COVID-19, Climate, and the Clean Economy: Gigatrends Changing the World
[Paul] Hello and welcome to today's webinar, "COVID-19, Climate and the Clean Economy: Gigatrends Changing the World." I'm Paul Michelman, editor in chief of MIT Sloan Management Review. I'll be your moderator today.
Today's program is sponsored by Slack. This event will be recorded, and the recording and slides will be available to all attendees approximately three to four business days after the end of the live event. We welcome your questions. To submit questions, please enter them anytime in the Questions module on the GoToWebinar control panel.
We'll answer as many questions as time permits. If you encounter audio or other difficulties during today's program, please follow the instructions in the Questions module. Our speaker today is Andrew Winston, author of "The Big Pivot: Radically Practical Strategies for a Hotter, Scarcer, and More Open World" and a regular contributor to MIT Sloan Management Review. Andrew, welcome and over to you. - [Andrew] All right, thank you so much.
I'm assuming my audio is on and everyone can hear me. You'll let me know if not. Well, thank you, Paul.
It is an honor to be here, and I'm really, I guess, excited and surprised to see how many people have signed up, which, I guess, it's a sign that people are at home and really running out of things to do or that we're all looking of some connection and some understanding about where we are and what's going on in the world. I wish I could say that I have all the answers. I don't think anybody does.
We are clearly in a very strange and hard time. We are rethinking what's normal in our lives what we do as citizens, what it means to be a business, what it means to be human. And we're seeing, I think, unbelievable heroics. Obviously, doctors and nurses who I'm in awe of, but also just the people keeping our food and consumer goods moving.
So we can stay home safely and have food arrive and have the water turn on, have the power turn on. And so I kind start, I think every day, with a deep gratitude that we're able to even shelter in place the way we are. I think we're in a time to think about what our society and economy might look like as we come out of this over the next two years. One to two years, we're not sure.
But I'll be honest, if people are looking for a kind of, “here's the lessons learned exactly or the silver lining,” I'm not really super comfortable with that approach right now. It seems a little bit inappropriate. I think we're, as long as it feels like we've already been locked down, we're really at the beginning of this in many ways.
And we don't really know what's coming, but we do know that there's a tremendous amount of suffering around us. And I think there's a time for kind of mourning and grief. And I think sure, we can observe maybe what we can take away from what's happening right now, but I do think it's too early to say here's exactly what we've learned from this and let's move on. We have to tackle what we have in front of us. So my goal is really twofold, I think. It's to, I think, remind us kind of quickly of the context that we're in and the big challenges that we're facing outside of COVID, and how those kind of interact, and then provide some observations or reflections on this moment and what business and people should be potentially be thinking about.
And I really do welcome people's feedback. This is really the first time I've given this talk. It's a very deep variation from the kinds of talks I've been giving for a number of years.
And I think it will change. What we want to say will change constantly. So I'm going to try to go pretty quickly through the other crises that we're facing, the other gigatrends that remain. Whether we like it or not, we have other big challenges that are sweeping the world.
They are reshaping the world. There's kind of a category of geopolitical shifts, deep demographic change as the world gets older and some places younger, and others the inequality, rising inequality around the world, which is getting worse and worse in Western economies. The power moving from West to East in the world as the, at least until this happened, 2020 was the year that the economies of Asia were going to be larger in GDP terms than the rest of the world. Urbanization, everybody moving to cities. And then over the last few years, obviously, this kind of nationalism populism shift.
This focus on every man for himself. So clearly there's a big question now about how pandemics and COVID in particular affect these historic changes. These were shifts or trends that I didn't think were very changeable until recently. And now, who knows? Maybe the shift in power to the East will accelerate as potentially those countries are dealing better with this than others.
Maybe they'll be less urbanization that we thought as people think, "Maybe I don't want to be living as close to everybody else." And in terms of nationalism, populism, are we going to build more walls? Are we going to be more afraid of each other or less? As we realize how dependent we all are on each other. So I generally talk about five or six big trends and issues that tie to the sustainability agenda, but I think really some of the biggest issues in the world that are a little more tactical, that are things we can kind of develop strategies for, but they're just as large as these big geopolitical ones. So let me run through quickly kind what my, I guess, normal talk would be, the kind of normal perspective. And then we'll spend the rest of the time really on observations and how COVID ties to all of this.
So first of all, we have a climate crisis. It's an existential crisis. Unfortunately, it very much remains along with tons of related issues like air pollution, which kills prematurely millions, seven or eight million people a year.
The extreme weather that we've seen in recent years, the Australian fires, floods, storms, droughts, they're going to continue to get worse. And we're going to be entering another hurricane season this year. We're going to see more fires.
There's no stopping that right now. Even with the economic slow down or possibly depression to come, that might slow down things a little bit. We'll see, obviously, lower emissions, better air quality in the short run, but not really in the medium or long run.
We're still going to be trying to provide a quality of life for eight billion people going to nine or 10 over the next generation. And time is still very, very short. We have heard repeatedly from the scientific community that we have a very short amount of time.
This decade, potentially, to try to cut in half our emissions so that we can have a shot at holding the world to 1.5 degrees of warming. And I'll come back to in a little bit kind of what that means. But we have a tremendous sense of urgency here. And there are very clear parallels with the COVID situation in my mind. And I'll get to that more in a bit. But just consider that right now there's organizations in the U.S. Western states and New England states,
they're coming together to try to manage COVID issues together. And it's very similar to the group, and it's almost the exact same states that have developed their own greenhouse gas- trading schemes or other regional efforts of climate. It's basically filling the gap that the federal government has left and that the states feel they have to. And second, I'd say that there's unfortunately, a clear parallel in the denialist community. They're using really the same playbook, and it's a lot of the same players.
