendous sense of urgency here. And there are very clear parallels with the COVID situation, in my mind. Just consider that right now there’s organizations in the U.S. of Western states and New England states that are coming together to try to manage COVID issues together. And it’s very similar to the groups — and it’s almost the exact same states — that have developed their own greenhouse gas trading schemes or other regional efforts on climate. It’s basically filling the gap that the federal government has left.

Paul Michelman: And the risks are also eerily similar between these two crises.

Andrew Winston: There’s, unfortunately, a clear parallel in the denialist community. They’re using really the same playbook, and it’s a lot of the same players. They have been saying for weeks and weeks, “Well, this is overblown; maybe this is exaggerated” — the same things they’ve been saying about climate change for a long time.

Paul Michelman: Both COVID and climate change are having a major impact on communities, causing loss and destruction. One is in our face right now, the other is at our door.

Andrew Winston: To be blunt, the world is heading towards, I think, 1.5 degrees at the very least — 2 degrees is almost locked in, frankly — and at that level, over the next generation, 30, 40 years, we’re going to see some cities become uninhabitable. So there’s a another sad parallel between, I think, COVID and climate, which is grief and loss. We’re going to lose places that we’ve enjoyed living. We’re going to lose tons of species, some ways of life, and there’s grief in all of this.

Paul Michelman: One thing the current crisis should remind us is that humanity is, in many respects, one connected system.

Andrew Winston: Right now, we are relying on the people working in checkout roles in supermarkets, the drivers, the truck drivers, the people keeping our water systems and power going, the garbage collectors. Our very lives depend on them right now. And I hope we will get this and get that we are fundamentally one immune system. We’re only as strong as our weakest immune system. And it really is all connected. Our environment provides the pillars of our society, and the people are the other pillar. So we’re connected deeply, and in a tactical kind of business sense, I think this means we have to rethink, in particular, supply chains — there’s a lot of discussion about this right now — and rethink what it means to be resilient as a people and as a business. It turns out, for example, that one of the biggest manufacturers of masks is in the Wuhan area of China. And one of the big manufacturers of swabs that we’re out of — and it’s one of the reasons we can’t test enough in this country — is in the Lombardy region of Italy, one of the hardest-hit regions. It’s directly impacting the supplies we need for this challenge.

Paul Michelman: And there’s another point worth noting: There’s a direct connection between the spread of COVID-19 and the degradation of our planet in recent decades.

Andrew Winston: There is only so much planet, there’s only so much clean air. There’s only so much clean water. There’s only so much stable climate. And this is part of what we have to understand. Arctic ice declining exponentially, insects, bees, frogs — we’re seeing tremendous change, and not in a good way. And this all connects also to the current situation. We are bumping up against planetary boundaries. As we cut down forest, this is how you get to these wet markets with bats and pangolins. And there’s a connection between 8 billion people not having enough to live on and people eating what they can, and it leading to these diseases.

Paul Michelman: Now, we’re far from out of the woods of the pandemic, and there are many challenges to tackle in the near term. But Winston reminds us that markets can learn from this experience and make real changes, and companies cannot be afraid.

Andrew Winston: I think we have some very big choices to make. This great pause that we’re in — trillions are being thrown at the economy. We’re going to invest and build for the future. Are we going to choose the cleaner, more resilient economy? And something more resilient for human health? Like, cleaner air leads to fewer respiratory problems; less pollution is better for us. The clean economy is the answer to so many of our biggest problems. And this means, fundamentally, companies need to get off the sidelines on policy to help think big. This is, I think, one of the biggest failings in companies.… Stop being afraid of, I don’t know, getting a bad tweet about your company — and get out there and push for pro-climate policies. We needed that in the last couple of months. Where were companies pushing for a real, much quicker shutdown that would have led to probably less economic damage? And so are we going to choose the cleaner path, the more substantial structured path, to tackle this problem? And are we going to choose a path that deals with inequality and really asks why have some populations died at higher rates? Why are some populations always hardest hit by climate also? Why are there gaps in health coverage in the U.S.? And how can we not right now have a deeper conversation about a much better safety net and insurance for all? So finally, when in doubt, I think we should be focusing on people. It’s the only answer I can think of to this situation, to start from people, not from market numbers or the GDP, but impacts on real people.

Paul Michelman: That’s Andrew Winston, author of The Big Pivot: Radically Practical Strategies for a Hotter, Scarcer, and More Open World. And now, let’s wrap up with three big points.

Number one: The world has already been changing because of a handful of megatrends that are only increasing due to COVID-19.

Andrew Winston: And so we were in this kind of grand recalibration of the role of business in society already.

Paul Michelman: Number two: There are all kinds of parallels between the COVID and climate crises.

Andrew Winston: Please listen to experts. They know stuff. They’ve studied this. Epidemiologists have gotten themselves steeped in exponential curves. And climate scientists have been worrying and warning for 40-plus years. They’ve been saying it’s coming; the effects are going to build quickly.

Paul Michelman: And number three: Solving both of these massive challenges will require a new way of doing business and much, much more collaboration.

Andrew Winston: There’s a new kind of multistakeholder model of business that is arguably the only path forward. In the larger context, we’re still rethinking what it means to be a business. And arguably, everything happening now is pushing companies more towards that.

Paul Michelman: That’s all for this week’s Three Big Points. Remember, you can find us on Spotify, Apple Podcasts, Google Podcasts, Stitcher, TuneIn, and wherever fine podcasts are streamed. If you’d like to support our show, please post a rating or a review on whatever podcast platform you prefer.

Three Big Points is produced by Mary Dooe. Music by Matt Reed. Marketing and audience development by Desiree Barry. Our coordinating producers are Michele DeFilippo and Mackenzie Wise.