Sustainable business during the Covid-19 pandemic

In recent years, the range of sustainable financing models has become increasingly comprehensive. Companies can now choose between green bonds, sustainable investments or loans and so-called "Schuldscheindarlehen" (loans against a promissory note) whose interest rate is linked to a sustainability rating. Financing solutions that are linked to an ESG-based sustainability rating are becoming increasingly popular. As part of this process, rating agencies not only assess the measures within the company, but also consider the impact of complying with ESG criteria on the company as a whole. As part of this process, social and corporate responsibility are just as important as environmental factors. The analysis delivers a score that makes it possible to obtain a holistic assessment of companies with regard to sustainable performance and risks.

Within large corporations, using the ESG criteria to measure sustainable company profiles is complemented by in-house sustainability reports. The European Union has recently published a report on "EU taxonomy". This sets out guidelines and criteria for evaluating economic activities that contribute positively to the fight against climate change. Critics of the taxonomy, however, complain that the framework has so far been predominantly limited to environmental aspects and should in future be extended to social and corporate management aspects. In this regard, companies are also being asked to play a constructive role in the dialogue with politicians and to provide fresh impetus based on their experience of implementation.

Impact assessments are another approach to measuring sustainability within a company. The aim here is to measure the financial and non-financial outcomes of previous measures, for example in order to be able to make informed investment decisions in the future. Before the impact of sustainability measures can be measured, however, every company should ask itself what the measurement aims to achieve and how the results will be used. Once this has been done, relevant categories are defined, the impact is calculated and areas of action are identified by visualising opportunities and risks. Even though companies need to put a lot of effort into carrying out impact assessments and there are still no uniform standards for measurability, they provide an important basis for improving sustainability within the company in an efficient and transparent way.

The Covid-19 crisis not only offers the opportunity to realign long-term investments and financing according to sustainable criteria, but also to make supply chains more resilient to future crises. Problems within global supply chains range from poor working conditions to destruction of the environment. It is not just in politics that people are already considering whether and, if so, what criteria should be used to assess which companies should receive state support and funding. Changing consumer needs, temporary shop closures and limited transport routes have created an imbalance in supply chains. In many companies, therefore, some parts of the supply chain are now under scrutiny in order to ensure that economic efficiency is combined with social and environmental sustainability in the future. The challenge will be to create new, more resilient supply chains with limited resources or to optimise existing ones within a very short time frame.  To emerge stronger from the crisis, companies must move beyond short-term crisis management and embed more sustainable solutions in their supply chains.