They have been saying for weeks and weeks, well, this is overblown. They're still saying this is exaggerated. The same things they've been saying about climate change for a long time. The difference now is kind of shocking is that the COVID changes and what's happening to the world is happening in days, not months or years. So when someone says, "Hey, it's not a big deal," and puts that out in a tweet, within a week that can look incredibly stupid. And that is very different.
And I think if we can think a little bit ahead about the things people say about climate and have said in recent years, and how out of touch those will seem, I think maybe that will give us some hope for changing the dialog. Second in the kind of gigatrends world there's just clear pressure on resources. We have, again, almost eight billion of us. They are generally getting less poor, which is one of the great successes of modern times, and using more stuff. Again, we don't know what will happen over the coming months or years but the long term trend is getting less poor, using more materials, less reliable sources of water in particular.
And so we're still going to need very different thinking about our economies and how we produce goods and services, how we build this circular economy, where every material finds a use that we're not drawing as much from mines and virgin materials which are getting harder and more expensive to get to. If you look at almost every major metal like copper, the ore grade, the amount in the earth is kind of declining constantly. It's getting more and more expensive. So we're going to need circular and we're going to need generative approaches especially in agriculture.
Ways to produce things, ways to make our food that actually make the world cleaner and lower carbon as we make them. Third, we're seeing a tremendous shift in the clean tech world, this revolution. The growth has been unbelievable. And I'll come back to that in a minute. And there's some conflicting reports right now about what's going to happen to this build out of renewables. A big article in the New York Times said, it's continuing even with the economic slowdown.
Other see a general slowdown. Of course the torrid pace of adding renewables to the grid of electric vehicles, of batteries, that's going to slow along with everything right now. But I do believe the share of the economy, of the share of energy and transportation will rise, or possibly we'll see progress move maybe differently in different categories.
If oil stays dirt cheap, if basically the cartels fight against each other and just want to get oil out as quickly as possible to get cash during this hard time, we may see the pathway or the acceleration of electric vehicles slow. People tend to buy bigger vehicles and gases cheap. But there's laws in places around the world increasingly moving us away from internal combustion engines over the next decade. So I think the long run for EVs is very strong. But I have no doubt that the grid, whatever is built to put on the grid, will continue to be a majority renewables. Fourth and fifth are two pressures or gigatrends that are really multipliers in many ways.
And one I think is in some ways the most powerful. When I talk to companies or executives, this is the one they bring up the most, which is it's been for years millennials, now it's Gen Z. So younger millennials and Gen Z, they clearly want meaning and values in their work, in their lives. Again, will this change right now? Will this be as important if we're at 20 or 30% unemployment? I'm not sure.
Maybe it will become more important as people think during this time, and it's an incredibly centering moment about what really matters. What do we really care about? Maybe people will want work that really matters even more. But the millennial change. And the older wave of millennials are getting towards 40 now, so these are not kids.
They're having an impact on business. I hear it in the finance sector over the last couple of years especially that they're demanding more of their investments. They want impact investing. And Gen Z, kind of led symbolically by Greta Thunberg, is rising very fast clearly. And frankly they're pissed off, and they should be. They've been in the streets for the last year or two about climate.
How are they going to emerge from lockdown? How annoyed are they going to be after being locked in with their parents for months and months? And I'm only partly kidding. I'm living with two teenage boys. We are on day 34, not that anybody's counting, and it's a stress, right? It's also kind of a time of connection in our family. But this generation has a lot to say.
And fifth is the demand from the younger generations and really all of us increasingly for more transparency in everything we do. That's data-driven, that's the rise of AI, big data, blockchain. And it's demanded by all of us really, not just young people, that increasingly we wanted to know what's in every product. We want to know how it's made. Who made it? Were they paid a living wage? What's their treatment by the company? What's the carbon footprint? What's the water footprint? And now, if anything, we're entering potentially a much more transparent world, one of the kind of clearest pathways out of the situation we're in is increased testing and tracking.
A level of tracking of all of us that we may not be comfortable with, but I'm not sure we have much choice in. Where everybody would basically through their phones, it would track where you've been, who you've been in touch with. So we know contact tracing. I think we're going to see tremendous amounts of transparency. And you're seeing obviously pressure on companies that's been growing.
All of these pressures have been building and building for years. And they're really not going away and I think for the most part are strengthening. And what this has led to is, I think, even before we got into this pandemic, that in large part because of these five or six kind of gigatrends, business was being forced to rethink everything already. Getting sustainability on the agenda of big business was a battle that arguably we already won. Every large company has a sustainability report. They have goals.
I do a lot of work around goals. Most of them are legitimate. I think most companies are actually doing real things.
They're buying renewables. And so we were in this kind of grand recalibration of the role of business in society already. And we saw as a symbolic kind of moment last August where these companies, 200 of the largest companies, the largest companies in the U.S. announced through the Business Roundtable that the purpose of a business was kind of shifting in their minds. That after 20, 30 years and arguable maybe 40 or 50 since Milton Friedman, that we were no longer going to talk about just serving shareholders. And frankly, right now, I find shareholders and the market to be completely untethered from reality as we see the market going up as 16 million people file for unemployment.
So I don't know if I can trust the market to have any bearing on what's really happening in the world. And maybe that's part of what these companies are realizing. But what they said that's interesting in this statement was this focus on shareholders only is actually not how we've been operating for a while. We've always thought about stakeholders, or at least more and more. Now this statement you could argue was for show or maybe a lot of companies didn't really realize what they were signing, but I think it is symbolic. And it said, "We're having a different conversation."
