Thanks for reading our new briefing about what companies are doing to navigate the continued reality of remote work, to reopen safely, and to reset their practices for the long-run. You can sign up here to receive it by email each week as well.
The latest virus forecast: The US has had a 76% increase from two weeks earlier, averaging over 140,984 new cases per day and hitting a record of over 180,000 daily cases. States are increasingly requiring masks and restricting any in-person nonessential activities or business, as hospitals hit capacity. Parents are bracing for a return to universal remote learning in some areas. Vaccine news is positive, but any Covid shot won’t be widely available until well into 2021. “Help is on the way, but it’s not here yet,” said Dr. Anthony Fauci.
The business impact: Global economic output is down about $3.4 trillion annualized. “With the virus now spreading, the next few months could be challenging,” said Fed chairman Jerome Powell. The S&P 500 hit a record. New housing starts were up 11% in Sept. The number of workers going to their offices dipped in early November, to 25.1% of pre-pandemic levels.
Focus on Internal Carbon Pricing
To reset organizations for the long run, we need to more visibly connect how our day-to-day work activities contribute to climate change. One good approach to this is internal carbon pricing. Used by Microsoft and others, it involves a company charging its own units for their carbon emissions linked to activities ranging from heating their offices to purchasing supplies.
So, for example, an employee might see an internal carbon surcharge added whenever they book a flight for work, or order office supplies. They have to pay that surcharge out of their department’s normal operating budget, giving them a very immediate incentive to reduce nonessential travel and purchases.
Swiss Re, the Zurich-based reinsurance company, announced recently that in 2021 it is dramatically increasing its internal carbon price from $8 to $100 per metric ton, and extending it deeper into the organization. I spoke with Mischa Repmann, senior environmental management specialist at Swiss Re, about how it works, and how other organizations could approach it. Some key takeaways:
- If the carbon price is too low, it can backfire. Swiss Re will show employees the surcharge on flights starting on Jan. 1 when it goes to $100 per metric ton, or roughly $1,000 on top of the price of a Zurich-New York plane ticket. With the lower $8 per metric ton surcharge, “you could have ‘rebound’—or perverse—incentives where people think, ‘Oh, I’m compensating my emissions for that flight. So I can fly lightheartedly,’” says Repmann.
- Department budgets have to absorb these extra costs. Staff are not allocated extra money for the surcharges, which increases the urgency of reductions. For many organizations, reduced travel because of the pandemic could make this an easier moment to introduce a surcharge. Flights represent about two-thirds of the operational carbon footprint at Swiss Re, and this year its employees’ air travel is roughly 80% lower than 2018. Swiss Re is aiming for a 30% reduction in air travel from the 2018 baseline next year, which helps provide the budget savings to absorb the carbon surcharge.
- Swiss Re uses the surcharge to fund carbon offsets and carbon removal. The company has committed to net-zero emissions for its operations by 2030, and the surcharge provides money for long-term investment in carbon removal to get there. It will gradually increase the surcharge from $100 in 2021 to $200 per metric ton by 2030.
- One organization can make a difference by showing the way for others. Swiss Re acknowledges that its own impact on carbon emissions is minimal, but it hopes to provide an example for others.
- The best approach is trial and error. Repmann says it’s easy to get caught up in years of planning and modeling, but he advises just going for it. The basic questions he suggests starting with: “What do you want to achieve? What do you need the money for? And what do you think is a reasonable level that A) makes an impact, and B) is affordable for the company still?”
For more on this topic, you can read an explanation of Scope 1-3 emissions, which is how many organizations analyze their impact. The Carbon Pricing Unlocked Partnership has a how-to guide for internal carbon pricing. I also spoke with Casey Pickett, director of the Carbon Charge at Yale, about how universities are using internal carbon pricing—you can read that interview here.
Content from our partner McKinsey & Company
What does the newest vaccine breakthrough mean for getting back to business? A lot still has to go right, but the latest news could mean normalcy by the third or fourth quarter of 2021. See our analysis.
What Else You Need to Know
Stay away from indoor restaurants. They’re the places you’re most likely to catch the virus, according to new research. “Restaurants are by far the riskiest, about four times riskier than the next category, which are gyms and coffee shops, followed by hotels,” said Stanford’s Jure Leskovec, who cowrote the research paper.
- About eight in 10 new virus cases during the spring were linked to crowded indoor spaces, including restaurants, gyms, and cafes.
- The research supports the idea of superspreading. Just 10% of places people visited in Chicago represented an estimated 85% of infections.
- The research suggests reducing capacity is a viable alternative to total shutdowns. Limiting restaurants and other facilities to 20% capacity could reduce new infections by 80%. Such an approach would only decrease the number of customers by 42%, since such limits have a smaller impact during non-peak hours.
When in doubt, companies offer more time off—and increasingly require you take it. The pandemic is showing the limits of unlimited vacation time, which often leads workaholic Americans to take less. And people feel guilt and anxiety about taking the extra time off companies are extending to combat burnout. One solution is to institute new mandatory companywide holidays.
