Experts Weigh In: How Covid-19 Affects Our ESG Initiatives (and What We Expect Tomorrow)

(Credit: Pexels)

by | May 4, 2020

This article is included in these additional categories:

(Credit: Pexels)

We talked with our readers about how the covid-19 pandemic is currently affecting business in terms of their sustainability, environmental and energy management goals, and we asked them how they expect their goals (or those of their customers) to be affected in coming months. Here’s what a handful had to say.

How is the covid-19 pandemic affecting your own (or your customers’) short- and medium-term environmental and energy management initiatives?

As Companies Shift from Disruption to Recovery, Watch for Operational ‘Buoyancy’

Today’s uncertain economy has executives rethinking their strategy and spending on many fronts. This may mean that action on energy and sustainability has been deprioritized at a time when continued momentum, on climate change in particular, remains critical.

As businesses begin to shift from disruption to recovery, we anticipate that they will do so with a focus on improving the long-term health and buoyancy of their operations, including their supply chain. Companies that have invested in sustainability and energy management programs have demonstrated greater financial resiliency and are more attractive to investors looking for more stable opportunities. And corporate demand for renewable energy remains steady, as businesses continue to take advantage of existing market opportunities.

When organizations leverage the right innovative funding methods, they can make better investment in and progress on energy, sustainability, and resources management. Businesses are increasingly turning to mechanisms like Energy-as-a-Service, offsite renewable energy power purchase agreements (PPAs), and energy/green bonds as a means to advance their objectives in a more cost-effective way than using traditional CapEx or OpEx. These mechanisms bring companies closer to their environmental goals and provide far greater flexibility, offering stability in an ambiguous and volatile time.

—John Hoekstra, Vice President, Sustainability & Cleantech Services, Schneider Electric Energy & Sustainability Services


Less Efficient Bottling in the Short-Term but Better Management in the Workplace

Regarding energy management, we are becoming more adept at virtual meetings. The shelter-in-place orders limit our ability to travel to the vineyards, and our management team and sales force have stopped flying to meetings. The majority of our non-production crew is also working from home. Thus, our carbon footprint is definitely being lowered, and in the long-term I believe that we will think more about the necessity for travel, especially if we can meet virtually. 

If we extend environmental management to include the workplace, we are currently operating a little less efficiently as we slow our bottling line speed in order to ensure good social distancing. Over the medium-term, we may improve our labor efficiency as we plan to do as much as before, but with fewer people to avoid close interaction until there is a vaccine.

—Steve Lohr, CEO of J. Lohr Vineyards & Wines and son of founder Jerry Lohr


Lock-In for Mission Critical Employees

At the Carlsbad Desalination Plant, we have implemented a shelter in place plan to ensure operational continuity alongside plant manager, Poseidon Water. With the help of mission-critical employees who volunteered to lock-in at the plant for 21 days, we’re able to continue delivering fresh water to the San Diego community. As the largest seawater desalination plant in the United States, the facility produces up to 50 million gallons of fresh water per day, which is enough to supply approximately 400,000 people with water or 10% of the consumption in the service area. As the pandemic has continued, we have even rotated a new group of ten mission-critical employees who volunteered to shelter in place and take over for the initial crew in order to keep water flowing for their local San Diego community.” 

Gilad Cohen, CEO, IDE Americas Inc.



Securing Lower Energy Prices while Deferring Preventive Maintenance

Digital Realty is maintaining its strategic focus on ESG through the covid-19 disruption, and even expanding its efforts in certain areas. With regard to energy and environmental management, we are identifying opportunities to secure lower energy prices and clean energy for our portfolio in light of changes in the energy market. In the short-term, we have temporarily deferred preventive maintenance for many non-essential energy and water conservation projects as part of our commitment to keep customers and essential workers safe at our data centers. We remain fully committed to driving towards our long-term goal of powering our facilities with 100% renewable power.

Aaron Binkley, Chief Sustainability Officer, Digital Realty


Business as Usual

At Evian, this crisis has only sharpened our environmental ambitions; we have no intention of scaling down our efforts. Just [last month] we announced global accreditation for becoming carbon neutral, building on big innovations at our factory where we use 100% renewable energy and rail transport to distribute the water. We are continuing to work hard, though, and this pandemic has provided us with an impetus to do even more as we reiterate our commitment to remove plastic bottle waste from nature by 2025.

Shweta Harit, Global Brand VP, Evian



Reevaluate Everything

The current public health crisis is causing everyone to reevaluate everything, and energy and environmental efforts are part of that. Energy resiliency is top of mind right now, with renewable energy and storage likely to play a key role in business continuity planning. On the environmental side, companies are thinking about the physical environments they occupy, with focus shifting to indoor air quality monitoring, cleaning protocols and physical layouts. 

