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New thinking on corporate risk and resilience in the global economy.

Quick Takes

Can Working From Home Help the Environment?

If Americans drove just 10% less, the decrease in greenhouse gas emissions would be equal to shutting down 28 coal-fired power plants for a year, according to an analysis by The New York Times. To arrive at these numbers, the Times looked at the total greenhouse gas emissions in 2017 by “cars, SUVs, pickups and most of the vehicles used for everyday life” and compared that total to the output of coal-fired plants.

One possible way to achieve this is through workplace policy. During the 1984 Olympic Games in Los Angeles, the city advised employers to temporarily implement policies that would reduce workers’ commutes, such as “carpooling, staggering start times, avoiding scheduling meetings that would require traveling at peak hours, finding a place to work remotely, or, for some, staying at home,” explains Alissa Walker for Curbed. Could a similar policy push by both the public and private sector lead to positive environmental results?

Public in Rich Nations Feel Optimistic About Future Crisis Responses

Source: Pew Research Center

The majority of respondents in Germany, the United Kingdom, the United States and France feel optimistic about future public health emergency strategies from their government, according to Pew Research Center. 

Nearly eight-in-10 respondents said Germany has handled the coronavirus pandemic successfully. Despite their optimism, the American public reported a 6% drop in approval rating for their country’s response to COVID-19 from June to November. Ideology and the current status of the economy played a major role in how respondents rated their country’s response to the coronavirus.

As countries around the world ponder how to ramp up the distribution of COVID-19 vaccines, few respondents found it acceptable for their government to implement mandatory vaccination measures. The U.K., which had the third-highest vaccination rate worldwide, was the only exception, with 60% of respondents stating they would accept a vaccination program. Pew found that trust in national government is associated with more acceptance of a government-required program.

Trust in Businesses Rose During COVID-19 Crisis

Source: Edelman Trust Barometer

Trust in businesses grew during the COVID-19 pandemic, and business remains one of the public’s most trusted institutions, according to the 2021 Edelman Trust Barometer. However, public trust declined in most industries — with technology, fashion, professional services and automotive seeing the most significant reversals. 

Since business is more trusted than the government and media, 86% of the public now expect CEOs to take the lead in addressing societal issues — such as the pandemic’s impact, job automation and local community challenges. 

COVID-19 has added to the public’s personal and societal fears, with many worried about the future of the workforce. For example, the majority of Trust Barometer respondents are alarmed by the rate at which companies could replace human talent with artificial intelligence.

ESG Issues Are Getting More Attention From Directors

Source: Global Network of Director Institutes (GNDI), 2020-2021

Over 60% of global business directors surveyed said that COVID-19 accelerated their focus on ESG, sustainability and stakeholder value issues. Out of 2,000 respondents, the majority agreed that risk-scenario planning and decision-making needs to involve outside experts, according to the latest GNDI survey.

This increased interest in ESG values correlated with other highly ranked trends throughout the survey. For instance, 63% of directors expect COVID-19 to increase the competition for talent. Past surveys showed how companies with better ESG performance are likely to have both better employee engagement and greater attractiveness to prospective talent. Over half of respondents also believe there will be a growing emphasis on corporate purpose and board diversity. 

Just 17% of directors surveyed were satisfied with their response and ability to provide oversight during the pandemic. Although directors can learn from their response, they can also work with their management teams to prepare for future workforce changes — social and economic. By doing this, companies will be more equipped to absorb the shocks from these risks.

China Receives the Most Foreign Investment in 2020

Source: United Nations Conference on Trade and Development (UNCTAD)

China surpassed the United States for the first time as the largest recipient of global foreign direct investment (FDI) in 2020. China attracted an estimated $163 billion, compared to $134 billion in the United States. Global FDI flows in 2020 were an estimated $859 billion compared to $1.5 trillion in 2019, according to UNCTAD. 

China’s success was led by a steady recovery in GDP growth and effective government programs that stabilized investment during the first lockdown. East Asia and South Asia reported growth as well because of early rebounds in Hong Kong and a growing digital economy throughout India. West Asia, however, did not experience similar trends, as the region’s economy was devastated by the drop in oil prices.

The COVID-19 pandemic suppressed all investment activity — M&A deals, greenfield investment and cross-border finance deals. Global FDI flow is expected to remain weak in 2021. Although GDP growth and trade are expected to resume growth, investors will proceed with caution. 

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