May 21, 2020

Guest Post by Jeremy Oppenheim

This post is cross-posted with permission from the author.

This post is part of Smart Prosperity Institute’s Smart Stimulus Project and supports the work of the Task Force for a Resilient Recovery. Want to receive our latest analysis and insights? Sign up for our monthly updates here.


Our world – how we live, work and play – is going through accelerated change as COVID shifts tectonic plates along social, economic, political, technological, and moral fault-lines. There is no going back to the pre-COVID world. And we are a long way from a ‘new normal’.

One message is already loud and clear: it makes no sense to target reviving a high- risk, fragile economy on a dying planet. But there is every point in seizing the moment to build a future that is peace-loving, innovative, open to possibility and anchored in deeper, more caring relationships with each other and the natural world. To build this future, we need design principles that turn the COVID shock into far better choices for:

  1. The resilience of our societies
  2. The regeneration of our economies
  3. Personal renewal and growth

These principles are available today. None are new, but they have all resurfaced through the COVID looking glass, which has held up and magnified both the deep strengths and the character flaws of our society (as well as of ourselves as individuals). We need decent, ambitious leaders to translate these design principles into sound policies, wise investments, and better jobs. We need to wrestle with the deep challenge of reforming both markets and states to put them firmly in service of society. But even more, we need a radically open, outwardly spiralling movement of people, young and old, to own, improve and evolve the principles, turning them into action through our collective choices.


The Resilience of our Societies

COVID has again taught us a harsh lesson about the basics of resilience.

The good news is that, so far, we have done better than feared in terms of human lives lost. No one can be indifferent to more than 300,000 deaths, and we face a multi-year public health challenge. Many of the most vulnerable regions are still highly exposed.1 For example, in Indonesia there is a risk that haze from peatland fires will severely aggravate the impact of the pandemic over the summer.2 We have yet to fully see how the first wave will unfold in Latin America, Sub-Saharan Africa or South Asia.

But the mortality results to date are well below mid-case scenarios forecast just a month or two ago, due largely (and in some cases belatedly) to governments and citizens taking the advice of public health scientists seriously and learning to cope with social distancing regimes. Some combination of messaging around the risk to personal health, to the health of others, and to the viability of national health systems appears to have worked.

The bad news is that we are now, arguably, entering a more dangerous, complex phase of the COVID response as countries wrestle with how best to balance the economic, social and health costs of the crisis. Understandably, there are growing pressures to reopen the economy in most countries as the social and economic costs of a blanket lockdown are perceived to be higher than the epidemiological risks of opening up. And it is precisely at this time when societies will demonstrate how well they have internalised five key design principles of resilience:


1. Treasuring our hidden reserves. More resilient societies are the result of many intangible factors: from a shared experience of hard times and vulnerability, to a deeper sense of kinship and community, to a stronger sense of connection with nature.3 It is these hidden reserves that underpin trust and make some societies not only better equipped to handle the experience of lockdown (with fewer rules) but also endowed with stronger intuition around norms to open up responsibly. These are the deep assets which are essential to weather storms, but which are under constant siege. Right now, environmental regulations are getting relaxed or going unenforced in many countries on the basis that we cannot afford these during the crisis.4 But now is precisely the moment when we need to invest more, not less, in nature as a source of mental well-being, as a key to climate security and as a way of lowering pandemic risk.5  What choices would we make about investing in nature or the invisible social glue that holds communities together if we were building back for – and indeed from – a more resilient future?


2. Science-based risk recognition. Will nations have the wisdom to treat COVID as a wake-up call to prepare for other high-impact risks, especially those such as climate, which are not ‘high probability’ but racing certainties? Will they manage or fail to see the linkages between COVID, climate, the destruction of nature, and inequality? We have just learnt the costs of inaction; we cannot afford to make the same mistake twice. Leadership attention in many institutions is understandably preoccupied with short-term operational challenges and (for some) survival. That is precisely why our keystone institutions – whether national and multilateral such as the IMF – need to think both fast and slow, strengthening stress tests on climate and other key societal risks and pushing for greater transparency, while judiciously providing an inch more time for full implementation.


