How Coronavirus Could Have a Lasting Effect on Carbon Reduction

Increased telework may have positive impacts on an organization’s sustainability goals.

The global response to the coronavirus pandemic has led to significant and sudden drops in carbon emissions. These reductions are due to massive changes in human behavior in response to a crisis like we have never seen before. In China, the world’s largest carbon emitter, experts estimate that emissions over the past month have been about 25 percent lower than normal (Scientific American 2020).

Yet questions abound about whether any of these carbon reductions can or will be made permanent. To a large extent, this depends on whether we revert to our prior behaviors or choose to make some lasting changes. This circumstance presents chief sustainability officers with unique challenges and opportunities for reducing their organization’s footprint. The good news is that organizations have time to work through this process strategically. Maintaining the health and safety of the workforce requires that the transition to a ‘new normal’ be gradual, over the coming months and years.

Any examination of how to improve sustainability outcomes must start with data to understand the biggest areas of opportunity, and in the case of coronavirus, what might be able to be re-thought and locked in permanently from the experience.

For ENGIE Impact, our 2019 carbon emissions reporting demonstrates that our biggest contributors are business travel (mostly international), commuting, buildings and digital. Like businesses around the world, we have had no business travel for over a month, and it could be several more months before we are able to resume. Forty of our approximately 2,000 employees, or about 2 percent of our workforce, provide essential services that must be performed in an office. The remaining 1,960 are successfully working from home. Although we don’t have measurements yet, it is easy to see that our use of digital tools has skyrocketed since transitioning the bulk of our workforce to work from home.

With this in mind, I put the following set of questions to Emma Stewart, Ph.D., Head of Campus & Community Sustainability Solutions for ENGIE Impact. Here is a transcript of our conversation:

Christine: Coronavirus is having a profound effect on every aspect of life and business. How are businesses organizing the response?

Emma: Indeed, this is an era when superlatives are in order, and at times, don’t even do justice to the disruption. In mid-March, the Dow Jones Industrial Average, a measure of 30 of the most prominent publicly-traded stocks in the United States, registered its second-worst day of trading in its 124-year history (World Economic Forum COVID Strategic Intelligence 2020). The International Monetary Fund projected the global economy will contract by 3 percent in 2020, far worse than the 2008 financial crisis (IMF World Economic Outlook April 2020). This aligns with depression-era level downturns. Still, the IMF reassures us that economic activity can normalize in 2021 with sufficient fiscal and public policy support.

Businesses need to respond in three phases:

1. Crisis management: Businesses initially (and rightly) responded to coronavirus through the crisis management lens – radically reorganizing their operations to protect the workforce and do their part to contain the pandemic. As governments cushion the economic impact using fiscal stimulus packages, tax relief and liquidity, many businesses are also stepping up to cushion the impacts on their external stakeholders, from donating scarce personal protective equipment and financial resources, to repurposing production lines to produce ventilators to donate, to innovating new solutions. It is notable that many of the companies that led the pack in this first phase are also sustainability leaders (e.g. Microsoft, IKEA, Nestle), reinforcing the research that shows progress on sustainability to be a good proxy for management quality.
   
2. Business continuity: While responding to the crisis, businesses are also required to ensure a continuity of services to clients. This necessitates a stream of constant communications so that the business can understand and adjust to how the needs of their clients are evolving in response to the crisis. In many cases, business need to shift their service models to meet new needs and innovate around supply chain challenges. Throughout this, businesses must continue maintaining core operations, particularly those needed to support essential workers and enable the vast move to work from home that is necessary for social distancing.
   
3. Rebound: The public sector should catalyze economic recovery and rebound by investing in sectors that disproportionately generate jobs, like the clean energy sector (NRDC Annual Energy Report 2019). Businesses need to engage in proactive strategy development to define what their ’new normal’ will be in the medium to long term. This strategic development work must touch all aspects of the business, assessing what has been learned, which sectors are likely to contract, and which could grow if nurtured, and how this experience will redefine work as we know it. The new normal will need to meet the needs of both public health and environmental sustainability for customers and employees. Chief sustainability officers must take a leading role in this rebound to ensure all that has been learned is funneled into making businesses more sustainable over the long term.
   

Christine: How should corporate sustainability leaders think about strategy development towards a ‘new normal’ of carbon reduction?

Emma: In looking at the Rebound with respect to ways of working, it’s helpful to divide that new normal into pre-vaccine and post-vaccine timeframes:

• Pre-vaccine (roughly 2020-2021): A return to the office requires certain criteria be met in public health, epidemiology, and healthcare capacity in order to protect one’s employees and customers (Former Center for Disease Control Director Tom Frieden’s criteria show just how demanding these criteria will be). Workplaces may well want to (or be mandated to) apply a 6-foot physical distancing rule until a treatment or vaccine is proven and widely available. If so, this will require employers to reduce the number of employees in offices at any one time – suggesting a potential continuation of at least partial work from home. We can anticipate major workspace reconfiguration to enable distancing and potential shrinkage of square footage for businesses that decide to make work from home permanent. There will also be increased procurement of easy-to-disinfect surfaces, touchless devices (e.g. doors), and possibly temperature scanners at key entry points. Employees and students who have been catapulted into telework and online learning may well become fond of its efficiencies and benefits, prompting employers and educators to offer remote offerings or lose their competitive edge. This could well become permanent depending upon how long society must “dance” with the coronavirus (see Coronavirus: The Hammer and the Dance on Medium, 2020).
• Post-vaccine (roughly 2021-2022 onwards): Once wide deployment of vaccines (or herd immunity, whichever comes first) takes place, employers can begin to make more permanent adaptations to their real estate footprints, shedding facilities where employees or students have shifted to remote locations, or permanent adaptations to their business travel policies and culture.

