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Executives Are Too Optimistic About a Return to Normal

Source: Oliver Wyman Pandemic Navigator; https://pandemicnavigator.oliverwyman.com/

Note: Each example represents only one of many possible pathways to the herd immunity threshold; pathways become more numerous and flexible the further out the target date.

Many executives are making planning decisions based on the notion that by the very beginning of 2021, things will get “back to normal.” However, according to recent Oliver Wyman analysis, the long haul will be longer than most expect with normalcy unlikely before Q3 2021.

Recent news on 90-95% vaccine efficacy and significantly higher daily case run rates than those examined above will also have an impact on timing to herd immunity. Taken together, an average new daily case rate of 120,000 and a 90% efficacy vaccine, can improve the timeline by over a month and a half. However, the impact of such a rapid daily case run rate is dramatic — it would result in an additional ~200,000 deaths as compared to a run rate of 70,000 new cases per day. 

Given the long haul in front of us, companies may need to consider if what has been working for the past seven months can be sustained for the next 9 to 12.

Food Production Is Pushing the Climate Target Out of Reach

Source: Our World in Data

Food production alone could cause the world to miss its 1.5 degree Celsius climate target even if countries stop burning fossil fuels immediately. Along with energy, food production is one of the biggest contributors to global greenhouse emissions — one-quarter to one-third of emissions come from food systems.

Our World in Data identified five ways to reduce emissions from the food industry: adopting a plant-based diet; consuming healthy calories; limiting food waste; and improving crop yields and farming practices. Shifting to a plant-based diet would lead to the biggest reduction in emissions. If these practices were fully adopted by 2050, the world would see net negative emissions.

Both consumers and producers have significant roles to play in reducing food emissions that involve legislation, investment and creating better policies. Although fully incorporating these five methods into daily activity could be difficult, the changes would lead to “a global food system that is more productive, has a lower environmental impact, and provides a healthy, nutritious diet for everyone.”

Many Americans Still Lack Household Internet Access

Source: Pew Research Center

Forty-three percent of people with a household income of $30,000 or less do not have internet access at home, whereas ninety-three percent of households earning $100,000 or more have internet access, according to a Pew Research Center survey.

This digital divide is persistent in the United States, creating a barrier to digital information, education and products and services for lower-income Americans. Early this year, 27% of lower-income adults had access to a smartphone but did not have broadband internet at home — a 12% increase in eight years. Meanwhile, only 6% of households earning $100,000 or more were categorized in this group.

COVID-19 exposed disparities in online access in the U.S. as daily activities, like work and school, were abruptly moved online. Families with lower incomes faced a greater challenge to make the transition since they rely more heavily on mobile devices and often lack reliable high-speed internet. As remote work and education become more permanent, new technologies, like 5G, will need to be accessible to everyone “through early investments and targeted deployments” to prevent future economic and academic gaps.

Metal Prices Soar As Economies Recover

Source: International Monetary Fund (IMF)

Global industrial metal prices reached a nine-year high in May, with a 72% increase compared to pre-pandemic levels. Of the metals reviewed, the price of copper is up 89% year-over-year, iron ore is up 116% and nickel is up by 41%, according to the IMF.

Four factors contributed to metals’ soaring prices: manufacturing activity, supply chain disruptions, storability and a push for a greener economic recovery. Many mining operations temporarily paused due to COVID restrictions, and freight rates for transportation of bulk materials reached a 10-year high — both attributing to the cost of metals. 

Market predictions indicate that industrial metal prices will rise a further 50% YoY; however, prices are then expected to decrease by 4% in 2022. As the U.S. and EU introduce high-scale infrastructure projects, demand for copper, iron ore and other industrial metals could spike to accommodate a quicker energy transition. 

Pandemic Policies Leave Societies Divided

Source: Pew Research Center

Over sixty percent of the publics surveyed feel their countries are more divided now than prior to the pandemic. Among 17 advanced economies, more people in the U.S. (88%) felt increased division compared to any other country, followed by the Netherlands, Germany and Spain. Only 34% of countries surveyed feel more united this year, according to Pew Research Center.

Those with negative views of the economy are more likely to report societal division. Attitudes about COVID-related restrictions also affect the public’s sense of division: Those who believe there should have been fewer restrictions are more likely to agree that society has grown more divided. 

As economies recover this summer and vaccine distributions continue, 75% of respondents have confidence that their health care system can handle future global health emergencies, but a median of 65% continue to feel the day-to-day impact of COVID-19 a great deal.

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