And you see from really interesting outlets like the Financial Times last fall started a whole area of their website about resetting capitalism. We're hearing this from unusual sources now. And this is before everything happened.
And then investors as of December, vast majorities said, maximizing shareholder returns can't be the primary goal of the corporation. And in January we heard from Larry Fink, they had the BlackRock, the world's largest asset owner, telling companies that they needed to think long-term. They needed to really focus on climate change as a systemic risk.
And really that the way we create value in business has shifted. Now, will this continue? Will this attitude of investors about we have to focus on ESG or Environmental, Social, and Governance? I'm not sure. There's evidence now that the companies that have been managed best for those dimensions of their business are doing better in this market turndown. We'll see, all right? We have a long way to go. But what we're saying now is that there's a new kind of multi-stakeholder model of business that is arguable the only path forward.
There's going to be tremendous tension on businesses. And obviously, there's sectors that are just going to be trying to survive, hospitality, tourism. so many that are, it's not just a downturn like 15% loss of revenue in the last downturn but 90% loss. But these companies are just going to be trying to survive and probably aren't going to focus on their carbon footprint for a while.
But in the larger context, we're still rethinking what it means to be a business. And arguably, everything happening now is pushing companies more towards that. We are seeing an amazing amount of activity from companies trying to do I think the right thing. You could be cynical and say they just want to look good. But you see companies, and this is one of my, I guess, kind of favorite little stories right now is that a company called Fanatics that makes baseball uniforms.
And there's no baseball right now, they are making gowns and masks. Ralph Lauren, Gap, they're doing that. LVMH, P&G, and Anheuser-Busch among others are making hand sanitizer in their factories. Crocs is donating shoes to healthcare workers. And so companies are, I think a lot of them, doing the right thing.
There's some that maybe aren't. You see some industries trying to get in there and change the laws or help it relieve them from some of the pressures they've been under. Airlines are asking for kind of some relief on carbon commitments in their sector. It's kind of a knee-jerk reaction for companies to want to reduce regulation. And you see some companies seemingly charging three or four times what they used to for making a ventilator.
And I'm sure there's a little bit of overtime pay. And we should support the people working in those companies. But some of this is just profiteering.
And I think this will net out and people will remember, specially employees. But people will remember the companies that did the right thing and tried to serve their community. So let me start in on what I think are some themes.
What can we observe about what this all means for people in business? So there's seven kind of ideas that I've been thinking about. One is that we're in an exponential world. We have to get ready increasingly for things that move very, very quickly.
It's shocking. Exponential change is shocking and really not intuitive. It isn't the way our brains work. Things happen seemingly slowly and then all at once. And I think it partly explains why we can be so slow to act on things like COVID in the short run and definitely climate in the long run.
The tragedy that we're experiencing has been written in these charts. The explosion of a pandemic in every country after country follows incredibly similar kind of mathematical curves. This was the deaths in the US just through March when we were on a pure exponential curve.
The linear has this very distinctive curve to it. And this is just through March. And since then we've definitely started to flatten the curve. That is good news.
But you can see the log scale on the right is basically a straight line. And every line, every kind of hash mark on the log scale is tenfold, 10 times the previous level. So it moves much quicker than you realize.
I mean, in the linear, you can see for weeks there's nothing. There's very few. And then all of a sudden we're at 5,000, and today I think we're 25,000 deaths. It's an unbelievable scale.
And I think that the countries that we've seen that have had previous experience with how fast something like this moves have kind of seen and acknowledged this exponential curve like South Korea and Japan and to some extent China, they locked down much faster, right? Singapore as well, and they're still struggling. They're kind of locking down again when they let people out. But South Korea and the U.S. had the first case on the same day. And they've had a fraction of the cases and deaths that we have.
So some of this is just understanding how fast things are moving. And of course there's this parallel. There is a parallel to climate and to sustainability issues. Emissions have been rising, carbon emissions have been rising at an exponential level since the Industrial Revolution. The report I mentioned earlier on the 1.5 degrees of warming,
that report was in large part about the difference between 1.5 and two degrees warming. And the fact that it's not linear. That two degrees is not one-third worse than 1.5, and three degrees is not 50% worse than two degrees.
It's not linear. It gets worse much, much quicker. And we're seeing this chain of emissions go up exponentially, the amount of carbon dioxide in the atmosphere goes up exponentially and then impacts the extreme weather, the effects on the planet. We're seeing the effects in many ways, not just climate but that the pressure on the natural world, fairly exponential losses of species, the rise of ocean plastics. And this chart on the right is interesting because it shows an exponential curve up to today and then some choices. How are we going to handle going forward? If we keep going the way we're going, we're going to go up exponentially.
We can flatten the curve if the change the way we make things, change the way trash is handled. So these exponential curves are just part of what drives the sustainability agenda. Land use, this chart's over a couple thousand years but you can see from 1500 to today, absolutely exponential and that's driven in part by things like meat.
And this drives a rise in fertilizer, nitrogen, which then runs off and can damage aquatic environments. These are all growing at amazing pace. And a lot of it obviously stems from just more and more people getting wealthier.
So the ultimate exponential curve over a couple centuries has been people. I remember when I was in school as a kid, and I we hit I think five billion people. My dad's talked about three billion. We're coming on to eight and we're probably heading to nine or 10.
But this chart also shows something kind of interesting and amazing, which is there are positive exponential curves. In here is the number of people living in extreme poverty and that has come down in just a generation or two exponentially. That has been an incredible success story.
So we also have to be ready and prepared for, and take advantage of the good exponential curves. And that includes the clean economy. The other big theme for today's talk, which is solar and wind, the cost to build new energy according to an analysis by the bank Lazard, every year they go and ask companies that build energy, what does it cost to build? And it's gone down basically exponentially in solar and similarly in wind. And so you see this tremendous reductions. And it's why last year the numbers came out recently about 72% of the new energy put on the grid globally was solar and wind. That's been true for a few years.
