The Covid-19 pandemic could shape the environmental, social, and governance landscape for years to come, and in a number of ways, according to research by Frankfurt-based DWS.
These changes vary from “rigorous” integration of social issues into the investment process to the strategic case for sustainable investments.
The study highlighted that there are significant risks to clean tech investments and broader climate action as a result of the novel coronavirus and the recent oil price collapse prior to the Opec deal to cut production.
Wind and solar projects, the development of biofuels, and sales of electric vehicles are among the certain industries that will come into particular focus, according to Michael Lewis, DWS‘ head of ESG thematic research.
He said: “The coronavirus pandemic has hit the world economy at a critical time from an ESG perspective.”
According to the report, there will be a greater focus on social issues in ESG integration due to the pandemic, as well as an increase the research behind the links between climate change and biodiversity loss.
“We should also not forget that this crisis has its origins in biodiversity loss, rapid urbanisation, rising population levels and as humans come into closer contact with animals through deforestation and bushmeat markets,” Lewis said.
Covid-19 also strengthens the strategic importance of sustainable and impact investments in emerging markets due to the challenges faced by these countries when it comes to self-isolating, sanitation, and working from home, making it a struggle to tackle the crisis effectively, the study claims.
The report also calls on governments and investors to be mindful of sectors seeking bailout provisions. “Taxpayers cannot afford to foot the bill for covid-19 as they did after the global financial crisis,” Lewis added.
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