3. An ounce of prevention.6 Well-resourced hospitals are vital and save lives. But individual and collective outcomes are directly affected by access to healthy nutritious food, by air quality and clean water, and by the quality of social care. Consider the following. We spend $1.9 trillion on defence.7 As President Trump acknowledges, COVID in the US has already killed 30 times more people than either Pearl Harbour or 9/11. Imagine what 10% or 20% of global defence spending could do if deployed upstream to improve our food system (with its $12 trillion of hidden costs),8 clean up air quality (with 7 million associated deaths)9 or tackle climate risk ($100 billion of related damages last year).10


4. Mutuality and interdependence. We are stronger together. The insurance industry knows this – sharing risks makes it possible for each of us to have more freedom. And the finance sector is based on portfolio diversification. And yet, precisely at a time of maximum collective threat to humanity, we are moving away from mutuality and interdependence, certainly beyond national borders. Over the next 12-24 months, we will experience an acid test of our collective spirit: how we choose to develop and distribute vaccines for COVID. Will we have a vaccine that, like the virus, transcends borders? And if not, what does this tell us about our collective prospects of tackling climate change, which presents an irreversible if less personalised threat to our collective future? However high the flood defences and walls between nations, no country or community can effectively self-isolate from climate risk.


5. Justice and fairness. We are only as strong as our weakest link. It is one thing to ‘clap for carers’ during the lockdown. But it will be quite another to show real appreciation in the coming months and years for all those ‘invisible workers’ – across health, food and agriculture, education, transport, waste collection and multiple public services – upon whom we all depend but who are amongst the lowest paid in our society. More resilient systems must be designed to flourish over time, balancing legitimate needs and claims across generations. Four billion people – half the world’s population – are under the age of 30, 90% of whom live in the Global South. As a matter of design, how do we ensure that their prospects are not damaged irreparably by this crisis? While they may not have been the main health victims of COVID (unlike the Spanish Flu, which seemed to ‘target’ 28-year-old males), they will be the main economic casualties if we fail to win the peace.11

Hence, the next challenge.


The Regeneration of our Economies

Over the past weeks, we have lost our innocence and naivety about a rapid V-shaped recovery. We are learning how fragile and ‘over-optimised’ our economic system has become, and how a shock can create irreversible scarring. We walked into this crisis with too much market concentration in key sectors and too much debt, across public and private sectors (with many top hedge funds highly leveraged), compromising economic resilience. Sectors such as transport and hospitality will take a long time to recover. Large-scale bankruptcies are likely among SMEs, the employment backbone of most economies. Precautionary saving by households, not least given unemployment fears, is likely to rise sharply. Remittances, critical to the balance of payments of many low-income nations, may fall by 30% or more.12 And in an era of anti-globalisation, potential ‘beggar thy neighbour’ currency wars and supply chain restructuring, it will be hard to use international trade as an engine of growth. Hundreds of millions of jobs are at risk, with the risk of a global depression much higher than currently priced into gravity-defying markets.13 How to build an economy whose central purpose is to serve the real needs of our society?


6. Put people first. This is not a proposition to save existing jobs. It’s quite possible that half the jobs destroyed by COVID will never come back, not least given the likely acceleration of automation across the economy. Rather, the principle must be to prioritise social solidarity and economic growth over fiscal orthodoxy, and to build greater trust that the economy works for people, not the other way round. That needs to be anchored at the national level. But given the globally correlated nature of the shock, we also need to act internationally, learning from the architects of the Marshall Plan, which transferred the equivalent of 5% of US GDP, and of the Bretton Woods Institutions. What if our multi-lateral development banks, including the Asian Infrastructure Investment Bank, were to issue a $2 trillion perpetuity, backed by $100 billion Paris Agreement annual funding commitments, to invest in strengthening public health and climate action across developing economies? What if the EU were to take a similar approach, raising a $1 trillion perpetuity (at an annual interest cost of around $5 billion) to reboot growth, job creation and the essential political project of pooled sovereignty?