Arguably, the battle between fossil fuels and renewables is over on the grid. It is just cheaper to build solar and wind. And we're heading to a place in the next few years where the cost of building solar and wind will be cheaper than operating existing coal and nuclear plants on the grid. It will be cheaper to shut down existing plants and build the new ones.
So this downward sweep is kind of exponential reduction in the price of renewables has led to kind of an obvious exponential shift in buying renewables. This is just corporate purchases over the last nine, 10 years. This is not utilities.
This is companies buying their own. And the line is the cumulative amount, which, what does it look like? It looks pretty exponential. What's going to happen this year? Obviously, we're not Gging to see the same growth. I'm sure there was some amount of commitments already made, but, again, there's going to be sectors where buying renewables is not going to be their primary focus.
So getting to understand exponential requires, I think, one really important idea, which is perhaps the most compelling to me lately and the parallels between COVID and climate, which is that we have to listen to experts. Please listen to experts. They know stuff. They've studied this.
And epidemiologists have gotten themselves steeped in exponential curves and understanding why when there's one case or two cases that it might be two weeks too late to stop it completely and it's already building. This is what they know. And climate scientists have been worrying and worrying for 40 plus years. They've been saying it's coming. The effects are going to build quickly. And now because we couldn't see the exponential or ignored it, we've locked in some very bad outcomes to be blunt.
The world is heading towards, I think, 1.5 degrees at the very least. Two degrees is almost locked in frankly. And at that level, over the next generation, 30, 40 years, we're going to see like some cities become inhabitable.
So there's another sad parallel between, I think, COVID and climate, which is grief and loss. And I think in the climate and sustainability community we need to kind of accept that that there is things to grieve about. We're going to lose places that we've enjoyed living. We're going to lose tons of species, some ways of life. And there's grief in all of this. Part of this understanding of what scientists are telling us and the exponential changes is understanding that especially with exponential change, you run up against boundaries quicker and at a sudden pace.
And we have boundaries. There is only so much planet. There's only so much clean air.
There's only so much clean water. There's only so much stable climate. And we are seeing kind of declines of coral bleaching, which, again, is speeding up. And in the next generation most of the coral will die. And this is part of what we have to understand.
Arctic ice declining exponentially. Insects, bees, frogs, we're seeing tremendous change and not in a good way. And these all connects also to the current situation. We are bumping up against planetary boundaries. And we are quite literally, according to Stanford researchers, bumping up against apes as we cut down forests.
Those are the animals closest to us genetically. But obviously, this is how you get to these wet markets with bats and pangolins. And there's a connection between eight billion people not having enough to live on and people eating what they can and it leading to these diseases. So we're right up against nature. Using it as we see fit.
Literally eating it. And this is coming back to haunt us. And the climate-disease connection is very real. Another Stanford study article said, "What a warming planet means for mosquito-borne diseases." We're going see more and more of the world be open to things like malaria. And they said in this article that temperature controls several of the factors that affect the transmission of the virus, of malaria.
And they said all these traits rely on temperature but they tend to be non-linear. So there it is again. The changes happen very quickly. Fourth, I think, in a very profound way, I hope that we will believe and understand how connected we are.
And again we've been in this historic populous swing of every person for themselves. And there's still a remarkably strong strain of it in the US, even with what's going on. But we are very much connected. This is an image from a couple of years ago. What was at the time the busiest day in air-travel history. It was something like 200,000 flights in one day.
No wonder the virus went to every country in the world within weeks. We are physically connected as infrastructure, but we are also connected in very personal ways, right? And we rely on so many others to help us. Right now we are relying on the people working in checkout rolls in supermarkets, the drivers, the truck drivers, the people keeping our water systems and power going, the garbage collectors.
And someone on Twitter, and I wish I could remember who it was to cite them was saying, "All these people and jobs that we weren't sure "were worth $15 an hour, "that were debating these minimum wages, "our very lives depend on them right now." And I hope we will get this. And get that we are fundamentally one immune system. We're only as strong as our weakest immune system. And it really is all connected.
Our environment provides the pillars of our society. And the people are the other pillar. So we're connected deeply and in a tactical kind of business sense, I think this means we have to rethink in particular supply chains. There's a lot of discussion about this right now. And rethink what it means to be resilient as a people and as a business. It turns out, for example, that one of the biggest manufacturers of masks is in the Wuhan area of China.
And one of the big manufacturers of swabs that we're out of, and it's one of the reasons we can't test enough in this country, is in the Lombardy region of Italy, one of the hardest hit regions. It's directly impacting the supplies we need for this challenge. We're waking up to the fact that there's this long chain of people in logistics that get stuff to us. And it's incredible shock to the system, I think in the U.S., for people to see empty shelves. I thought for years that it's hard to tell people that we're reaching climate and resource limits when they can walk into a Costco and see limitless stuff.
But we're seeing something we've never seen before. On some level we've seen some of these supply chain pressures before. In 2011, due to extreme weather climate-driven extreme weather in Thailand, there were huge floods. And it flooded a region where there are factories that made parks for hard drives and cars. And it was the only place they made those parks.
So it is really time to rethink resilience. We need to diversity in our supply chains like in nature, and that may mean a mix of local and distant duplication of sources. And this is hard, this is against this core kind of shareholder capitalism belief of cutting, cutting, cutting, making everything more efficient. It's incredibly efficient to make everything in one place at the biggest scale.
