The COVID-19 crisis impact on sustainability


We find ourselves in a period of unprecedented crisis that has driven massive changes in our lifestyles. But like any crisis, society’s response brings with it the opportunity for positive change.

The former US President John F. Kennedy used to point to the Chinese character for ‘crisis’ which is composed of two brush strokes. One stroke stands for danger; the other for opportunity.


We need to be highly attentive to the danger that the COVID-19 crisis represents. This applies both in our personal and civic lives but also of course in our professional lives and our investment portfolios.

At the same time, we need to be alert to the new opportunities that the disruption has created. The world’s response to COVID-19 has created space for a new way of operating and has shifted people’s perception of what is valuable and what works.


Healthcare, having borne the brunt of the crisis, has been most obviously changed by it.

The crisis has swept away a lot of the dogma that has bedeviled the US approach to healthcare. The need for an urgent response has accelerated the deployment of a wide range of new technologies to cope with the threat. Telehealth and telemedicine, using remote clinical observation and tracking of patient health has exploded. In some US health practices, virtual care has increased by 20 or even 30 times. For this to become the new norm, regulatory change would be required. This clearly is not a given, but changes to key regulations to make telemedicine a core feature of US healthcare are already under way[1].


Our conversations with the companies we invest in also indicate that other healthcare innovations that have been held in the wings of the US healthcare system have now moved centre stage. For example, the use of predictive analytics in population health management tools that enable healthcare officials to more accurately locate and support vulnerable populations of the elderly or chronically ill. Similarly, the value of Group Purchasing Organisations (GPOs) in securing, as well as coordinating, the provision of key supplies across health networks has become abundantly clear.


The healthcare sector is most obviously changed by COVID-19, but other sectors will also be massively altered, in our view.

Air travel had been growing at between 5-7% every year since 2009 and had been anticipated to achieve similar levels of growth for the foreseeable future[2]. This is clearly now not going to happen. Even after lock-down has ended, restrictions on international travel are likely to remain for several months if not years. Anecdotally, it seems very few of are likely to prioritize international travel after lock-down ends. This position has been confirmed further by research studies undertaken abroad[3]. The CEO of Lufthansa believes that business travel in particular is likely to be forever changed. Technologies that have been used during lock-down will mean it will be many years or even decades before this market recovers[4].

Across the economy as a whole, we expect attitudes to supply-chains to also be fundamentally changed. Already challenged by trade tensions between the US and China, extended global supply-chains relying on just-in-time deliveries are likely to fall further out of favour, in our view. The vulnerability of business models that are based on these supply-chains was most marked in food retail, but has also been laid bare in the challenges of sourcing ventilators, personal protective equipment (PPE) and other healthcare equipment.


Some of these changes we think help advance sustainability in our economies. Better use of technology will help to reduce inefficiencies and boost positive healthcare outcomes. A bigger focus on ‘resilience’ in supply-chains will also be of value in a world where climatic impacts are more severe and more disruptive. Other changes, such as increased use of online retail, are likely to present a more mixed picture with some positive impacts and some negative impacts.

The short-term impacts on the renewables sector, like many others, will be damaging. We think, however, that the appropriate analogy for the sector is the internet at the time of the stock market collapse in 2000. There will of course be corporate bankruptcies and supply-chain failures, but innovation will keep happening and the economics are only getting more compelling for renewables – and for electric vehicles[5].

We believe though that there is also cause for optimism in more deep-rooted change in how individuals and governments see their roles. Perhaps the most profound shift during the crisis has been how individuals have accepted the need for self-sacrifice. For sure, the motivation has been for our own personal safety and for the welfare of our close family members. But a big part is also driven by the desire to protect others. The mantra to “Stay home – save lives” captures this sentiment well and has been wholeheartedly embraced. There are clear parallels, we believe, with the personal and collective action that is also needed to address climate change.


The other candidate for the most significant change would surely be the expanded role of governments. This is true both in the unprecedented levels of fiscal support that Central Banks have made available to their economies, but also in the draconian levels of control that have been exerted over their populations. Having discovered and applied these powers, what is to stop governments from feeling as bold when tackling future threats? This might be viewed positively in counteracting climate change or might equally summon a more dystopian scenario in which civil rights and personal freedoms are compromised.

Several governments including many European and Asian countries have indicated that any recovery package will lean heavily towards support for green technologies. But others, most notably the US, has so far overlooked the need to decarbonize. These responses are still being crafted and there is still plenty of scope for change.

Either way, it is clear that Governments will have an even bigger role in the future as they try and marshal an economic recovery. This comes at a decisive time in our response to climate change. The next two years were already seen as the critical period in which to accelerate the shift to a zero-carbon economy. The COVID-19 pandemic further underlines this.

WHEB Asset management aim to advance sustainability and create prosperity through positive impact investment.

WHEB manage the Pengana WHEB Sustainable Impact Fund.

We recently hosted a webinar discussing the above topics in further detail. The webinar can be found HERE



[3] Jefferies research note April 2020


[5] See for example

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