—Seth Strongin, Vice Chair, USGBC-Los Angeles Board of Directors, Associate with Arup


Projects Moving Forward

Verdical Group is a green building and sustainability consulting firm based in Los Angeles focused on commercial and multifamily projects. Since the onset of the covid-19 crisis, our building projects have mostly continued to move forward. Our projects typically have two to four year schedules and since the coronavirus is generally viewed as a relatively short term crisis, most owners have opted to stick it out and continue on as scheduled. We’ve had a couple projects go on hold and a few more with schedules slightly delayed, but the majority of our projects are moving forward. 

—Drew Shula, Assoc. AIA, LEED AP BD+C, ID+C, GGP, ENV SP, Founder & Principal, Verdical Group


Downtime Allows for Optimizing Operations, Evaluating Tech and Vendors, Updating Systems

The commercial real estate (CRE) industry has historically been a significant contributor to climate change, with 40% of US emissions coming from the built environment. As offices, hotels and retail buildings remain vacant due to self-isolation orders nationwide, the silver lining is that building owners have a unique, positive opportunity to make an environmental impact by optimizing their operations while tenants aren’t in the building, not to mention helping to recoup some of the costs stemming from the pandemic. 

There are both short- and long-term opportunities. For example, most buildings have “shoulder season” sequences that manage seasonal energy needs. These can now be easily deployed during this downtime to ensure less energy is used while tenants are away. Other tips include working on deferred maintenance of equipment or re-examining a buildings’ automatic, pre-fixed temperature and lighting controls that run on timed daily sequences, and adjusting them to be more dynamic for today’s realities. 

With schools closed due to covid-19, we have worked with Aspire Public Schools to remotely adjust the equipment across multiple campuses in its portfolio to guarantee that the organization is conserving resources on costly operations like heating when schools are out. Longer term, building owners and operators can take this time to evaluate new, advanced technologies that help further optimize energy use including updating their BMS systems, replacing equipment to more energy-efficient solutions or evaluating vendors that they currently work with to ensure investments in energy efficiency are paying off.

—Matthew Ganser, EVP of Engineering and Technology, Carbon Lighthouse


How do you envision the pandemic affecting corporate sustainability and energy management strategies in the months and years to come?


‘Superfluous’ Strategies May Suffer

In the short term, covid-19 will likely be detrimental to corporate environmental and renewables strategies. 

With the demand for products and services down significantly as a result of the pandemic, revenues and profits are also declining. When companies endure significant slumps and revenue shortfalls, business owners are faced with the choice of whether or not to continue renewable energy and environmental improvement/mitigation investments. When forced to make difficult decisions, those investments perceived as superfluous to their core business will be cut first. Public companies are beholden to shareholders, who expect a return on their investments. 

Renewables are typically long-term investments that deliver a return over a period of many years or decades as opposed to fiscal quarters. Therefore, the question becomes what is the level of near-term pain and/or losses that shareholders will tolerate in order to continue investing in something many may not feel is core to the business…. [W]e also believe that energy companies must continue to invest in sustainable energy projects now, if they expect to be viable companies in the future. The next few months will demonstrate which companies are committed strategically to reducing their carbon footprint and investing in renewable energy sources versus those for which these investments are done for public relations purposes.

Steve Downey, President, Harmony Fuels


‘Dress Rehearsal’ for Climate Collapse

Short-term, energy usage has gone down by approximately 20%. An unintended consequence of work-from-home may be the alignment of distributed energy and onsite solar/storage solutions supporting distributed work. We are seeing what the world looks like with less pollution. All sorts of shifts in mindsets may drive new innovations and decarbonization.

One would hope that the world is having a firsthand experience of seeing what happens when we do not prepare for threats. In many ways, covid-19 is a dress-rehearsal for climate collapse. With scientists, we are learning that collective will can enable us to move quickly towards collective goals.

—Shuli Goodman, Executive Director at LF Energy


A New Generation of Leaders

At Veolia we believe that the current crisis will define a generation of leaders who realize that the planet is a small and fragile place.  What happens in one part of it can and will affect the rest of it. There may be a short term slowing of initiatives due to economic conditions but in the long run this crisis will force leaders to realize that we are all in this together and drive positive actions for the environment.

—Mike Byrnes, SVP, Veolia North America


Efforts Will Become More Prominent

[T]he argument that we have to choose between economy and environment is a false dichotomy. Companies now have a tangible example of the economic disruption that climate change could potentially bring and won’t be able to put it “out of sight, out of mind” so easily. These are highly uncertain times and we’re not seeing too many bold moves immediately, but in the medium- to long-term I think energy and environmental management efforts will actually become more prominent in mainstream business planning.