But we need to challenge that and acknowledge that business fundamentally owns and is responsible for its whole value chain. This is one of the big shifts in what it means to be a business. Sixth, I think we have some very big choices to make.
I saw a viral article going around talking about this great pause that we're in. Trillions are being thrown at the economy. We're going to invest and build for the future. Are we going to choose the cleaner, more resilient economy and something more resilient for human health? Like a cleaner air leads to fewer respiratory problems. Less pollution is better for us. The clean economy is the answer to so many of our biggest problems.
Climate, health and well-being, jobs. And we're seeing that EU is talking about moving to the green deal with all the trillions going into this. And this means fundamentally, companies need to get off the sidelines on policy to help think big. This is, I think, one of the biggest failings in companies in recent years is on the climate front is to stop being afraid of, I don't know, getting a bad tweet about your company and get out there and push for pro-climate policies. We needed that in the last couple of months. When were companies pushing for a real much quicker shutdown that would have led to probably lessen economic damage.
Or now there's estimates or ideas coming around from Nobel economist Paul Rome was saying, we need to build a testing infrastructure that can test every person in the country every two weeks. Companies need to be pushing for this kind of policy. And so are we going to choose the cleaner path, the more substantial structured path to tackle this problem and are we going to choose a path that deals within equality and really ask why have some populations died at higher rates. Why are some populations always hardest hit by climate also? Why are there gaps in healthcare coverage in the US? And how come we not right now have a deeper conversation about a much better safety net and insurance for all? So finally, I think when in doubt, I think we should be focusing on people.
It's the only answer I can think of to this situation is to start from people, not from market numbers or the GDP, but impacts on real people. And I don't mean to say that this vast economic tragedy that's coming is not going to affect people, it will. But we should be thinking in those terms, not in the Dow. And I mean, to be literal about it, people are the economy. 70% of the GDP is consumption. All of us buying things.
Your spending is my income and vice versa. Companies have been doing well by their people in some places in the last couple of months, not as well in others. So take care of employees.
And if you think with these people lens, I think that should steel business leaders to, again, get off the sidelines, be courageous, and risk that nasty tweet. Think about what people around you, your peers, your employees, your own kids need in this moment. And we're seeing even, again, the financial times the most financially-oriented organization saying, hey, maybe we need to rethink some things and put on the table of basic income, wealth taxes. These are things that seemed radical just a couple of months ago.
And so finally, I guess the question that MIT SMR had asked me to write about a month ago, was this a black swan or is it the new normal? I said it was both, which is probably not accurate. I got a lot of grief online about the definition of a black swan, but it's kind of semantics right now. I just don't think there's a normal anymore. I mean climate, a clean economy, new generations, the pressure they're putting on business, they were already making normal not normal. That we were already needing to rethink everything about business and the social contract to survive climate change.
We already knew that business had the lead and push governments to be better. So we not need a more human centric approach to business. I think if we don't, we will continue to face moral economic health and physical threats and crises unless everyone, all eight billion of us have access to what they need for basic well-being.
No one thrives unless everyone thrives. [Paul] Thank you. Andrew, I'm going to give you a second to join me on video. This has been a really great presentation.
And frankly, not all that, not always easy to listen to, but really important. Not surprisingly, your presentation has generated a wealth, an onslaught of questions from the audience. And so thank you all. We're going to get to as many as we can.
And you can continue to ask questions using the Questions module on the GoToWebinar control panel. So, Andrew, we're going to begin close to where you left off. Given that the world condition we're experiencing both to health crisis and the assumed recession and given the slow unpredictable path out of it is going to dominate the agendas of government, to policy makers, of business leaders for the next 12 to 24 months, maybe more. What's the risk that other critically important issues are going to fall by the wayside like investment in clean tech and sustainability more broadly? [Andrew] How can it not be a risk, right? I mean, we have to address the immediate pressure. And we're in an unprecedented moment, right? Where the priority has to be for all the other reason. I mean, look, we are not going to get back to addressing climate at the pace we need to if we don't get back to making that a priority because we've tackled to it the best extent we can the most pressing priority, right? And we've been in the cycle of discussion the last couple of months as if it's economy versus acting on the human health when they're together, right? The quicker we lock this down, the quicker we build the infrastructure, the better for the economy and then the better chance we can include or get back to the priorities we have to work on.
I think it's great to see that some countries are talking about, okay, if we're going to put trillions out there, how do we use that to drive a greener economy? And I think we miss those opportunities 12 years ago in the '08, '09 recession. I remember in the U.S. we bailed out a lot of companies and including I, I think, 50 billion dollars to GM.
And at the time, I wrote about this, I thought, instead of just giving them cash, what if we say we're going to buy 40,000 volts. It was very early in the EV time. What if we're going use that money to incentivize building the cleaner economy we need? That needs to happen now. But again, right now, we need help for people, right? Instead of frankly a bunch of bailouts for the airlines and the cruise lines, which are needed, and just $1,200 in the US going to people, which is not going take them very far. We need, like their countries have done, to guarantee 70, 80% of people's salaries right now and keep people afloat, keep small businesses afloat for now and then we can get back to these other priorities. But this is going to be a long hall.
Everything I read, and look, I'm not a scientist or an epidemiologist, everything I read says until we get to massive testing and some form of antivirals and vaccine, we're going maybe be in and out of shutdowns. So we'd better figure out how to do that and keep other priorities going as well. It's going be very challenging. [Paul] Beyond the admiral bulk, excuse me, admirable actions, and you cited a few of a number of organizations, retooling their plans to address critical needs, do the broader actions of business so far during the pandemic really suggest that the multi-stakeholder view has taken hold? I mean, the rush to layoffs has been pretty breathtaking.
