This is the third article in the series of IdealRatings coverage about COVID-19 in ESG.
Companies are quite in an unenviable position; between taking cutting costs decisions and being asked to provide a helping hand for the community in its fight against COVID-19. The list of companies that offered help to the society is quite long; from companies providing donations, to ones that shifted their main business activities to produce needed items during this period like masks and sanitizers, to even ones that publicly shared IP rights of required equipment. Expected changes might take place in the form of:
1. Possible reductions in donations, due to the economic slowdown and some companies going out of business.
2. An increased role of the capital market through the issuance of social bonds. This kind of bonds can assist countries and companies hit by COVID-19 in countless ways. It can help in supporting the healthcare system, delivering the long-awaited vaccine, economic recovery, sustaining business, etc. So far, the market has witnessed such issuances from supranationals including; European Investment Bank that issued SEK3bn social bonds, African Development Bank with $3bn issuance, and the International Finance Corporation that came with two issuances $1bn and SEK3bn.
3. A shift away from certain previous targets to other ones in the charity field. Sustainable Development Goal (SDG) number 3, Good Health and Well-Being, is the one gaining traction at the meantime where lots of companies and even governments support are directed towards healthcare sector, medications and the development of a vaccine for this virus. This sector is facing quite a challenge as the number of patients have exceeded its capacity, even in highly developed nations.
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