Penn State Smeal panel explores pandemic's effects on sustainability, business

UNIVERSITY PARK, Pa. — Just as 2020 was shaping up to be a watershed year for global sustainability efforts, the coronavirus pandemic shut down the world economy.

The Penn State Smeal College of Business Center for the Business of Sustainability (CBoS) recently hosted the first in a series of virtual fireside discussions titled “The Impact of Coronavirus on Sustainability and Social Impact” to explore how that momentum has been altered.

CBoS Director Erik Foley assembled a blue-ribbon panel to go beyond the headlines and gave participants the opportunity to hear directly from several experts in sustainability, social impact and impact investing about how COVID-19 is changing the business landscape, and possibly forever altering how we think about people, our planet, and profit.

More than 180 participants engaged in conversations with Wayne Balta, vice president of corporate environmental affairs and product safety for IBM, Josh Helke, founder and CEO of Organic Climbing, and Andy Kaufman, chief investment officer of Community Capital Management (CCM).

“One of the core principles of sustainability strategy,” Foley explained, “is that companies can leverage their unique capabilities to benefit society. Each of our speakers provided examples of this from IBM’s Molecular Explorer, to Organic Climbing’s pivot to sew masks, to CCM’s investments in affordable housing.”

Helke said profits have taken a backseat as companies have pivoted during the pandemic.

“It's a lot of thinking outside the box,” said Helke. “What you can offer the world? This isn't currently about making money. It's about what can you do to help make the world a better place.”

The discussion touched on the role that finance can help play in addressing this crisis.

“We know low income communities and communities of color are most disproportionately negatively impacted by economic shocks or natural disasters,” Foley said. "The same has been true of the coronavirus pandemic. We wanted to explore how impact investing might play a larger role in providing much needed access to capital for the most vulnerable.”

Impact investing is a way that companies try to help traditionally overlooked groups or areas.

"Impact investing helps direct capital to where it needed most,” Kaufman said. “At CCM, for example, you can choose a geographical area or impact theme and capital is deployed according to that mandate. We can target down to the county-level in order to invest in affordable housing to ensure those units don’t go under and that the individuals can refinance to lower rates."

In addition to sharing specific tactics, the panelists all shared concerns on how we traditionally measure economic and business progress.

“It is worth remembering,” Foley said, “that prior to the coronavirus, the U.S. was enjoying an 11-year bull market and unemployment was 3.5%. And yet we heard from this panel that this progress had a hidden economic and ecological cost.”

Helke elaborated on that point.

“We were walking down a dangerous path,” Helke said, “unaware of the dangers and instead we were picking up speed. No one seemed to be thinking, ‘What do we do when this trail gets rough?’”

The panelists’ insights suggest we ourselves as a society are the ones making the trail rough. Kaufman pointed out the increase in corporate debt since 2008 was profitable but fragile. Balta observed that conservation is becoming increasingly urgent since it is human’s degradation and fragmentation of ecosystems that has increased the spillover of infectious diseases, like the novel coronavirus, from animals to people.

“This is the third such virus in the 21st century,” Balta reminded the audience.

All three speakers converged on a core idea: business decisions need support from an updated, more sophisticated set of tools, one that optimizes for the environment, for economic stability, and for profitability over the long-term.

And a final key theme was integration.

“Andy Kaufman likes to say that one day impact investing will just be investing and you can see how his firm has intelligently integrated impact into its investments which still yield market-rate returns,” Foley said. “And Helke’s businesses have woven sustainability, quite literally, into their products from solar powered facilities to excellent worker pay and benefits. And Balta said it all when he shared IBM’s secret for its unwavering focus on the environment.”

Balta’s final thought brought the conversation full circle.

“If you have integrated sustainability into what the line units do day in and day out, you can sustain sustainability,” he said. “If it’s been genuinely integrated into the fabric of the business, it’s here to stay.”

The next virtual fireside discussion is May 27 and will feature Karen Quintos, executive vice president and chief customer officer at Dell, and Jean Oelwang, chief executive officer of Virgin Unite. Participants are asked to register online.

All of the fireside discussions can be accessed at this link.