Indra Nooyi, former Chairman & CEO of PepsiCo and current Amazon board member, took part in the final Barclays Asia Forum webcast session of 2020 to discuss how corporations and their leaders can evolve to meet the demands of a new era. In this “3 Point Perspective” article, she outlines three key factors needed to rise to the challenge.
The COVID-19 crisis has forced a moment of reflection upon all of us: what do we truly value and how should we move forward? Indra Nooyi is emphatic that countries need to cooperate.
She points out that viruses know no borders. To achieve the best outcome, nations must collaborate on developing and producing vaccines, identifying and tracking new pathogens, sharing of information and expertise, and even on the future treatment of animals and livestock. If the current lack of cooperation between countries continues, the world is likely to see further crises beyond the pandemic.
Source: Johns Hopkins University, data to 31 Dec 2020.
Nooyi draws a parallel between pandemics and the cyber world: bits and bytes know no borders. Bad actors can be based anywhere and one country’s lax cyber security can threaten everyone. One person carries a hacked smartphone into a country, which then opens up new vulnerabilities there. And yet, she sees many countries retreating away from collaboration and globalisation at exactly the time we need multi-national institutions and global cooperation.
Even before the pandemic began, there had been many calls — from people like US entrepreneur and 2020 presidential hopeful Andrew Yang1 to billionaire investor Warren Buffet2 — to give capitalism an upgrade to better address the needs of society. In Nooyi’s view, the private sector can positively impact society in a range of ways.
For example, during the pandemic, workers from delivery drivers to cleaners saw their roles re-shaped and redefined. Hourly workers became "essential workers", but received few additional benefits, bar the possibility of early vaccination so they could keep working. Nooyi fears that these workers will still be earning the same wages post-pandemic. It is therefore imperative that corporate and government leaders alike take real action to address society’s inequalities.
On the environmental front, Nooyi explains how plastic has become a problem in the world economy – a subject of which she has firsthand knowledge. For years, plastic waste generated in the West has been shipped to Asia. Some countries are no longer accepting the trade: China, for example, has recently banned the import of all waste3.
1 Humanity is more important than money — it’s time for capitalism to get an upgrade - TED; Jul 18 2018.
2 American billionaires call for upgrades to capitalism, starting with higher taxes on themselves - CNBC; Apr 8 2019.
3 China to end all waste imports on Jan 1 - Business Times; Nov 20 2020.
Source: UN Comtrade data.
Rather than debating what to do with single-use plastic that has already been produced, Nooyi believes it would be better for entire sectors to collectively reduce their output of single-use plastic, or work with other industries to create a closed-loop recycling system.
Alongside countries, multilateral organisations and industry sectors, Nooyi sees a role for large corporations. Companies have the resources and know-how to provide investment opportunities for a better society.
The moment of reflection created by the pandemic is also the perfect opportunity for companies to invest in their own transformation for the future. In Nooyi’s opinion, no industry is immune from the need to evolve over the next decade. Change will require real leadership and a shift in mindset on many levels. Companies need to be held accountable and investors to see that tangible investments can make the world a better place over time.
To tackle environmental issues in particular, companies need time to implement changes and see returns, which then contribute to meaningful change in society. Meanwhile, investors will need to adopt a balanced view of the level and duration of returns. This shift in mindset is already underway, as evidenced by the steady increase in environment, social and governance (ESG) bond issuance by corporations.
Source: Barclays Research, Global ESG: Too trendy to ignore', 4 December 2020
Nooyi believes that the period of widespread vaccination, likely to be in the second half of 2021 going into 2022, will be a golden one for many. Her sincere wish is that we stop and think about those less fortunate than ourselves and what can be done for them as we emerge from the current health crisis.