IBM's report: sustainable attitudes growing through pandemic
Since the start of the COVID-19 pandemic in late 2019, trends which have rumbled quietly for years have leapt into the mainstream.
Working from home was previously a luxury for entrepreneurs or artists, but now many businesses are questioning whether they will make a full return to the office in a post-pandemic world, due to the success of remote work and the financial advantages.
Furthermore, due to the pandemic’s origin at a meat market, many have reevaluated their diets. A study by Mintel showed that the COVID-19 pandemic has made a vegan diet “more appealing” to one quarter of British Millennials.
A recent study by IBM has shown that sustainable practices are of growing importance to consumers. IBM, which is based in New York, has a revenue of $73bn and creates computer hardware, surveyed 14,000 individuals. Responses came from the United States, India, United Kingdom, Canada, Germany, Mexico, Spain, Brazil and also China, from a variety of employment backgrounds.
The Sustainability Bump report from IBM
The report shows:
- 93% of respondents say the pandemic affected their views on environmental sustainability.
- 54% of consumers are willing to pay a premium for brands that are sustainable and/or environmentally responsible.
- 82% of consumers would choose a more environmentally friendly transportation option, even if it costs more.
- 59% of personal investors expect to buy or sell holdings in the next 12 months based on environmental sustainability factors.
- 48% would accept a lower salary to work for environmentally responsible organizations.
IBM’s sustainable endeavors in India
IBM is pushing for greater sustainability within its own company. In India, the company has introduced a new programme: 'IBM STEM for Girls', across 130 schools. The three year programme will “Advance the skills and careers of close to 25,600 students in Science, Technology, Engineering, and Math (STEM) fields.”
In addition, the Goa State Government partnered with IBM, to start online courses for the students, job seekers and entrepreneurs, to further develop their technical and professional skills. It is hoped that this will upskill 10,000 individuals in one year.
FedEx issues sustainability bonds and a carbon neutral goal
FedEx Corp, founded in 1971 and made famous from the 2000 film Cast Away, provides transportation, e-commerce and business services. Headquartered in Tennessee, USA and with an annual revenue of $79 billion the company is making the move to net-zero.
"We have a responsibility to take bold action in addressing climate challenges," said Frederick W. Smith, Chairman and CEO of FedEx Corp.
The company has announced offerings of $1.75 billion of USD-denominated notes and €1.25 billion of euro-denominated notes. The proceeds of the debt offerings will be used with existing cash to redeem $5.8 billion of the company’s existing debt. This will eliminate near-term debt obligations taken on during the early stages of the COVID-19 pandemic.
The sustainability bonds
The transaction includes:
- Substantial Overall Debt Reduction. To be completed later this month, the debt offerings and subsequent redemptions, total the biggest series of related debt transactions in company history. The net reduction will hit $2.6 billion in FedEx debt obligations. By erasing these obligations, it will reduce the company’s total debt portfolio by 11% as well as strengthen its balance sheet.
- Elimination of Near-Term Debt Maturities. FedEx will end all debt maturities through fiscal year 2025 and one tranche in fiscal year 2027, to provide liquidity and flexibility in the coming years, as FedEx maintains its position in the challenging macroeconomic environment.
2040 carbon neutrality
Furthermore, the offerings include an eight-year, €600M sustainability bond tranche in Europe. FedEx will use this to finance its efforts to achieve its target of carbon neutral operations by 2040.
Across their worldwide operations, FedEx will reduce or eliminate their carbon impact, upgrade their transportation fleet to electric and engage with cutting edge technologies across the board.