We assess the potential for a more sustainable recovery from the latest global crisis.

  • After the global financial crisis, quantitative easing (QE – central-bank asset purchases) led to an economic recovery, but governments broadly missed the chance to encourage funding for environmental and social issues.
  • As we seek to recover from the global pandemic, the European Union’s Green Recovery Plan and initiatives such as that pledged by the city of Amsterdam give us some optimism that this recovery may be more focused on sustainability.
  • The United Nations Sustainable Development Goals (SDGs) provide a framework for how a renewed focus on environmental and social issues might make the latest recovery a broader, more equitable and more sustainable one.


Will the Covid-19 coronavirus crisis profoundly change the way we tackle social and environmental challenges? The answer to that will depend on our ability to learn from the mistakes made following the global financial crisis a decade ago. As the world recovered from that crisis, a reliance solely on market forces and cheap borrowing only compounded the challenges for many; the chance for a more inclusive economic recovery that recognised the long-term benefits of tackling pressing social and environmental issues was largely missed.

Missed opportunity

While the arrival of quantitative easing (QE) – the introduction of new money into the supply via bond buying by central banks – in 2008 led to an economic recovery, governments broadly missed the opportunity to place incentives in the system that would encourage a flow of capital to areas of need rather than merely to bolster corporate profits – often at the expense of social and environmental challenges.

Today, as we start to slowly emerge from the global pandemic, the European Union’s (EU) planned Green Recovery Plan will provide a stimulus package focused on renovation, clean mobility, hydrogen and renewable energy. While we still await full details of the plan, it shows an ambition by some governments to use the crisis to accelerate the energy transition to a lower-carbon world and to recognise the importance of shared social resources such as hospitals, schools, social housing and public transport.

Embracing ‘doughnut economics’

The city of Amsterdam also represents a sign of optimism that more inclusive, cleaner growth can be placed at the centre of the recovery from the economic and social pain caused by the Covid-19 pandemic. The city is officially embracing the sustainable development framework created by the Oxford economist, Kate Raworth, which has become known as ‘doughnut economics’.[1] Amsterdam is aiming to emerge from the crisis by balancing the needs of people without harming the environment: an ambitious commitment – and something of an experiment – but precisely the sort of new thinking we believe is needed if we are to prevent ourselves from merely reinforcing the broken paradigms of the past.

Sustainable development goals

A central part of Raworth’s doughnut economic model is the inclusion of the United Nations (UN) Sustainable Development Goals (SDGs) for 2030. These are an ambitious set of objectives created to deliver shared prosperity for all and to safeguard the wellbeing of the planet through their focus on unmet needs.

The goals were first launched in 2015 with the ambition of eliminating global poverty. The 17 SDGs were ostensibly designed for governments to work in partnership with broader civil society to improve health and education, to reduce inequality, and to spur inclusive economic growth, while also tackling climate change and preserving the health of our biosphere. They represent a truly ambitious set of universal objectives, to which 193 countries have signed up.

High cost

Looking at the SDGs through the lens of the Covid-19 crisis reinforces the potentially powerful role they can play in delivering an economic recovery with enduring benefits for the wellbeing of people and the planet. Yet the scale of the expenditure needed to deliver on the goals runs to trillions of dollars.

For many, the original cost was seen as an uneconomic burden that countries could ill afford, at a time when they were still suffering from years of austerity following the global financial crisis. For the optimists, the scale of the opportunity was seen in a different light: achieving the overarching goal of eliminating global poverty and securing the health of the planet would provide larger and more resilient markets in a way that social and environmental activists, alongside investors and companies, could agree upon. In our view, the very human cost of the Covid-19 crisis illustrates vividly that achieving these objectives represents an alternative vision of recovery to the free market’s ‘winner takes all’ mentality of the last 40 years.

Meeting future needs

As we look at the scale of the stimulus packages put in place to haul the battered global economy out of its slump, the size of the funding for meeting the ambitions of the UN’s SDGs suddenly seems far more achievable. As we flirt with near-universal negative interest rates, enlightened authorities have been granted an opportunity to embrace sustainable development as the cornerstone of a broader economic recovery at the lowest financing cost on record.

