Post-pandemic world, episode three

The changing role of business post pandemic

Climate activist Lord Mark-Malloch Brown shares his views alongside philanthropist investor David Rubeinstein and impact investing advocate Aunnie Patton-Power.

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Read the transcript on the changing role of business post pandemic

  • Introduction

    N: A time-traveller from last year from last year might be forgiven for thinking they’d stumbled onto the set of a dystopian science fiction movie. And for good reason: not since the last world war has a single event altered our way of life so dramatically in such a short space of time.


    From the onset of the Covid-19 crisis, Investec Focus has been documenting this seminal moment in a series of discussions with experts in a broad range of disciplines, all of which you can listen to in full in previous episodes of Investec Focus Radio.


    In this series, we shine the spotlight on a specific question that runs through these discussions: will this surreal detour in human history lead to lasting changes in the way we live and work, how we think about money, or even the dynamics of global trade and the political economy?

  • Fani Titi: "We have to be inclusive in terms of capitalism and growth"

    FT: I think that the moment has come where business leaders, from banks to leaders of large corporations to large multinationals, have come to accept that we have to be inclusive in terms of capitalism and growth, that the health of our workers, the health of our communities is really important as we go forward.


    N: That was Fani Titi, CEO of Investec, addressing a United Nations summit in mid-June.


    Clearly, we’ve come a long way since the laissez-faire capitalism of the 1980s, championed by economists like Milton Friedman, who argued that a business’s only obligation is to maximise shareholder returns.


    As issues like climate change and social inequality assume ever greater urgency, corporations have been compelled to account for the societal and environmental impact of their actions. But it’s arguably only in the past few years that these concerns have begun to extend beyond the marketing and CSR departments to the desk of the CEO, as businesses come to realise that doing good is not a perk of doing well, but rather a prerequisite to long-term survival.


    The Covid-19 pandemic has accelerated this trend, exposing the fault lines in society and illustrating just how far we still have to go in forging an inclusive, sustainable future for generations to come.


    In this third episode of our series on preparing for a post-pandemic world, we consider whether the crisis will serve as an inflection point in the way businesses perceive their role; as actors in society and inhabitants of a fragile planet.

  • David Rubenstein: "We have what I call the Covid crater"

    DR: In the United States we've had about 30 million people out of work so that's produced a very economic challenging situation. 


    N: While none of us has been unscathed by the economic impact of the pandemic, it’s the most vulnerable that have been hardest hit, even in some of the wealthiest societies. Bloomberg TV host, philanthropist and legendary investor David Rubenstein noted that we can expect to see deepening inequality as digital acceleration leaves behind those lacking in technological skills or access.


    DR: Income inequality in the United States is as bad as it's been since 1920's when we had the Great Depression, but it's getting worse than even that now.


    We have what I call the Covid crater: those people that don't have technology resources, don't have access to the internet or work in jobs that just are not going to be essential going forward; they are going to lose their jobs or they're not going to be able to work as effectively as people like you and I can and as a result they are going to be more likely to have greater income inequality and further lack of social mobility than they ever did before, so it's not a pleasant situation.

  • Fani Titi: "Business leaders need to be unequivocal about fighting for equality"

    N: Recent events have also drawn the world’s attention to the persistence of racial inequality, seen at its ugliest in the murder of George Floyd in Minneapolis in May.


    As the son of a black farm labourer in Apartheid South Africa, Investec CEO Fani Titi is no stranger to racism. And he believes that business can lead the charge in combatting it.


    FT: It is really important for business leaders to be unequivocal about the moral imperative of fighting for equality.


    N: At the UN Global Compact Leaders’ Summit, held in mid-June this year, Titi likened the present moment to the one that changed the course of South Africa’s history and set it on the path to democracy.


    FT: Forty-four years ago in South Africa, we had what we call the Soweto protests or the Soweto riots where young people stood up against a system of oppression called Apartheid. It was a fundamental revolt against discrimination and in 1994, that action, with other actions of course that had been taken, led to the dawn of democracy in South Africa.


    So this moment can be that moment on racism for the world, for leaders specifically to commit to make a fundamental change not just change because you have people in the streets, but really a fundamental commitment to do things differently and to make a significant contribution around racism.

  • Lord Mark Malloch-Brown: "There will be a very different post-Covid business environment"

    N: But can business really play a role in alleviating age-old and seemingly intractable social ills? This question topped the agenda at this year’s World Economic Forum, which took place in Davos in February, just before Covid-19 was declared a pandemic. And the answer from business leaders was a resounding yes.


    A term used extensively at Davos was “stakeholder capitalism”: a reorientation of corporations to serve the interests not just of shareholders but the communities in which they operate, and indeed the planet itself.


    Lord Mark Malloch-Brown is a former vice chair of the World Economic Forum and also sits on the board of Investec. During a Focus Talk earlier this month he told us that the momentum evident at Davos – particularly on climate action – has only accelerated in the wake of the pandemic.


    MMB: We’ve seen a moment where not just the demand in society for change, but increasingly the demand of regulators, the focus on a Covid recovery which has got a lot of green incentives in it; all of these things are aligning to make for a very different post-Covid business environment, one where climate change and the policies we adopt to address it is going to be more upfront than we’ve ever seen before.


    N: Lord Malloch-Brown also served as a minister in the British cabinet under Gordon Brown, as Vice President of the World Bank and as deputy UN Secretary General under Kofi Annan. In this last role he was instrumental in defining and driving the Millennium Development Goals, the precursor to the United Nations Sustainable Development Goals, or SDGs, which were adopted by UN member states in 2015. These 17 interconnected goals seek by 2030 to address global challenges, including poverty, inequality and the degradation of the environment.

  • Fani Titi: "You need a level of collaboration across many stakeholders"

    N: Fani Titi is one of the CEOs on the Global Investors for Sustainable Development alliance, which has been tasked by UN Secretary-General, Antonio Guterres, with finding ways to finance the inclusive, low-carbon and climate-resilient future envisioned in the SDGs. The ask is around $2.5 trillion over the next decade: an eye-watering sum, but not unachievable, says Titi, if a broad range of stakeholders are committed to working together.


    FT: As the Secretary General of the United Nations likes to say: to attack the biggest problems in the world, you need a level of collaboration across many stakeholders. You need governments for instance to be urgent in their policy formation.


    If you get policy makers, you get the financial players like banks, insurance companies, asset managers and you have developers co-operating. I think that collaboration will lead to much more progress and of course you also do need civil society to be active.

  • Disclaimer

    Focus and its related content is for informational purposes only. The opinions featured on the site are not to be considered as the opinions of Investec and do not constitute financial or other advice. The information presented is subject to completion, revision, verification and amendment.