Our society, economy and politics are facing unprecedented challenges. The reason: a virus called Corona. At the same time, it is accelerating a change towards more digitalisation and sustainability. How the Corona virus challenges companies and how WeSustain can support them by providing new solutions.
Covid-19, Sars-CoV-2 or Corona. Three terms that refer to one and the same virus that has thrown the world community into an exceptional and unprecedented situation since this spring. From the tragic loss of human lives, social distancing and the wearing of masks in public to the shutdown of entire economic sectors (car industry, tourism, etc.), the virus has turned our society and economy upside down and changed it irrevocably. In view of the high loss of human lives caused by Corona, it is almost presumptuous that one would want to take something positive out of the crisis. But it is human to look for something positive in crisis in order to accept the suffering and all the changes. And so, many entrepreneurs ask themselves: What changes or developments do I want to positively carry forward in the future for my company from this crisis? What new challenges has Corona brought to my company? This special is also intended to show which of these new challenges can be met by companies using WeSustain solutions?
From the existential crisis, to standing machines, up to ghost offices
Every company is affected and challenged by Corona in one form or another. Reports about large corporations (e.g. Lufthansa) and entire industries (restauration and tourism), which fear for their existence, are accumulating. Bankruptcies and insolvencies become a mass phenomenon. Only through the emergency aid packages that politicians have put together in short-term, the economic collapse is avoided, at both national and European level. But even today, in some companies, both operations and machinery are at a standstill, despite easing measures.
Companies that were able to keep their operations going during the crisis, for their part, are looking into ghost offices. Only occasionally do employees return from their home offices – wherever possible – to their offices. Empty desks, quiet corridors and small meetings with distance regulations or video conferences characterise the image of offices and everyday business life. But the Corona virus has not only changed everyday business life, it has also brought about completely new operational challenges: from a different form of collaboration, increasing digitisation, new requirements for supply chain, compliance and risk management – i.e. extended operator responsibilities – to new financial communication challenges for companies. While WeSustain, as a software provider for responsible business management, is also challenged by Corona, the exchange with customers has intensified in these special times. Because all of them are looking for solutions to master the new and operational challenges.
Digital and analogue: See? There you go!
In theory, in the age of digitisation, every company should have gotten used to analogue and digital collaboration. In practice, until recently the opposite was still a living reality: the possibility of working from home offices or meeting with customers or partners via teleconferencing was either avoided or scarcely available in many companies up until 2020. The assumption that home office employees were actually productive was simply too small. And even business trips to customers or partners became a must, if not a status symbol for personal or business success.
Corona has now proven that digital collaboration in companies works perfectly from a home office. Entire workforces were sent home because of the risk of infection and equipped with the appropriate hardware and software. Ignoring the loss of liquidity caused by a collapsed order situation or the domestic challenge of childcare, non-producing companies in particular were able to continue working as before. So even WeSustain as a software developer without a physical production is challenged by the new situation, WeSustain is still able to work effectively. Crucial factor for this: From the very beginning WeSustain has been focusing on digital work processes and decentralized structures for teamwork and can therefore – even in times of Corona – keep up business and software development from the home office.
The lawmakers have made their necessary contribution to accelerate this change in working together: For example, management boards, supervisory boards or shareholders’ meetings may now take place online and will continue to do so in the future. This is a change and a new mindset on effective collaboration in companies that will shape the working world of today and tomorrow: Instead of mistrust and control, trust and ownership will gain acceptance in corporate culture. Definitely a positive effect of the crisis.
The sleeping giant has finally woken up
The Corona crisis is having another effect: it has given an immense boost to digitisation in companies and made what was previously thought impossible possible in a very short time. All of a sudden, companies and administrations have extensively digitized their work processes, because if they didn’t, they would no longer be able to operate. Here are a few examples from industries that are now implementing digital solutions that were previously much discussed and in some cases criticized:
- the healthcare sector, which is making use of telemedicine and digital consultation hours
- universities, which are transforming entire university curricula into online lectures
- the real estate industry, which uses online viewings and digital tools to match property and tenants/buyers1
- politics with perhaps the most prominent example in form of the Corona App
The crisis has resolved perceived obstacles to more digitalisation in companies and thus paved the way for change. At the same time, it has shown and made transparent where the German economy has failed to take action in terms of digitisation. Germany has an acute need to catch up, especially in the area of IT security, as the incident in North Rhine-Westphalia in connection with the allocation of emergency aid funds has shown. ” At present it can be seen that those who were already very far along in digitisation were least restricted by Corona and quickly found their way into a new way of working. No matter whether home office, digital schools or digital administrations: Wherever the digital transformation was already far advanced, one could seamlessly enter a new mode. Digital companies, such as online retailers, currently have the least problems,” emphasizes Christopher Meinecke, a known digitisation expert and head of the “Digital Transformation” department at the German Association for Information Science, Telecommunications and New Media. (Bitkom) in Berlin. Manfred Heil, CEO at WeSustain, agrees: “Not only since Corona we know that a professionalisation of operational processes is mainly digital and collaborative. This applies to sustainability, ESG, compliance and audit management as well as to all other corporate areas. That’s why we develop software solutions that establish digital structures in companies and offer employees a collaborative platform to work on joint projects”.
