Impact Blog
Coronavirus and the impacts of working remotely

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      By Brendan McCarthyESG Research Analyst, Calvert Research and Management and Allison ShenoyESG Research Analyst, Calvert Research and Management

      Washington - As countries enforce social distancing to slow the spread of COVID-19, many employers are undertaking a collective experiment in allowing most or all of their employees to work remotely. Prior to the pandemic, approximately 1 in 3 Americans worked from home, according to BLS statistics, with the highest percentage in the tech sector (more than half of information workers) and the lowest in services (just 1 in 20). It can be much harder for workers in public-facing roles to continue to perform essential job functions remotely. But for companies with the optionality to maintain productivity remotely, the current situation has the potential to accelerate remote-working trends, which can enhance employee work-life balance and reduce carbon emissions associated with commuting.

      The shift to remote work can also have long-term ESG implications from adapting to different labor management practices to managing remote connectivity and data security:

      On human capital development

      Companies that depend on skilled labor should embrace remote working as a viable tool to attract and retain the most talented employees. Remote working can appeal to a more diverse pool of candidates that are not geographically limited or restricted by traditional working styles. It can help employers retain employees by giving them flexibility that might otherwise cause them to leave. By attracting and retaining these skilled employees, firms can outcompete their competitors, growing and generating stronger returns.

      On data security

      Some companies are finding that among employees theoretically allowed to work from home, some are not able to because of existing security measures -- for example, if certain systems are only accessible onsite. Policies may need to be adjusted and technology companies continue to enhance data security when employees are remote. It will likely mean more than just designing new software. COVID-19 has been mentioned as being the impetus for an uptick in cyber breaches and it is critical companies have the right measures in place to defend against cybersecurity threats.

      VMWare, whose software products enable remote work, is focusing its efforts during the current public health crisis on supporting customers as they respond, adapt and eventually shift to longer-term business continuity planning. The company has published information on pandemic preparedness and response that emphasizes "zero trust security" and has published best practices on the critical capabilities for digital workspace security. With so many companies relying on its products to maintain productivity, this stress test is an opportunity for VMWare to take on a leading role in building a future with more remote, secure workspaces.

      On climate change

      The widespread adoption of remote working in the face of the coronavirus is good preparation for climate change impact - the situation has been compared to an invisible extreme weather event, where home is the safest place to be. As climate change causes acute impacts like flooding and wildfires with increasing frequency, companies will rely more heavily on remote working as a contingency plan should their office building and/or surrounding infrastructure be impacted. Current coronavirus reactions are an early real-world run of these contingency plans.

      A large-scale shift to remote working may temporarily substantially reduce carbon emissions from road transportation - according to IEA data, about 44% of global transportation-related carbon emissions stem from passenger road vehicles. In the US, over 80% of travel to and from work is made in a personal vehicle, accounting for roughly 18% of annual vehicle miles traveled per household.1 If companies can maintain productivity, efficiency and data security, remote work is likely to increase in some industries, which could extend carbon emissions benefits. Companies ultimately aiming to reduce scope 3 carbon emissions can encourage remote work and reduce business-related travel. A reduction over this period in carbon emissions from commuting could, however, be partially offset by higher road freight volumes as e-commerce demand rises.

      Bottom line: If managed responsibly, the ability to shift more employees to remote work can have a positive impact on a company's brand value through turbulent times and help to attract and retain workers over the long term, which leads to less operational disruption and improved financial outlook in times of market stress.