Aspirations such as no poverty (SDG1), good health and wellbeing (SDG3), decent work and economic growth (SDG8), sustainable cities (SDG11), and responsible consumption and production (SDG12), are all central planks of a strong, vibrant economic system that is fit to meet our future needs, and is resilient to the inevitable shocks that will assail us periodically. We believe that any civil society that aspires to peace, justice and strong institutions (SDG16), should automatically aspire to deliver an economic plan that embraces these goals.

History has delivered to us severe economic conditions that became social crises before. The Great Depression of the 1930s and the recovery from the devastation of the Second World War required coordinated action between nations and between civil society and corporations. At his commencement speech at Oglethorpe University in May 1932, in the depths of the Great Depression, US President Franklin D. Roosevelt made a rousing speech that marked the beginning of his ‘New Deal’ plan. There was a line in that speech that presaged the importance of the SDGs and the central importance of sustainable development in tackling a slump: “…to inject life into our ailing economic order, we cannot make it endure for long unless we can bring about a wiser, more equitable distribution of the national income.”

Importance of engagement

Thinking on sustainability is not new: the seminal Brundtland Report, published in 1987,[2] remains the benchmark for a peer-reviewed, science-based approach to delivering a sound economy based on the principles reflected almost three decades later in the UN SDGs. Increasingly, the term ‘stakeholder capitalism’ is being touted as the successor to the shareholder-centric model that grew out of the economic malaise of the 1970s. If we are to achieve this transition, governments, regulators and corporations need to fully embrace the opportunity represented by Brundtland’s definition of sustainability: “…development that satisfies the needs of the present without compromising the capacity of future generations, guaranteeing the balance between economic growth, care for the environment and social wellbeing.”

The Covid-19 crisis is a very human experience. It has dislocated the lives of hundreds of millions of people across every continent. The pandemic has exposed a fragility in many health systems – even in the prosperous developed economies – that has undermined the health and future wellbeing of many (SDG3), and is likely to leave scars for years to come.

While investors cannot easily address the failings of individual health-care systems, they can influence better outcomes for all countries by actively engaging with companies to recognise the benefits of supporting the wellbeing of their workforce. For many workers, the absence of a societal or corporate safety net for health care has come at considerable personal expense, especially for the low-paid.

A sustainable recovery?

The lens of sustainable development, and even the UN SDGs, is ultimately about good capitalism: it is about deploying capital to areas that tackle the under-served needs of global society – a call option on future prosperity – hence identifying secular areas of growth.

With tens of millions of people likely to lose their jobs, their livelihoods and potentially their wellbeing as a result of the pandemic, we collectively need to support a recovery that is intolerant of poverty (SDG1) and one that is backed by a vision that sustainability is a view of a possible future that brings multiple benefits for society and the world in which we dwell. To achieve this vision requires civil society to value the aspirations enshrined in the 17 SDGs and to recognise the shared benefits now and for future generations of such an approach.

Working in partnership (SDG17) will be central to this outcome if we are to ensure that a better future for the many is delivered. In our view, the SDGs, along with environmental, social and governance (ESG) considerations, are not a label of convenience to signal virtue; they are aspirations for the future that require action now.

It is not certain that the future path we follow as societies will follow these lines, as there is a tendency for free-riding and self-interest to become the default in times of economic stress. Yet there are signs of hope that a better way of managing our future destiny is emerging that just requires us to try to cut loose from the anchors of past behaviour.

These opinions should not be construed as investment or other advice and are subject to change. This material is for information purposes only. This is not investment research or a research recommendation for regulatory purposes. Any reference to a specific security, country or sector should not be construed as a recommendation to buy or sell investments in those securities, countries or sectors.


[1] World Economic Forum, 19 May 2020 (https://www.weforum.org/agenda/2020/05/doughnut-model-amsterdam-coronavirus-recovery/)

[2] https://www.britannica.com/topic/Brundtland-Report

These opinions should not be construed as investment or other advice and are subject to change. This material is for information purposes only. This is not investment research or a research recommendation for regulatory purposes. Any reference to a specific security, country or sector should not be construed as a recommendation to buy or sell investments in those securities, countries or sectors.