—Seth Strongin, Vice Chair, USGBC Los Angeles Board of Directors, Associate at Arup     


Physical Distancing, Shift Work Could Lead to Increased HVAC, Lighting Needs

The covid-19 pandemic has created an incredible shift in work on a global scale. As businesses look ahead to planning re-entry to the office, the primary concern is employee wellness. While the current and unprecedented global reduction in emissions is tied to many of the “Safer at Home” policies that are taking cars off the road and bringing manufacturing plants to a close, business energy-use reductions are simply being offset by an increase in a somewhat equivalent consumption at home. 

In some cases, the return to work may spark an unintended increase above the previous state of normal. Businesses are contemplating how re-entry will work, which with the current thinking, includes increasing physical distancing between employees. This can result in the increase in office space needs, the introduction of shift work, recapture of meeting space into dedicated space, or investing in technology to further promote a new and now more accepted paradigm shift of working from home.

Some of these solutions may have a negative impact on energy consumption in offices. Shift work, where there previously was a single shift, will mean businesses may be running their heating, cooling and lighting between 16 and 24/hours/day in lieu of eight.

—Anthony Brower, AIA, LEED Fellow, Director of Sustainable Design, Senior Associate, Gensler (Los Angeles)


‘Amplify Your Greens’ 

Prior to the crisis, we saw companies accelerating efforts to incorporate green space into commercial, retail and residential developments. They intended to capture the profound energy and operational savings produced by abundant exterior tree canopy and interior greenscapes like greenwalls. Many also understood that greater greenery supports health, wellness, focus, concentration, productivity, employee satisfaction and sales. We are hopeful this crisis accelerates and amplifies the trend.

—Cassy Aoyagi, USGBC Los Angeles Board of Directors, President, FormLA Landscaping 


Resilient and ‘Prepared for the Worst’

There’s nothing more vital to economics than business continuity. To this end, I think we’re going to see a surge in resiliency planning for buildings and cities related to disaster preparedness. Whether faced with our current pandemic, or a future technological or climatic disaster, businesses want to be prepared for worst-case scenario possibilities. Resilient green buildings are more durable, and net zero buildings are capable of islanding and functioning independent of the grid, generating their own energy and water on site. 

Our clients are using third party green building certification programs for buildings like LEED and Living Building Challenge to document environmental performance for project elements including energy efficiency, water efficiency, renewable energy production, biomimetic (nature-inspired) design, and the use of healthy materials. As the building industry reacts to covid-19, I think we’ll see continued growth in the wellness space to build spaces that are as healthy as possible for building occupants. We’ll see renewed focus on things like air quality monitoring. 

Drew Shula, Assoc. AIA, LEED AP BD+C, ID+C, GGP, ENV SP, Founder & Principal, Verdical Group


Crisis Offers Time to Plan Long-Term Strategy

In the short term, given the recession, new expenditures for energy and environmental management may be limited, but this slow period allows the rethinking of long-term strategy.

In the longer term, a lot of climate-related barriers were broken, including the ability of government to spend huge sums to address a crisis, the obvious connection between pandemics and climate change, the joy of breathing post fossil fuel air, and the success of telecommuting may portent more aggressive initiatives. 

John Zinner, LEED Fellow, Principal, Zinner Consultants


Big Environmental Gains On Hold

Many companies are facing significant business uncertainties related to the current covid-19 pandemic and as a consequence, putting off long-term energy and environmental management efforts. During this time, companies’ short-term priorities remain on stabilizing their business while balancing their employees’ health, safety and general well-being, so that they can thrive after this difficult time of uncertainty. Until there is some stability and predictability of what the future holds, it will be unlikely that we will see big gains in achieving some of these long-term environmental strategies

Carl Smith, President and CEO, Call2Recycle


Shifting Priorities as ‘We Plan to Minimize Power Disruptions’

The impending economic recession due to covid-19 will no doubt change the environmental and energy management efforts of commercial and industry companies – but in ways energy storage has been offering all along. Now more than ever, companies need a resilience plan to manage accelerated risks and unpredictable impacts. Priorities are shifting. Energy storage solutions are especially vital to the C&I sector for minimizing power disruptions to maintain operational excellence, unlock cashflow, and innovate efficiencies. 

Alan Russo, Stem CRO

Additional articles you will be interested in.

Stay Informed

Get E+E Leader Articles delivered via Newsletter right to your inbox!

This field is for validation purposes and should be left unchanged.
Share This