- Red Hat, the software company, now shuts down for quarterly “recharge days.”
- Companies including job site Indeed.com have instituted a monthly company-wide long weekend.
- Google CEO Sundar Pichai announced that Dec. 18 and Jan. 4 would be holidays, and Dec. 28 to Jan. 1 would be a “no meetings week.”
- Researchers say people return to work more productive and creative. “The benefits of taking a break from work, even before the added stresses of the pandemic, are well documented,” writes Joanne Lipman in The Wall Street Journal.
The pandemic is boosting hiring beyond big urban centers—and outside of companies’ home countries as well.
- Startups interviewed by Business Insider said their international hiring had increased since the pandemic shifted them to remote work. “The only policy we have is that you have to share 80% of your working hours with your team, just for logistical purposes,” said Messagebird CEO Robert Vis.
- Greece is trying to attract mobile workers (along with Brits fleeing Brexit) by offering that half of new residents’ income won’t be subject to taxes.
- CFO Stephen Scherr said Goldman Sachs has even greater confidence now in its plans to shift jobs from banking capitals like New York and London to Salt Lake City, Dallas, and Bangalore.
- Marathon Asset Management is setting up an office in Miami, as its CEO Bruce Richards cites taxes and crime, saying “New York is not what it once was.” Manhattan commercial leasing activity was down 45% during the third quarter from a year earlier.
People should be taxed for working from home. That’s the recommendation of Deutsche Bank macro strategist Luke Templeman in his company’s report on how to rebuild the economy. Templeman argues that people benefit from working from home and save money on commuting and other expenses—and he makes the case for a 5% tax. The tax could be paid by an employer if they don’t supply office space, and the funds used for grants to lower-wage workers whose jobs can’t be done from home.
Salesforce hired a high-profile chief equality officer, but its efforts to diversify have stumbled. The tech company four years ago brought on Tony Prophet from Microsoft, but since then the company has made limited progress in increasing its staff of color. A report by Business Insider suggests a few reasons: Prophet’s team was separate from human resources and turf wars and a lack of coordination ensued; it initially leveraged employee resource groups instead of outside expert consultants; and the team focused more on marketing than on digging into the data on progress.
Companies with more women board members and managers perform better in the stock market. Since 2008, European firms in the top quartile for female representation in leadership have seen their shares perform 2.5% better annually on average than those in the bottom quartile.
The week ahead is packed with high-profile events about the future of business and the economy. There’s the Bloomberg New Economy Forum, World Economic Forum Pioneers of Change Summit, and The New York Times DealBook conference. If nothing else, it signals the return of ambitious blue-chip events, even if they’re all being done remotely. Look for headline pronouncements about the state of the world, and splashy virtual conference technology.
Here are some of the best tips and insights from the past week for managing yourself and your team:
- Get a hobby. You should stay away from indoor gatherings this winter, and avoid working nonstop. So what can you do? Alongside exercise, play some music, take up drawing, tie some flies. Research shows that watching TV and bingeing on social media are bad for you, and spending time with a hobby reduces stress.
- Make a schedule, not a to-do list. To-do lists make it too easy to blame yourself for not finishing tasks and to distract yourself from priorities. Plotting tasks on a calendar helps you use time more efficiently and enjoy leisure activities guilt-free.
- Send voice memos to keep in touch. It’s possible to have more of a personal connection when you hear someone’s voice than an email or text. You can easily send them via WhatsApp or the messaging app on any phone.
- Talk to your kids about your work. Whether you’re working from home or not, it’s a good time to answer questions children might have about your job. You can also explain why you have to work rather than spending time with them.
The pandemic is boosting cigarettes, and golf. Cigarette sales are holding firmer than their manufacturers had forecast, as pandemic-weary Americans turn to smoking for distraction and stress relief—despite the added lung health risks.
- Meanwhile, golf equipment sales rose 42% in the third quarter, and the number of rounds played increased 25.5% in September from a year earlier. The obvious attraction: golf is made for social distancing and gives you something to do outdoors.
The number of air routes has fallen by one-third since the pandemic started. Airlines have stopped flying less-profitable routes and industry experts say many may never come back. There were nearly 50,000 commercial routes in the world in January, and now just over 33,000 remain. Among the casualties is the Almaty to Nur-Sultan route in Kazakhstan, where there were over 1,000 scheduled flights last November—and none this year.
- Airplane deicing procedures are now in focus, with the arrival of winter months. Cabin airflow drops by as much as 50% during the 10-20-minute procedure. Public health experts say it’s still safe, but advise passengers to be sure to have masks on when deicing starts.
Students are rebelling against anti-cheating software put in place during the pandemic. The systems monitor students’ faces and movements, any noise and appearance of other people in the room, as well as their computer activity during tests administered remotely. But, with final exams approaching at many schools, some students say the software is inaccurate and unnerving, and are increasingly engaged in online and legal battles with the tech companies behind it.
The handbook for this new era of business doesn’t exist. We’re all drafting our own as we go along—and now we’d like to start doing so together. You can sign up here to receive this briefing weekly by email. Have a great week!