[Andrew] Look, I am always, I'm a business guy and I work on business sustainability. So to the purist who thinks capitalism has got deeply flawed attributes, which I agree. Maybe I'm a sellout, I'm pro-business. But I'm also very happy to be very critical of business.
And so normally I would say they need to put society first, people first, but this is really tough time. There are sectors and companies that, like I said, have lost 90% of their business. I don't know what they can do but just try to survive. And I don't see how they can survive without furloughing and taking people off the books.
That said, I just saw a stat today, I think, in the UK about a quarter of the largest companies there, the CEO has reduced their pay, just a quarter. I mean, there's more they could be doing obviously to share the pain. And I think, look, the S&P 500, I believe, has trillions of dollars literally on the books. They've been saving cash since '08, '09. There's a lot of money out there.
Now is the time to step up. Wealth accrued to the very top over the last 10, 20 years very aggressively. Now is the time for them to put up and help, yes, redistribute. Help the people that need help. And so I don't think we've seen companies adopting that level of thinking. They have converted some of their production, which is great and critical.
But there's still been at times this sense of, well, how much are you paying me for than just like, a lot of the conversations that need to wait a little bit. Like, just get the things out there. There's no greater tragedy than we haven't produced enough protective equipment for our doctors and nurses.
That's just a travesty and embarrassing. So just get the stuff out there and then worry about where the money's going to come from. But like I said, there are sectors where this is existential threat, right? And I don't know how much we can ask them to do beyond try to stay alive. But they can help their people, I think, by communicating clearly, by maybe doing part time work, try to keep people on the books to some extent even if they're paying them less. There's pathways here that people are pursuing.
And I think we're going to have to be innovative about this. How do we keep people from losing their job entirely so there's some income and keep them around for if there is some bounce back and we have to get back out there? There are no easy answers. [Paul] If we believe that systemic problems, Large-scale systemic problems require a large-scale systemic responses, who owns gigatrends? I mean, where does the bucks stop in terms of managing them? Where's the G20 right now? [Andrew] Yeah, look, I think there's been probably not the kind of collaboration that there has been. I've seen a few articles and folks like colleague Paul Polman, former Unilever CEO, has written bunch of op-eds lately saying, where is the G20? He works with the UN very closely and says, "We need much more collaboration that we've had."
And that's one of the big skill sets of a multi-stakeholder model is we need companies to think more systemically. I think as I said a lot in my comments, this event is forcing us to think more systemically. But we're not that good at it still. I mean, companies are building that skillset, that muscle of working across pure groups working with the government, working with customers, working with suppliers. It's rare to see a really great partnership of all those players.
It's happened. And you can see it work on some issues. There's been some climate stuff over the years that has been effective.
But this is really difficult. And I think we need to, again, it goes back to questioning the shareholder capital as a model, the dog-eat-dog, every man for himself. That just isn't functional. That isn't fit-for-purpose anymore with the shared challenges we have and how connected we are. So companies have to develop this skill of systemic change. All while finding the ways they can compete and challenge themselves and attract, customers attract employees, but not compete on the things that bring us all down.
And this is a challenge; where do you draw the lines? But I think we better err on the side of sharing everything right now. You know, opensource on anything. I think we're seeing that scientifically, we're seeing that I think in the biotech community probably in a way that I've, if I understand it's historic, the pace that we've done, some of the testing has never happened before, if you believe Dr. Fauci, which I think we do. So there is some collaboration scientifically maybe like we've never seen and that will be one of the, I think the great stories coming out of this.
[Paul] Can you help us further understand the relationship between a global health crisis and the global climate crisis? Are they physically related or concurrent or maybe coconditional? [Andrew] I mean, as I said, there's tremendous overlap in the style of the problem and the issues of listening to scientists. But, I mean, the climate crisis is a health crisis, right, that's the thing. I mean, the climate crisis isn't just about the polar bears, isn't just about humans; it is the health, the entire health of the planet. We are shifting the global temperature. And I think the best metaphor that I've always heard on this is to think of climate change like a fever for the planet.
So a degree or two, you get a degree or two fever, you feel it, it doesn't feel good; three or four degrees, you're really bad; five degrees, you're in the hospital. It's similar. And so the health of the planet is at risk and it is clearly shifting where species can survive, it's bleaching all the coral, like this is the health of the planet, and clearly that ties to our health.
We cannot survive without all of these pillars of the natural world, including species we don't think about that much, right? I mean, I've seen talks about if the ants disappear, we don't make it. Like, they're dealing with the soil, they're providing so many services and there's many species like that. So we can't keep knocking down these pillars and climate change is accelerating that knockdown of the support structure and not see it affect our health. But there's the really direct stuff like the air pollution, right? A clean economy means less air pollution, getting away from coal and oil means less air pollution. And you're seeing it right now. There's been estimates that in China maybe tens of thousands or over 100,000 people have not died prematurely because of the improvement in air quality.
Now we do not want to get there this way, I don't think there should be any crowing in the environmental community about, "Look how clean the air is," but it shows us what the world could be, it shows us if we take that path in a smart way with the right kinds of investments and move there aggressively, with the price on carbon and other policies, what the world could be like, how much healthier we could be. [Paul] So with respect to predicting a pandemic, there are certainly some prominent voices that have warned that such an event wasn't only possible but likely. [Andrew] Yeah. [Paul] Yeah, leaders didn't listen. And it's evocative of people, perhaps some present company on the other side of the screen from me and many others, who have warned of the impending climate crisis for decades and leaders did not listen.