By proactively engaging in strategy development now, chief sustainability officers can help businesses take advantage of an immense opportunity to cut costs and carbon emissions while maintaining or growing business productivity in the post-vaccine world. It starts with looking at the sustainability data from pre-coronavirus ways of working. Here are the key questions to ask:

• What were the main drivers of greenhouse gas emissions from ways of working pre-coronavirus?
• How have those behaviors changed in response to the crisis?
• How have the changes impacted carbon reduction?
• What changes can be locked in to support the long-term sustainability of the business while maintaining organizational culture and growth?
• What is the ROI of these changes?

Christine: How can a corporate sustainability program encourage making some of the reductions in commuting permanent?

Emma: Due largely to shelter-in-place mandates, weekday personal travel fell by a jaw-dropping 40 percent in the United States the week of March 20-27 (INRIX U.S. National Traffic Volume Synopsis March 27, 2020). The decrease in vehicle miles traveled was particularly acute in passenger travel, the category covering employee commuting.

The first coronavirus hotspot in the U.S., Seattle, happens to also be a technology hub, so these companies were more comfortable than most asking their employees to work remotely – often using their own software products to do so – well before government guidance kicked in. But employers well beyond the tech sector can see this disruption as an opportunity to permanently shift their employee culture to one that embraces the many benefits of telework, from greater productivity, to avoided wear-and-tear, to cost-savings.

I worked at Autodesk during the 2008 financial crisis, and we made a concerted effort to invest into the downtown in high-end teleconferencing systems, which post-recession allowed us to dramatically curtail business travel, especially for internal meetings, and to set an ambitious Science-Based Target that included even our Scope 3 emissions.

There are countless ways to encourage this shift, and one must choose those that align with your organization’s culture in order to ensure adoption. A couple of ideas:

• Provide employees with training and tips for working remotely, from pro training for video conferencing, to online etiquette, to ergonomic recommendations. We at ENGIE Impact have created a “virtual watercooler” where employees can gather informally to get to know one another and have chance encounters that may spur useful collaborations.
• Offer a portion of the corporate budget saved on travel cancellations during the pandemic period to help employees set up low-carbon home offices.

Christine: Would increasing our organization’s work from home have a net positive impact on carbon emissions over the long term?

Emma: At first glance, increased work from home would seem to reduce a business’s carbon emission by reducing commuting and the need for real estate. Indeed, The Carbon Trust, one of the most respected voices worldwide on carbon accounting, produced a report back in 2014 concluding that a shift to homeworking (or telework as it is known outside the UK) would result in significant cost and carbon savings for the business sector, specifically net £3 million and 3 million tons of carbon savings per year in the UK alone. It noted that homeworking saw upticks in the 1950s as telephones were introduced into the home, in the 1970s as the oil crisis made energy and commuting more expensive, in the 1980s with the advent of the personal computer, and in the 2000s as employers became more focused on outcomes in lieu of process. But none of these saw the sudden surge in telework that leading economies were forced to embrace this spring when the global pandemic hit.

However, telework has always been a tricky area to GHG accounting. One reason is that location matters. For employers like ENGIE Impact that try to locate our facilities in dense urban cores close to public transit, the commuter footprint for many commuters may be low to begin with. Meanwhile, telework is susceptible to a phenomenon called “rebound effect,” where GHGs increase from heavier reliance on other forms of energy load, such a data centers (the energy intensity of the ICT sector is increasing), or due to knock-on effects (such as employees heating/cooling/lighting home offices less efficiently than those managed by professionals, or employees driving to do errands they would have done while commuting by transit).

To counter these rebound effects, employers should begin to think about workers that shift to permanent telework as extensions of their own facilities. Consumer-friendly tools like Pawprint Eco (UK) or Cool Climate Network (U.S.), which use behavioral science to help individual households reduce their footprints, can then offer further insights, motivation, and “stickiness."

In conclusion, those business leaders that lean into this public health crisis can reap permanent and positive rewards for their employees and customers while accelerating progress to their sustainability targets.

There will be many more questions as organizations look for opportunities to leverage the learnings and behavioral changes we are experiencing to leapfrog their sustainability targets. ENGIE Impact will continue exploring how different ways of working can catalyze corporate action, including ways to lock in reductions in business-related airline travel and manage the net GHG impacts of digital tools.