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Good morning.
These past two weeks I’ve been writing pretty exclusively on the spread of Covid-19 so, with coronavirus on the brain, I’m dedicating today’s newsletter to the topic as well.
The outbreak—which has infected over 95,000 people worldwide—has had a profound effect on both business and the environment, with what’s good for the latter often being bad for the former.
For starters, up to 13,000 daily flights were cancelled between January 23 and February 13 as passenger numbers dropped and governments implemented restrictions on arrivals from infected regions. Obviously, the grounded planes won’t be pumping carbon into the air but the drop-off in tourism is hammering hoteliers, food and beverage, and the airline industry.
Case in point: the U.K.’s recently-rescued Flybe declared bankruptcy this morning, as Fortune’s David Meyer reports.
Meanwhile, reduced productivity in China has cut oil demand 20% in the country and had a knock-on effect worldwide. The prolonged closure of factories has cut emissions from coal fired power stations, which accounts for 59% of China’s energy needs, too. The result: clearer skies and a cleaner atmosphere.
The factory shutdowns have also exposed a vulnerability in global supply chains, however, the majority of which route through China at some point and are now struggling to get back online. The result here: an uptick in first quarter revenue warnings, from the likes of Nike, Apple, Maersk and more.
Admittedly, most multinational corporations were already aware of that vulnerability—it was highlighted by the trade war. But now the coronavirus is placing new emphasis on the need for companies to develop “China plus” strategies, which involves building manufacturing capacity in areas outside of China to mitigate the risk of another total shut down.
The coronavirus crisis will pass, and the world’s manufacturing hub will get back to work. But that doesn’t mean we should return to business as usual. In “China plus” there’s an opportunity for investors to implement sustainable development practices and build capacity the right way. Among other things that means ensuring renewable energy supplies, living wages, and legal labor.
More below.
Eamon Barrett
eamon.barrett@fortune.com
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CARBON COPY
EU Green deal
The European Commission unveiled plans for its first ever climate law, which aims to make the 27-country bloc climate neutral by 2050. Environmental campaigners, and some EU member states, have criticized the law for being too weak. The proposal, for instance, delays setting a higher target for reducing carbon emissions by 2030. BBC
Internalizing the issue
According to the New York Times, an official in the U.S. Interior Department spearheaded a campaign to insert climate change denial into the agency’s official reports since 2017, including false information such as debunked claims that more carbon dioxide in the atmosphere is beneficial. The official, Indur M. Goklany, was promoted to the office of the deputy secretary in 2017, where he was put in charge of reviewing the agency’s climate policies. The New York Times
Garden State
Singapore, which currently calls itself the Garden City, has hopes to upgrade its moniker to a “city in nature” by 2030. To do that, the city state is planting 1 million trees over the next ten years and designating 200 hectares of land as nature parks. However, the more important step Singapore is taking so far as climate change is concerned is its plan to reduce the emission of hydroflurocarbons (HFCs)—a greenhouse gas. HFCs are refrigerants in air conditioners, which tropical Singapore depends on. Bloomberg
IN CASE YOU MISSED IT
H&M made its former sustainability chief its CEO. Now it wants to help other fashion houses become sustainable—for a fee by David Meyer
The oil industry is finally talking climate crisis, but don’t expect change to come easily by Katherine Dunn
Germany, the engine of Europe, plans to ditch nuclear and coal—regardless of whether renewables can fill the void by Christiaan Hetzner
Galapagos cruises spotlight economic and environmental pressures challenging the islands by Jim Clarke
Why investors suddenly turned on pot stocks by Anne Sraders
How states can overcome new federal barriers to clean energy by Christopher Crane
CLOSING NUMBER
23 billion
That’s how many single-use plastic bags New Yorkers get through per year. Well, no more—not since the state implemented a law Sunday that prohibits New York shops from handing out plastic bans. Paper bags are okay but will come at a five-cent fee to the customer. There are exceptions to the ban, of course. Customers on food stamps will be exempt from the paper bag fee and takeout food can still be delivered in plastic, for some reason. California, Hawaii and Oregon have already introduced similar bans, as have a number of countries around the world.