Is there a reason to hope that leaders will begin listening now? [Andrew] I guess it depends on which leaders, right? I mean, there's, there are leaders that listen and have been listening. There are others that, it's built into their brand or their political kind of policy, structure in their lives that they can't or they won't. I guess, I think until this happened really in the last six, 12, 18 months we have seen a really deep shift I believe in business getting it in the financial role, getting it, in most countries getting it. Look, there's only one country that said they don't want to be part of the Paris climate accord, everybody else is still in, right? There's been political commitment, it's not fast enough, it's not aggressive enough but there is commitment and getting that we have a serious problem now. I mean, part of the thing is we're no longer talking about like future models on climate; it's here now, right? The Australian fires, the floods, the hurricanes, that's part of the reason that this becomes so much more part of the agenda and part of the political agenda. It's a top issue in polls of voters in the U.S..
It's increasingly one of the top issues because it's here now. So on some level, it's moot. Are we going to listen to the warnings? I think there's still pushback on how bad it could get.
People think it's alarmist. I think, if you look at the book last year from David Wallace "The Uninhabitable Earth," that said let's actually look at what scientists think would happen at three, four, five degrees warming. On some level, we've underplayed how bad it could be. Scientists are very kind of clinical, right? And they say, "It's very likely that we will see this," which means it's going to happen, right? I mean, they use these phrases.
And I think we still need to listen to how, how fast we have to go, how disruptive the change really needs to be to the core infrastructure, to the fossil fuel infrastructure, to our food system; it's going to need disruption. So will they listen? I don't know. I think we're going to need the Gen Zs and people putting pressure on their politicians. And frankly, they need to go out and vote and we need people in power all over the world who think this is a crisis and want to put policies in place that act on it.
And that requires voting and getting out there and, in some countries, changing those in power. [Paul] Given the power of the populous, of the crowd, right, to enact the change that it wants, you have people in L.A., New York, New Delhi, Shanghai they're seeing blue skies, right, they're enjoying is maybe not quite the right word, but it's an experience many of them are hardly accustomed to. That can be a pretty powerful incentive.
I mean, does that give you hope? [Andrew] Yeah, I mean, look, I think one of the failings, if there is one of the sustainability community or whatever you want to call it, has been painting a picture, right? I mean, I just said there's dire warnings, that's part of the story, but we probably haven't been as good at painting a picture of what the world could look like. And we're getting a taste of it now. It's kind of, again this is not the way you want to get there, through this kind of suffering and loss. But to see what a city could look like, I just saw actually an article, some stats, surveying people on their interest in electric vehicles and it has jumped for this reason. They're like, "Oh, the air is better." I get that.
And a significant percentage have said they're more interested now in getting an EV in the next few years, not in 10 years or 15 years. So maybe that's a good sign. Again I hope this helps us paint a picture of what it could be if we move away from fossil fuels, if we build cities that are more livable. I mean, there've been cities shutting down the driving 'cause nobody's driving right now, more biking, more walking just a better way of life and I think we're getting a taste of it in a weird way. With a huge caveat, this is for the people who have the privilege of being able to ride this out and have again the support of the people that have to do the work now, that we can sit back and think about, "Is this cleaner? Is this better?" There's so many people just in pure struggle mode that again I don't want to be excited about, "Oh, look how peaceful it is," when there's people truly suffering.
So I think we can come back to this later when we get out of the depth of this, and say, "Look what it could've been," and, "Let's build a world that gets there." [Paul] How much privacy do we need to be prepared to give up in order to, at the very least, in order to battle our way back from the pandemic? [Andrew] Yeah, I mean, look, I'm just going by what I'm reading, and I think we're all reading the same thing, it's just from what the doctors are saying. Look, the U.S. in particular after 9/11 the country was apparently willing to give up quite a bit of privacy, right, a lot of laws passed that said the government can look at our phone records, I mean there are lots of things going on. So we tend to give up privacy when we're threatened.
This is a real threat, right? This is something that there's no cure for that is incredibly, it passes from people to people very, very quickly, the death rate is much higher than the flu, it's an ugly disease. So it's worth being scared about. I think we have to do this very carefully. Unfortunately, there was talk of breaking up the big tech companies and I was kind of in support of a lot of that and now they're going get even bigger and stronger really because they're going to need to track us.
And I don't, I haven't read anything that says we have much choice. I mean, how else, until there's a vaccine, do we have some normalcy, unless we track in some giant countrywide database who's already got it, who's got the antibodies, where everyone who's had it recently has been in touch with and where they've been. I just don't know how else we do it. I would love to see someone's suggestion on how we keep privacy and manage this when it's an unsolved very dangerous illness that there is no solution to yet.
So I don't know how else we do it. But I haven't seen a lot of, I mean, remember when Snowden and all these people came out with, "Look how much little privacy we all have?" In the U.S. at least, there was a collective shrug. I mean, people didn't seem to really care that much. So I'm not sure there's Going to be that much pushback, and that's scary too. We could enter a place where the government and a few companies know even more about us.
They already know more than people realize, right, that they're going to know where we are at all times by name, not just anonymous. I haven't seen anybody say there's another way. [Paul] Thank you. Beyond privacy, we're also becoming reliant on a smaller and smaller number of companies for our survival, for lack of a better word, right? [Andrew] Yeah. [Paul] How do we,
hey, I'm not sure exactly what the question is here, but I think I'm looking for your observations with respect to on the one hand saying thank you to the Amazons of the world, right, for keeping me fed and connected during this horrifying time, without kind of just ceding our ability to survive to three or four companies. [Anrew] Yeah. Again I think there was legitimate pressure coming on these companies to split them up. I think there's still some reason for that in some cases. But, yeah, they're just getting, they're getting more and more powerful, right? I mean, I think if there was, if there was anything that could've accelerated even faster the death of some retail and the movement of more and more volume of the economy into like Amazon's hands, you couldn't have designed anything better.