The principle also recognises that our ‘invisible’ key workers – often also part of the informal workforce – need a much better deal for their economic security, and would prioritise bailout packages for those companies that have a strong ESG track record. And finally, 'putting people first’ opens the possibility for creative financial solutions. Could this be the moment when the Paris Club, China and the MDBs/IMF jointly forgive $1 trillion low-income country (public) debt in exchange for clear national commitments to invest at least 5% of GDP in education?


7. Invest in tomorrow’s growth sectors. Recovery programmes should offer a ‘use it or lose it’ moment to jump the economy onto a low-carbon, more inclusive growth path. We already know which sectors are key: health and social care, sustainable infrastructure, social housing (both new and retrofits), mobility services, digital/tech and nature restoration all meet the test.14 IRENA’s latest report suggests that investing in the clean energy transition to get onto a “well below 2 degrees pathway” could generate 35 million additional jobs by 2050.15 Abu Dhabi’s announcement this week of a bid at 1.35 US cents per kilowatt hour for their latest 2GW solar tender proves yet again the astonishing potential for clean electricity to power our essential economic transformation.16 This time round, there is no excuse for rebooting the old polluting economy.

But we need to go one step further. What if one COVID-19 legacy was a serious mobilisation of industry leadership, in the top 10 emitting sectors, around the creation of net-zero pathways?17 And what if G19/20 governments agreed to make bailout packages conditional on meaningful net-zero commitments? One thing is for sure: many private investors would love the clear market signal and development banks (both national and multilateral) could play a major role in crowding in large-scale private capital into well- structured investments. Right now, more than $10 trillion of institutional capital is held in negative-yielding government bonds, indicating an inadequate supply of these investment opportunities, and compromising long-term pension returns. It is lack of clear direction, not a lack of finance, which is holding us back.


8. Build the zero-waste, more circular economy. COVID has starkly revealed the extent of waste, capital misallocation and under-utilised assets across our society.18 The new COVID regenerative economy will need to be much more creative and disciplined in its use of resources. Just consider the opportunity to reduce food loss and waste: 30% of primary production and 8% of global greenhouse gas emissions (if food wastage were a country, it would be the third-largest emitter in the world).19 COVID disruptions are making the situation a lot worse. This is particularly acute across Sub-Saharan Africa, where food insecurity risks turning a public health crisis into a humanitarian disaster. Here, up to 50% of food produced is lost between farm-gate and fork due to poor logistics, decrepit storage facilities and an inadequate cold supply chain (over time, a critical barrier to distributing vaccines).20 What if we could seize the moment with a public-private partnership to develop and implement practical solutions to this challenge – tackling both Sub-Saharan Africa’s food security challenge and its $30 billion balance of trade food deficit?21

Here’s a different example of the circularity principle in practice – one that can happen ultra-fast by repurposing existing assets. Over the next six weeks, the main streets in central London will be reclaimed for people to walk and bike safely.22 Why? Because the mayor and his team know that we cannot safely return to mass public transport systems, and that cars are not the answer. For the past 100 years, our cities have been shaped around cars and their need for privileged space. Private automobiles increase urban land requirements by three-to-five times23 - land we desperately need if we are going to build sustainable cities in a world of growing urban populations. What if we could repurpose streets – and the $20 trillion of capital invested in cars (typically unused for 22 hours per day) – and put that space and capital to good purpose? And what if we could repurpose just 5% of the hospitality industry’s capacity to reduce homelessness in our major cities, simultaneously tackling a major social challenge and helping a beleaguered sector with stranded, under-utilised assets to get back on its feet?


