Environmental management is a core management and financial issue. on the order of 8 to 10 percent—create more value. to be a core skill—one that current systems, mostly In the coronavirus era, the case for change makes designed for a different era, aren’t very good at. itself. In other areas, companies can use this sense of urgency to change the way they put together their budgets. Sales teams, for example, are used to 5. From making trade-offs to getting new targets based on the prior year’s results. embedding sustainability A better approach is to define the possible, based on metrics such as market size, current market Stop thinking of environmental management as share, sales-force size, and how competitive the a compliance issue market is. On that basis, a company can estimate Environmental management is a core management sales potential and budget accordingly. and financial issue. Lloyds Bank, the British insurer, estimated that sea-level rises in New York increased In previous economic transitions, infrastructure insured losses from Hurricane Sandy in 2012 by 30 meant things such as roads and pipelines. In percent; a different study found that the number democratic societies, governments generally drew of British properties at risk of significant flooding up the plans and established safety and other could double by 2035. Ignore these and similar regulations, and the private sector did the actual warnings—about cyclones or extreme heat, for building. Something similar needs to happen now, example—and watch your insurance bills rise, as in two areas. One is the irresistible rise of digital they did in Canada after wildfires in 2016. Investors technologies. Those without access to reliable are noticing too. In Larry Fink’s most recent letter to broadband are being left out of a sizable and CEOS, the BlackRock CEO put it bluntly: “Climate surging segment of the economy; there is a clear risk is investment risk.”5 He noted that investors case for creating a robust, universal broadband are asking how they should modify their portfolios infrastructure. to incorporate climate risk and are reassessing risk and asset values on that basis. The second has to do with the workforce. In 2017, the McKinsey Global Institute estimated that as Start considering environmental strategy as a much as a third of workplace activities could be source of resilience and competitive advantage automated by 2030. To avoid social upheaval—more The COVID-19 pandemic froze supply chains around high-wage jobs but fewer middle-class ones— the world, including shutting down much of the displaced workers need to be retrained so that United States’ meat production. Rising climate they can find and succeed in the new jobs that will hazards could lead to similar shocks to global supply emerge. The needs, then, are for more midcareer chains and food security. In some parts of Brazil, the job training and more effective on-the-job training. usual two-crop growing season may eventually only For workers, as well as businesses, agility is going yield a single crop. 5 Larry Fink, “A fundamental reshaping of finance,” BlackRock, January 2020, blackrock.com. From thinking about the next normal to making it work: What to stop, start, and accelerate 89