Defining ‘a new normal’
“A new normal” is an increasingly common phrase precipitated by the Covid-19 pandemic, The Lens has observed.
Inherently unsustainable governance and business practices over a sustained period of time has been considered as business as usual for decades, but investors now recognise that the balance needs to be reset. For stewards of vast amounts of capital, this means addressing ESG issues, including corporate culture such as employee treatment and relationships with suppliers to deliver tangible change.
The global public health crisis has exposed poor supply chain practices in a number of industries as well-known brands make headline news in this regard. Fashion is a microcosm for unsustainable ESG practices that are patently endemic in the industry and its extensive supply chain.
“All the world’s a stage”, Shakespeare once wrote. Covid-19 has been the global stage upon which unsustainable actions have been exposed.
This includes corporate culture, such as employee treatment and relationships with suppliers – all key ESG considerations for investors. Often, a supplier’s entire production capacity can be taken up by one brand, but there is no notice for dropping them, which leaves the supplier – and its employees – in a precarious position.
Diligent supply chain management comes down to auditing, payment to suppliers and workers and treatment of the labour force. It’s clear that sustainability must be front and centre of the new normal.