https://www.ft.com/content/6d75fd96-5d71-11ea-b0ab-339c2307bcd4
Will Coronavirus Recession Kill Green Craze That Has Infected Board Rooms In Recent Years?
By Andrew Edgecliffe-Johnson, Financial Times, 5 March 2020
When choosing between addressing a long-term environmental concerns and more imminent economic upheavals, many companies will shelve the less pressing demand.
How stakeholder-friendly will companies feel in a falling market? The corporate consensus has shifted remarkably quickly to the idea that executives must manage for the long-term benefit of employees, consumers, suppliers and the planet — rather than focus only on meeting investor expectations for the next quarter.
Yet this rebuke to the old doctrine of shareholder-primacy has come during a long bull market. Record profits have made it easier for chief executives to think magnanimously about constituents who have no power to oust them if they miss forecasts.
The coronavirus outbreak offers a stark reminder that such benign conditions will not last. As stock prices whipsaw and global supply chains seize up, capitalism’s
recent conversion faces its biggest test.
Central banks have moved quickly to cushion the economic impact of the outbreak, and most CEOs still hope that their profits will rebound. But the coming weeks will be fraught with unfamiliar risks for companies that have come to define themselves by their socially responsible credentials.
This heavily marketed support for a new way of doing business has raised expectations among staff and customers to a point that many of the belt-tightening moves that executives have deployed in past crises could do lasting brand damage.
A sustained downturn would also leave them with tougher choices than in previous reversals.