9. Price risks up-front. If we want to unleash the innovation and execution capacity of a market economy to serve society, we need to give it the right signals. Here’s the most obvious one, even if the politics seems hard. If the G19/20 countries were all to implement a $50 carbon tax, that would translate into at least $1.5 trillion of annual fiscal resources. What if we took just 20% of these resources and invested them in improved health, social care, and education services, including the right pay and conditions for key workers? While every nation will need to strike its own ‘just transition’ deal, getting polluters to pay for better public health and a fairer society might just break the political deadlock in some cases. Let’s also get on with phasing out $400 billion of fossil fuel subsidies (with current low oil prices, the timing could not be better), and repurposing $500 billion of distortionary public support to the food systems, instead rewarding farmers for producing food that contributes to both personal and planetary health.24


10. Measure the right things. This is the moment to overcome our obsession with GDP as a measure of economic performance. It only tells us a fraction of what matters. And, in measuring only produced economic capital while failing to measure either social or natural capital, GDP (and other traditional financial return metrics) often sends us in the wrong direction – making our societies less resilient. The Dasgupta Review on Biodiversity (interim report released this month) estimates that the return on natural capital is 3-4 times that of produced capital.25 And yet, we are depleting natural capital in a way that creates massive risk (both median and tail) for society, including zoonotic disease spill-over (SARS, MERS, Ebola, COVID-19). Better solutions exist. The OECD, World Bank, Natural Capital Coalition, UNDP (with its human development index), SDSN and many others have developed tools that capture a much broader spectrum of performance.26

A similar set of total impact measurement tools is emerging in the capital markets. It’s time to start using them for every major public and private economic decision. What if a coalition of 30 progressive companies (two per key sector in a 21st century Noah’s Ark) could show us the way, publishing short, 20-page ‘total impact’ reports in 2021 and creating a new stakeholder/ shareholder value creation ratio? That may sound crazy, given the challenge we have even to get proper carbon disclosure, and the new ratio would need refinement. But it would be a massive step forward to show which companies are truly resilient and would put real teeth into stakeholder capitalism.


Personal Renewal and Growth

We may have failed to do our yoga and meditation classes. But we (or at least those of us with the luxury and privilege of circumstance to read this note) will all have had windows for reflection, juggling the paradox of being both time-rich and time-poor. And over the coming months, we will face choices around how ‘to be’ in the new COVID world. Do we just slip back into old habits, adapting only as required to new realities? Or is there space and energy for a deeper journey of transformation? Recognising that we will each choose our unique path to renewal and growth, here are two principles that will inform my decisions:


11. Conscious choices. Our society and economy will change only if we choose to change. We cannot wait for political or business leaders to move first. There is an infinite number of choices open to us: what we consume, where we work, how we invest, how and with whom we spend our time, and how we build broad-based support for more progressive, inclusive politics – even when they hit our own pocket books. What if we used the next six months to get our own affairs in order, for example shifting our pensions or portfolios so we support only those businesses that are values-aligned? What if we were to apply the same logic to our consumption patterns, likely building on changes already catalysed by the lockdown? Could we combine the various efforts underway and sign up a billion people into a mass-market signal for sustainable consumption – and, over time, investment? Just imagine the power that a billion people choosing to buy regenerative, zero-emission, living-wage products could have on the world economy. If they could visualise their collective impact on climate change, on public health, and on lifting the next billion people out of poverty, that could change everything.


12. Conscious connections. Despite social distancing, we have ironically never been more connected. Part of that connection is digital and, however frustrating at times, we are all learning the potential to build new communities and to bring together unusual bedfellows. Even if we are all zoomed out and have created new self-reinforcing bubbles, we have also opened a whole new window into a more collaborative future. At the same time, we have all learnt that the digital world is no substitute for a real hug. And that stronger local action, whether helping out a neighbour, signing up to be an NHS volunteer or participating in the supernova of local volunteer groups, has been the most hopeful emergent quality of COVID. We are discovering abundance right under our noses. Let’s not grow apart again, as and when we have the chance to be together.


Winning the Peace

COVID has been the ultimate looking glass, an invisible virus revealing the hidden reserves of different societies but also their hidden injustices and fault-lines. We have witnessed the unequal impact of COVID on poor vs. rich communities; our dependence on underpaid, often vulnerable key workers; the toll of our everyday exposure to bad air quality; our growing, often hidden experience of mental stress; the fragility of so many actors across the economy; the deterioration of our international rules-based regime; and our failure to protect nature and tackle climate risk. The message on climate risk is particularly stark and urgent. In 2020, CO2 emissions are expected to fall by around 8% (the good news) as a result of the economic shut-down. But the bad news is that we need to repeat the trick of an 8% reduction every subsequent year to meet our Paris Commitments.27 The only way to solve for this challenge is to build a new economy designed for a net-zero, more inclusive and healthier world.