Some other leading experts, just as before Meinecke, see the danger that this development towards more digitisation could remain a one-time effect and that the willingness to invest in consistent digitisation could be weakened by the costs of the crisis. They therefore call for the new momentum in digitisation activities to be consistently carried into the future.2
Glocalisation as a new principle
In addition to digital experts, leading futurologists are looking above all at global value chains and the supply chain management of companies. Again, the “Corona” magnifying glass reveals a weak point: Global supply chains are fragile and carry the risk of collapse in case of supply bottlenecks or complete delivery failures. The call for “glocalisation” – i.e. globalisation with stronger local and regional components – is therefore becoming louder and louder. The aim for European countries, for example, should be to manufacture and stock their products primarily within the EU in order to shorten transport distances and save emissions on the one hand and reduce their dependency on entirely globally organized and outsourced supply chains on the other. Again, digitisation and new technologies as well as software solutions play a special role: “Supply chain management in particular is complex and brings with it particular challenges in terms of consistent data and its transparency. With the help of our WeSustain software, we support companies in systematically identifying and managing sustainability risks along the supply chain, which have now become increasingly important due to the crisis,” says Manfred Heil.
Corona therefore reinforces the call for a digital transformation in order to connect decentralized and local processes with global processes in a way that creates meaning and value. One example of how this can be achieved is additive manufacturing, which already today makes digital development but local production of products possible. However, not only digitisation but also the promotion of circular economy plays a central role in the context of “glocalisation”. Only if resources are reintroduced into the value chain in a closed-loop system, companies will be able to emancipate themselves from global supply chains in the future.1
New territory: non-financial risks and extended operator responsibilities
In times of the corona pandemic, risk and compliance managers in companies are once again called upon. They are the ones who are currently performing numerous additional tasks (e.g. business continuity management or publishing ad hoc reports) and making a vital contribution to limiting the damage to companies. In this context, Corona has above all identified new risks which only allow for a limited use of proven control instruments. This is because they are mainly caused by “non-financial risks”. Examples for this kind of risks are reputational risks, IT system failures (cybercrime) and IT security risks or sustainability and/or ESG risks. Risk and compliance management in times of Corona is therefore new territory for many.2
In addition to securing the financial existence, especially the compliance departments of companies are currently busy ensuring complete legal conformity with new country-specific and authority measures – especially with regard to the Infection Protection Act. After all, these measures entail a number of sanctioning risks: for example, the risk of paying horrendous fines if the company violates the order to close the operating site, to name just one example. The particular challenge lies above all in keeping oneself constantly informed about the rapidly changing administrative regulations –some of which are issued in urgent proceedings – and in implementing them adequately in order to guarantee legal compliance for the company.3 A reliable software solution such as WeSustain’s “Enterprise Compliance Management” (ECM) solution can be a valuable support in this context. Among other things, relevant legal cadasters are always updated and users are immediately informed about the update so that compliance managers can respond quickly and legally compliant.
Experts agree that the professional handling of the Corona pandemic lies within the operator responsibilities of companies. After all, it no longer only includes the responsible operating of technical systems and the legally compliant operation of buildings, but also the employer’s duty of care for their employees in the form of health and safety measures (keyword: HSE or EHS). However, it is still being discussed what the outsourcing of responsibilities away from the private individual (employee) to a private enterprise level (company) means for operator responsibilities and legal compliance outside such exceptional events such as the corona pandemic.4
Sustainability paves its way into investor relations
The Corona crisis has also given a boost to corporate financial communication, especially with regard to sustainability. Even though the topic of “Green Finance” or “Sustainable Finance” is still new territory for many investor relations departments, it is now right at the top of the agenda due to upcoming regulations, but also due to the corona crisis. The call on the capital market is becoming louder and louder to bring the sustainability department, which is primarily responsible for the management and communication of non-financial aspects (ESG) of the company, closer to the investor relations department. In the future, digital data management and reporting processes, such as the ESG solution or the “Enterprise Sustainability Management” (ESM) solution from WeSustain, will become vital for these departments: “We are working closely with stakeholders from the financial market, who give us concrete indications as to which new challenges for financial communication digitized processes can simplify,” reports Dr. Manfred Heil from WeSustain.
Last but not least, the financial recovery packages at both national and European level have established the importance of sustainable transformation. The rebuilding of Europe after Corona – among other measures through the “Green Deal” – is a historic opportunity for many to push climate protection and consistently reduce investments in “dirty” investments. This time, the central concern shall be to direct the money to a large extent not again, as after the financial crisis in 2008, to climate-damaging sectors, but above all towards the decarbonisation of the economy. This will give companies that focus on sustainable business strategies and integrated and transparent non-financial reporting through their investor relations a clear competitive advantage in the market of the future.
And what is left in the end?
The Corona crisis changed a world of things: People, whole societies, but also politics and economies. The way we interact with each other in our private lives as well as in our professional lives has changed. The exceptional and unprecedented situation triggered by a virus has clearly accelerated processes of change towards more digitisation and sustainability, and has made the previously impossible possible. But whether companies will carry these changes or developments forward into the future has to be seen and depends on the solutions they have at their disposal. “We are convinced that if companies now combine digitisation and sustainability initiatives, e.g. through our IT platforms, the reciprocal effect between digitisation and sustainability can be made efficient and meaningful,” says WeSustain CEO, Manfred Heil. The hope therefore prevails that even after the acute pandemic, companies will continue to proactively shape the “new normal” in the sense of a sustainable and digital transformation. The global community now has the once unique opportunity to choose a new path.