Annual Letter 2021

You are reading our annual letter 2021 where we look back and share our predictions for 2021.

About NordESG: The core of our work is to distil insights from various domains and sources into actionable advice and strategy. Our core capability is in the CSR and ESG domain. We offer consulting services that support the implementation of sustainability strategies and policies across various industries.

Looking back at 2020 to learn for 2021

2020 was a year like no other in our lifetime. The COVID-19 pandemic shook the bedrock of our society and economy on a global scale. The virus has forced us to rethink how we run our businesses and how we live our lives. We had to adjust and adapt to a “new normal” by learning new ways to (remote-)work, communicate and collaborate following the premise to minimize the risk of contracting or spreading the virus. And it had to happen at a fast pace.

All of us have experienced the disruption and damage it caused concerning health, education, well-being, society and businesses. There is still a lot to learn about the long-term effects of COVID-19 and scientists from around the world share knowledge and insights in a combined effort to fight the virus and come up with a cure. It is a challenging task to predict disruptive events like a global pandemic. Our message is clear: The COVID-19 pandemic will come to an end. It has to come to an end.

COVID-19 dominated 2020. But there have been other news and developments we want to cover in our annual letter 2021, too.

Environment

According to Copernicus C3S, 2020 was the warmest year on record for Europe. From a global perspective, 2020 ties with 2016 for the warmest year recorded so far. Western Europe faced heatwaves starting late July to early August. But not only Europe was affected by the results of an ongoing climate change. A record number of tropical storms has been recorded in the North Atlantic while recorded temperatures in the Arctic have been above average. The growth rate of carbon dioxide concentration was lower than last year whilst the CO2 concentration in the atmosphere reached a new maximum of approximately 413.1 ppm.

Global Impact

Climate change has a global impact. In the central US, more frequent floodings occurred. The wildfire season in California was longer. Droughts affected the Great Plains. Many other countries from around the world experienced the effects of climate change, too. The ongoing climate change makes a strong case for a joint global effort to transition into a net-zero future. Within the Paris Climate Agreement, nearly 200 countries pledged to reduce climate-relevant emissions to keep the temperature rise below 2° centigrade. More than 500 global companies have already committed to set climate goals to do their share. Climate change affects all humankind regardless of any border. But the impact on the less developed or poorer countries will be significantly more impactful. So the demand for climate action is higher than ever.

Prevention of additional carbon dioxide accumulation in the atmosphere aiming to stop or mitigate ongoing climate change among other measures to be taken is key. The time to act is now. Even if the net-zero path is costly, the cost of inaction or insufficient action will be significantly higher on a long-term perspective.

Social

On May 25th 2020, George Floyd, a 46-year-old black man, was killed in Minneapolis, while being arrested for allegedly using a counterfeit bill. During the arrest, a white police officer knelt on his neck for nine and a half minutes. Videos made by witnesses and security cameras reached the public the day after the incident. Two autopsies found Floyd’s death to be a homicide. Floyd’s death triggered worldwide protests against police brutality, police racism, and lack of police accountability.

In the aftermath companies, institutions, and individuals made public statements, expressing solidarity with Black communities, condemning racism and calling for unity.

To name a few who spoke out: Nike, YouTube, Microsoft, BlackRock, Apple, Google, GM, NFL, Walmart, Disney, Facebook, PepsiCo, Airbnb, Adidas, Bank of America, Paypal, IBM, Amazon, Twitter, the New York Times, Ben and Jerry’s, PwC, Robert Smith (CEO Vista Equity Partners), Darren Walken (President for the Ford Foundation), Ken Frazier (CEO Merck).

Even more meaningful, many companies have pledged donations to black organizations or for causes fighting radical injustice. Some have even launched new diversity efforts. In comparison to earlier incidents, the response from the corporate world was substantially higher and underlined with action. When executed well, this can be a meaningful step toward fighting systematic racism.

Governance

Foresighted leadership was more than ever a key for corporate survival in 2020. Health workers, business leaders, policymakers, and scientists have shown outstanding leadership during the crisis. The lessons learned will be a valuable contribution to future business governance.

Some are still hoping for the “old normal” to return. Others are already defining the future shape of their organizations. A “new normal” that will be in some areas substantially different from what was the norm in the past.

2020 has seen outstanding leadership and governance based on empathy, flexibility and vision. Leaders supported employees exposed to new work conditions, employees forced to switch to remote work, or have been restricted from doing business at all. With good governance, leaders kept their teams engaged, motivated, and focused on the tasks ahead, organized the transition to remote work and virtual collaborations and managed physical and mental health risks at the same time.

Lessons Learned

The lessons learned during the pandemic will linger in the way we do business in the future. We predict that the future workforce will be more flexible, and remote work is equal to work done on-site. Digital readiness and resilience will become a safeguard for business continuity. All these aspects will resonate in the work culture of the future. To keep pace with the transition, organizations have to employ agile methods to respond faster and more resilient to unexpected circumstances. Along with this goes transparency in decision making and employee engagement. It is related to clear and precise communication – within the organization and to the public.

Shaping the future starts with a clear vision and the steps to get there. A crisis is an opportunity to review and rethink existing business models. It is a chance to re-focus on sustainable and stakeholder-oriented growth. Empowering employees by direct engagement, and take action towards equality and inclusion are also important aspects. All this will contribute to agile corporate cultures and focus on innovation not only on products and services but on processes, too.

Conclusion

The challenges are manifold. We believe that it takes a holistic approach to design and create a sustainable and stakeholder-oriented economy. SDGs and well-established standards can contribute to this goal and guide the way. Implementing an integrated strategy leads to benefits for all stakeholders – societies, economies, and ecosystems. This is our Annual Letter 2021. We are looking forward to our next annual letter.

Related Links

• Copernicus Climate Change Service – Data and news related to climate change
• Black Lives Matter – Official Website

About NordESG

NordESG is an independent consulting firm that advises on sustainability and ESG. We support companies in navigating their sustainability landscape and develop strategies and concepts individually tailored to their requirements. This also includes managing the transition to CSRD. We look forward to hearing from you via email. You can also make an appointment with us directly for a free introductory meeting.