COVID provides us with one more potential gift. It has shown us that we do not have the luxury of time, nor do we have the option of going back. So, if we want to win the peace, we need to start with a vision of the future that we want. Fortunately, in the Paris Agreement and the Sustainable Development Goals, we already have that societal software and do not need to reinvent it. But we do need to turn reflection into purposeful action. Hopefully, the design principles described in this note can contribute modestly to this collective endeavour.



Jeremy Oppenheim is a Founder & Senior Partner of SYSTEMIQ, a systems-change company that partners with business, finance, policy makers and civil society to make economic systems truly sustainable. He is the Programme Director of the Energy Transitions Commission, Blended Finance Taskforce and The Food and Land Use Commission. He is the lead author of the “Better Growth, Better Climate” report of the New Climate Economy project, and previously spent over 20 years at McKinsey, developing and leading its Sustainability and Resource Productivity Practice from 2007-2015. He is also an Expert Advisor to the Task Force for a Resilient Recovery.



1 See, for example, this blogpost from the IFPRI, which estimates that over 140 million people (+20%) could fall into extreme poverty in 2020 as a result of COVID.
2 This is a little-exposed issue that has the potential to become a humanitarian emergency in the next few months. For more information on the impact of peat fires see here and here. For more information on the COVID – peat fire combined risk, see this example from the limited available news coverage to date.
3 For more reading on collective action in the face of COVID, see this (just released) report from Alex Evans and David Steven.
4 See this overview of major rollbacks/disruptions to date. The FT also published a piece this weekend on the evolving crisis in the Amazon.
5 See this piece from WCS on the links between ecological integrity, emerging infectious diseases and other aspects of human health.
6 For those not used to imperial measures, a pound (of cure) is sixteen times the weight of an ounce of prevention.
7 See this factsheet by the Stockholm International Peace Research Institute.
8 See the 2019 Growing Better report from the Food and Land Use Coalition, where the total hidden cost of the food system is calculated.
9 See this short piece from the WHO.
10 Exact costs are difficult to calculate, but this recent report suggests this number is not entirely off.
11 See this note from Cambridge University and INET suggesting that young workers will be disproportionately affected by COVID.
12 See this press release by the World Bank predicting the sharpest decline in recent history, with 20% in 2020 alone.
13 See this recent policy framework from the ILO. This McKinsey piece looks at the UK in particular.
14 See the Energy Transition Commission Priorities for a Global Recovery on COVID and this brilliant piece by Hepburn, O’Callaghan, Stern, Stiglitz and Zenghelis.
15 See this recent report on measuring the socio-economics of transition by IRENA.
16 See Forbes, 28 April 2020.
17 Some actors are already making headway here: the Energy Transition Commission, the Fashion Pact and efforts led by Nigel Topping (UNFCC).
18 As Lord Adair Turner pointed out to me, a precautionary investment in 15,000 spare ventilators, 5,000 spare ICUs, and 10 million masks would have set the UK back £400 million. Meanwhile, our UK streets hold a £400 billion stock of cars utilised only 5% of the time.
19 See the analysis and recommendations on food waste by Drawdown.
20 See this report from the Coalition for Urban Transitions.
21 See this report on food systems transformation in SSA from the Food and Land Use Coalition.
22 See this briefing from the Guardian.
23 See this recent paper by the Victoria Transport Policy Institute.
24 See the Growing Better report by the Food and Land Use Coalition.
25 See the interim report published at the end of April this year.
26 See, for example, the Beyond GDP report from the OECD, and the Sustainable Development Index developed by the SDSN. This article in Nature captures the problem well.
27 See the estimates of the UN Environment Programme, which state that global emissions must fall by this number every year until 2030 to keep temperature increases below 1.5°C.

Jeremy Oppenheim

Founder & Senior Partner, SYSTEMIQ