I mean, we all know that there's going to be some retailers, probably some big names that just don't come out of this. And that's sad because there's some diversity of where you can buy stuff. You know, I'd like to buy less from Amazon, frankly. I don't think they've always been a good actor.
They pay taxes for years. I mean, there's lots of things that Bezos has fought, they've come around on climate in the last six, 12 months, mainly from their own employees pushing, that's again one of the big forces on companies, is their employees. That's been incredible to watch. But they're going to get more and more power. And I think you're seeing some amount of movement to self-reliance, people wanting their own gardens, trying to do more on your own and be able to fix stuff around the house, try to be able to have less reliance.
But it's really difficult, right? I mean, not all of us are very handy and we rely on so much around us. Again, I think we can thank Amazon, but we should really be thanking their employees and really pushing those companies to make sure their employees are safe, right? I mean, I've seen stories of people that just work in supermarkets, young people who have died from this, because they've been out on the frontlines while we're home. We have to do what we can.
And if that means all of us walking around with masks for six to 12 months, that's what we have to do, right? That's the right solution. It's not just thinking Amazon, but the hundreds of thousands of people working for Amazon and make sure Amazon's treating them well and keeping them safe. [Paul] So we have a few minutes left and I want to kind of pivot the conversation toward some kind of final thoughts.
So I have three questions. And folks in the audience, well, I've done my best to kind of sympathize themes that I've seen apparently in your questions. So if you're not hearing the exact words you've said, I hope you're seeing your interest being addressed. So the first, we're going have three most important thing questions. What is the most important thing I can do in April of 2020 as an individual to protect the future? [Andrew] Well, the most immediate thing is to stay home and stay safe, I don't see any other thing. What I'm worried about, frankly, is there's a pressure to get the economy going, again as if that's different from slowing this pandemic.
And the weather's getting nicer, we're getting cooped up, I'm very nervous that we get into May and people just start going out again because they're tired of being at home and it's beautiful out and we have to be tougher than that, right? I mean, I've joked about this but it's not really a joke, that World War II you send off a huge chunk of the generation of men, women had to fill in in factories, people are doing war bonds, we've been asked to sit and be at home at a time where we can basically pull up any song that's ever been written and thousands of movies and TV shows, it's really not that hard for the people that can ride this out to just stay home. The other thing, though, is to start to think about the political change that's needed. And we may not be able to go out, knock on doors this summer and fall, but this election has to change. I'm not being very, I think, transparent about what I'm saying, but I think we need change.
And so people have to think about what can they do to help people locally, can they support food banks and what can they do politically at the national and local level this year and stay home. [Paul] So let's move to the organizational level and we'll make the timeline, the rest of 2020. What is the most important thing my organization can do to protect the future before the end of this calendar year? [Andrew] Yeah, I guess it's just a version of what I just said. I think companies have to figure out how to support their people to do what we just said, which is to keep them safe, I mean, think about how much of recalibration there will have to be in so many businesses, what do your workplaces need to look like if you want people to come back in for people to stay six feet or so apart while we're working through this, what does a movie theater need to look like, what does a supermarket? Now you're seeing tape marks and things for getting in line. I think we probably have to do more of that. And so companies should be thinking about how do we make our business fit for this moment and help people continue to stay home, I think remote work is going to continue to be important, right, that's a way to keep the volume of people down that are traveling, that are in the subways, that are in the workspace.
So I think the important thing over the coming months is to really think about how do we do our job and our business in this environment, and that means like changing the physical space we work in, changing how we think about our employees and what they need. There's been so much more demand on people at home. If their kids are young, they need homeschooling all of a sudden, right? I mean, there's just been pressure. And so companies I think have to think about how they can help their employees deal with these pressures and these very different modes of working and being. And much more flexible about I think what work means. And again I think, as I said before, companies need to get off the political sidelines and push the governments to do what's needed.
[Paul] And so that brings us to the kind of the third part of this question. And as individuals and organizations, for those of us who live in societies where we are in a position to demand things of our government, what is it that we need to demand of our government? [Andrew] Look, I'm, again not an epidemiologist, I'm going by what I read, demand a vast increase in testing capacity. Some organization at the federal level, so we're not, I mean, the states in the U.S. competing against each other for materials is just unbelievable. So a vast increase in testing.
Not accepting at all that healthcare workers have to bring garbage bags in. Like, that is, that has to stop and we have to demand that there's production that it picks up even faster. And that we keep the kinds of inventory we need of these things in place for when this possibly happens again. History tells us the Spanish flu, it was the second wave that was even bigger. We may face something like that. So we can't get into this situation again where hospitals are completely overwhelmed.
So I think we demand that the people that need protection are protected, we demand that the testing gets ramped up, and I think we demand that there's much more coordinated response and much more honesty about what we're going to be facing together. [Paul] Andrew, thank you. We’re going to make those your final words. I wish this conversation could go on longer.
But that is all the time we have for today's presentation. [Andrew] Thank you. [Paul] Audience, thank you very much for joining us. Over the next several days, please look for a survey we'll be sending out.
We would greatly appreciate your feedback. We invite you to join us for the next webinar in our spring series. Please join MIT Sloan research scientist Kristine Dery and me on Wednesday, April 29th, for Iterating With Remote Work. And we also invite you to register now on the MIT SMR website for a special virtual symposium being held next Tuesday, April 21st, Disruption 2020, which features some of the world's top experts in disruptive innovation, discussing what disruptions will look like in the coming decade.
This concludes our program. Thank you for attending. Thank you, Andrew.
This was really terrific and important. And thanks again to our sponsor Slack. We hope you'll join us again. [Andrew] Thank you.