US & Global Economic Impact Analysis and Forecasts

Freedonia analysts and economists are sharing their insights on how major events are impacting different parts of the US and global economies.

Sustainability: What Is the Long-Term Effect of this Pause on Greener Business Practices?

Companies have pressed pause on  their greener business practices for a number of reasons. For instance, Starbucks eliminated its program that allowed customers to bring their own reusable cups for hygiene purposes, and General Motors ended its car sharing and long-term rental programs because many people have been sheltering at home rather than traveling or commuting.

Recessionary economic conditions have companies tightening their belts as revenue has been sharply reduced and uncertainty remains as to how long that will last. The challenge for companies – big and small – will be to spend strategically, where it is needed, to ensure that long-term goals are not side tracked. Executives such as General Electric’s CEO Larry Culp noted in an interview with CNBC, “We don’t want to spend one dollar more than we need to this year, all the while making sure we don’t shortchange the long term.”

Sustainability focused investor groups understand the complexity of the current situation but are continuing to watch and report on what companies are saying and doing with regard to their sustainability pledges.

It’s worth understanding that sustainability is still a business opportunity. If people come out of the crisis living and working differently (e.g., online school, increased online shopping, more work from home, video conferences over in-person business travel, virtual trade shows, greater concerns about complex international supply chains), how can businesses respond in a way that reduces waste and energy usage? Packaging and power supplies are significant costs in many businesses.

BP is one such company that is keeping its eye toward that future. BP Chief Executive Bernard Looney noted in a recent conference call that the long-term outlook for the company must be an ongoing turn toward renewable options. He said, “The pandemic I think only adds to the challenge for oil in the future.”

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