As the world braces for what could be the worst of the coronavirus pandemic, we need to also think about how we come out the other end of this. It may be instinctive to return to the status quo ante as soon as possible. Compared to our current situation, it represents safety, health and prosperity, and only then might we revisit what needs to be changed. Today, the status quo from just a few weeks ago may seem relatively stable, but we knew then it was not sustainable for resilient, thriving societies and economies. So all of us — including the business community — need to consider what happens as we emerge from this crisis.

Right now, businesses are responding to the call to take a socially responsible, purpose-driven and publicly accountable approach to all stakeholders — employees, suppliers and communities — in addition to shareholders. It may seem inappropriate to be thinking of longer-term sustainability in these times of emergency, but the lens through which we are forced to take urgent action right now is the one business leaders can use to ensure the rush to resolve one emergency doesn’t accelerate the onset of another. Let this be the beginning, not the peak, of a corporate transformation journey, so that once society is beyond the immediate threats, we move into a refreshed approach to capitalism

Shedding Corporate Limitations

In normal times, practitioners of innovative sustainable businesses tell me how much more they would like to do, but they claim they cannot because they are beholden to the limited mandates given to them by their investors, by policy makers and by their customers.

For example, as Paul Polman, former CEO of global consumer products giant Unilever, put it, “Too many companies are running their business into the ground, I would argue, by being myopically short-term focused on the shareholder.” Last August, the Business Roundtable (BRT) tried to shift the narrative by redefining the purpose of a corporation to focus on all stakeholders. While Eliot Metzger and I critiqued it as not going far enough, at the same time, this statement from the Council of Institutional Investors critiqued it for going too far, illustrating the limited mandate given to companies when they move to put the benefit of the many above shareholder returns. The coronavirus pandemic gives business leaders the opportunity to push past some of these limitations.

The current health crisis may offer an opening for this change and a new social contract, with business taking a broader role in addressing the well-being of all of society. As Economics Nobel laureate Paul Romer famously noted in 2004, “A crisis is a terrible thing to waste.” Romer was talking then to venture capitalists about education, but a recent examination of his notes in Psychology Today suggested that the coronavirus pandemic is a similar critical situation, when “priorities are clear, rigid rules and regulations suddenly become pliable, leaders pay attention, and change, even far-reaching change, is possible.”

The COVID-19 crisis offers three opportunities for businesses that want to expand their mandates to lead to a more sustainable, prosperous future:

1. Change Business Models as the World Rethinks What Matters    

Three years ago, Simon Wolfson, CEO of UK fashion retailer Next, said, “We are losing sales because people don’t want to buy more stuff.” By late 2019, mainstream global businesses such as Ikea and H&M were exploring business models that would derive profit from repair, resale and services. In 2020, we may see that staying home to mitigate the spread of COVID-19 leads people to recognize that fulfillment comes not from what they buy, but from services and experiences. So instead of coming out of the crisis by doubling down on pre-crisis consumption patterns and business models, the crisis presents the opportunity to switch from selling more stuff to more people to providing services, reselling previously owned products and creating new kinds of jobs. If ever there was a time to double down on the journey from a linear to a circular economy, it is now.

2. Emphasize the Social in ESG

We know that the most vulnerable suffer disproportionately in times of crisis. Through a business lens, this divide is evident in the inequity between investors and employees, customers and farmers, white collar managers and blue-collar workers, and between providers of essential services (like sanitation workers and grocery clerks) and providers of luxury products. But in parallel, the crisis puts a spotlight on how interdependent we all are, making it so clear that one person’s behavior affects another’s well-being. Business models that don’t protect all workers’ income and health result in the poorest members of society not only suffering most, but also unable to self-isolate, which for many is an unaffordable luxury. The principles of environmental, social and corporate governance (ESG) are more relevant now than ever, with an emphasis on the social component. If ever there was a time for companies to demonstrate their commitment to the health, safety and prosperity of all stakeholders by addressing inequality in the business model, it is now.

3. Invest in Supply Chains

The importance and fragility of global supply chains is more evident now than ever. As the Science Based Targets Network (SBTN) notes in its call to action for companies, businesses must prioritize mapping “value chain and assess risk to freshwater, biodiversity, ecosystems and oceans in major impact locations.” Through efforts to set scope 3 targets under the Science Based Targets initiative (SBTi), we know that understanding supply chains, having comprehensive and accurate data, and engaging global suppliers is complex and challenging but essential for climate change mitigation. A global health crisis highlights the same challenges and extreme vulnerabilities. If we are going to make supply chains more resilient for either situation, businesses must better understand and support them. If ever there was a time to put thoughtfulness and resources into supply chains to ensure stronger and more resilient value chain ecosystems, it is now.

The coronavirus crisis poses existential challenges for many businesses, but at the same time offers opportunity to change and pursue a future path of growth. As we emerge from the crisis, we must ensure that business does not slip back to a status quo that doesn’t adequately protect people and planet, but that we harness the new mandate to propel us into a new, improved capitalism where businesses can outcompete the market without outpacing the resources of the planet.