Like the fear of terrorism 20 years ago, fear of contagion post-Covid will drive changes in how corporations function.
Like the fear of terrorism 20 years ago, fear of contagion post-Covid will drive changes in how corporations function.

Corporations will assume burden of safety, raising costs post-COVID: Moody's

ANI | Updated: Aug 24, 2020 11:12 IST

Hong Kong, Aug 24 (ANI): The coronavirus pandemic will profoundly affect the way corporates interact with employees, customers, governments and one another, according to the latest sector in-depth report by Moody's Investors Service.
While employees will seek a virus-safe workplace, customers will prefer more digital products and services, and governments will seek greater engagement with management.
"All of these demands will require corporations to invest in a wide range of safety measures and protocols which will raise their costs and lower their capacity, curbing revenue and profit potential long after the pandemic recedes."
Corporations will assume the burden of keeping employees, customers and society at large safe from the infection, said Moody's.

Like the fear of terrorism 20 years ago, fear of contagion post-COVID will drive changes in how corporations function as customers, employees and regulators demand new safety protocols.
But fear of contagion will affect a much wider range of corporate sectors, and some will be affected more than others.

Restaurants, lodging and leisure, tourism and airline companies will be transformed. Companies are investing large sums in new technologies and capabilities to ensure customer and employee safety.
They are implementing safety-oriented procedures to forestall regulations but could find that the political pressure to get tough on safety leaves them subject to burdensome or conflicting rules.
Retail's structural shift will accelerate, said Moody's. The pandemic has created hordes of online shopping converts who will be motivated by safety concerns to maintain their new habits.
Investments required to change their sales approach, supply chains and operating strategies will weigh on retailers' capital plans and profits.
An increase in online shopping will lower retail property values, hurting retail landlords, but creating opportunities for telecom, tech and services companies.
Supply-chain dependent businesses will experience pronounced changes. A move to regional supply chains, already occurring in autos and electronics, will accelerate.
There will be further shifts toward more local production of critical goods like drugs. Lower global growth and changes in consumer preferences will weigh on the oil and gas markets globally with a lower demand for energy.
The emphasis on safety will shift environmental, social and corporate governance focus to social from environmental risk. Corporations will likely forego energy savings in favour of ensuring better ventilation for employee and customer safety.
Governments will play a larger role in private enterprise, while income inequality and information security issues will take a centre stage. (ANI)