INSIGHT by Peter Giger, Group Chief Risk Officer, Zurich Insurance Group. This article was first published by the World Economic Forum.
〉COVID-19 disrupted healthcare delivery, which could increase future morbidity and mortality.
〉A focus on rebuilding economies could distract governments from climate action.
〉The pandemic has, however, got us to reassess our priorities.
| COVID-19 has unquestionably delivered one of the biggest shocks to our planet in generations. The global health crisis is fast turning into an economic crisis that is likely to have major societal and geopolitical repercussions for years to come.
Unsurprisingly, the “spread of infectious diseases” has jumped up 28 places to be ranked second in the World Economic Forum’s 2020 Risks for Doing Business annual survey of 13,000 business leaders in 130 markets.
Unemployment, one of COVID-19’s most visible and immediate economic consequences, is number 1 after being ranked fourth in 2019. But there is something that poses an even more subtle menace than the virus itself: distraction.
We run the risk of diverting our attention exclusively toward COVID-19 issues and losing ground on other major strategic, long-term risks. These may include nuclear proliferation, refugee migration, poverty, cyber security, biodiversity loss and, of course, climate change.
| ‘Distraction effect’ disrupts healthcare delivery
We first witnessed COVID-19’s “distraction effect” on the unprecedented disruption to healthcare delivery that could increase future morbidity and mortality.
Healthcare institutions had to redesign their services to release capacity for treating patients with COVID-19. This included discharging patients early to free up beds, canceling appointments, and postponing planned treatment.
In many countries, for instance, cancer screening was suspended, routine diagnostic work and treatment deferred, and some clinical trials halted with future funding now in question. No wonder some people fear we’ve created a “cancer timebomb”.
This impact could be worse on developing countries where malaria, tuberculous and AIDS are a greater threat to populations than COVID-19. This is illustrated by the fact that global deaths from COVID-19, which recently passed 1 million, would not be high enough for it to feature on the World Health Organization’s latest list of top 10 causes of death.
| Climate change: loss of public and political attention?
There’s an even more concerning fallout from COVID-19’s “distraction effect”: global warming. While everyone welcomed the short-term respite from spiralling emissions, the pandemic’s long-term impact on climate change could be negative.
As governments, businesses and individuals focus on rebuilding shattered economies, balance sheets, or simply paying the rent, the green agenda could become a “nice to have”. We could see a shortfall of investment in climate action and a loss of both public and political attention on the environment.
If it were not for the virus, the devastating wildfires we’ve witnessed over the past year in the Amazon, Australia, Indonesia and the US, just to name some examples, would arguably have made global warming a more central topic. As would the COP26 climate talks in Glasgow in November 2020 – had they not been postponed a year due to COVID-19.
Acting on climate change remains as urgent as ever. It is still our biggest existential threat. But once again, no environmental risks appear in the top 10 Risks for Doing Business.
It is also important not to forget that risks are international and interdependent. These range from supply chain vulnerability to cyber security and inter-state conflict.
| A “great reflection”?
But there is hope. COVID-19’s “great distraction” could become a “great reflection”. The pandemic has put a spotlight on some big issues and has got us to reassess our priorities.
It has revealed many underlying inequalities that the global community and national governments have been discussing for years – now, we could see action.
There is more focus on youth unemployment. Concern over a lost generation and the resulting social upheaval it could cause has pushed governments into action. More emphasis is being placed on mental illness due to the consequences of a prolonged period of social distancing.
We have also witnessed a great global technological leap. The crisis forced late adopters of digitalization, virtual working and e-commerce to catch up overnight, which could mean greater access to information and knowledge, as well as productivity gains.
COVID-19 may be a short to medium-term distraction, but its long-term legacy could be positive. This is possible if the pandemic’s devastating effects finally increase our alertness to other risks with similar or even worse outcomes. Then, this offers hope that we may finally see decisive and impactful action taken to combat climate change.
| The views expressed in this article are those of the author alone and not the World Economic Forum.
| All opinions expressed are those of the author. investESG.eu is an independent and neutral platform dedicated to generating debate around ESG investing topics.