What the pandemic has taught us about the challenges we urgently need to address
Our CEO, Nick O'Donohoe, writes about the lessons we're learning from Covid-19
The impacts of COVID-19 have pushed around 2 per cent of the global population – or 140 million additional people – into extreme poverty. That’s according to the UK’s Foreign, Commonwealth & Development Office’s (FCDO) poverty model. The department is not alone in its bleak estimation. Using a comparable modelling system, the World Bank Group has placed the figure at 131 million people.
Overall, the FCDO predicts the pandemic has reversed progress on world poverty by seven years. This is catastrophic and the direct impacts of COVID will be felt across emerging markets for many years.
But we should not fall into the trap of ascribing all injustices and issues to COVID. For example, while capital flows into Africa have doubtless seen a significant drop over the past 12 months – in August the Economist estimated a 30 per cent drop in FDI over the year – the funding gap on the continent due to a lack of sustainable investment is not a new one.
And while health systems in even the most developed nations have been put under strain by the pandemic, access to healthcare in emerging markets is a pervasive and critical development issue.
COVID has shone a light on these matters and in many cases exacerbated them, but they were always there. The Global Commission to End Energy Poverty’s 2020 report found 800 million people worldwide still lack access to electricity, a necessary step to poverty eradication, while hundreds of millions more struggle with erratic and limited service. And despite lockdowns across the world leading to a ‘record fall’ in fossil-fuel emissions in 2020, the year still fell just short of being the Earth’s hottest year on record.
Four key lessons from Covid-19
All that said, the pandemic has taught us lessons about how we can tackle global issues more effectively – with a renewed focus on inclusion and sustainability. Watching the global effort to tackle COVID-19, I think there are four main takeaways that can help inform what we do next.
First, the race to develop a vaccine for COVID saw increased collaboration between private and public organisations as well as foundations and multilateral bodies. In the summer the Global Vaccine Summit, comprising representatives from over 50 countries, launched an innovative financing mechanism designed to incentivise vaccine manufacturers to produce enough of the vaccine, and to ensure access for developing countries. It would be unfair to claim that this level of collaboration has been completely absent from efforts to combat global issues such as climate change and poverty but there is doubtless more to be done. Looking towards private-public partnerships and the growth of impact investing shows the potential for different organisations and sectors to come together to achieve sustainable impact.
One example from our portfolio is MedAccess, which accelerates access to healthcare products – using an innovative tool called the ‘volume guarantee’ to offset some of the risk companies take when introducing medicines into developing countries. During the pandemic, that’s included providing a $50 million guarantee for UNICEF to respond to the COVID crisis.
What is clear is that the public sector cannot solve the great global challenges on its own. It needs to collaborate with private sector companies that in turn are willing and able to look beyond short-term profitability and embrace their role as global citizens.
Second, the use of technology has had a huge impact on the way we have lived our lives through the pandemic. From the rise of video calls and events to the use of online GP appointees to increase access to healthcare, technology has embedded itself further into our lives. Finding sustainable and inclusive solutions to reach the UN’s Sustainable Development Goals will require technology, not only as solutions but to gather data and inform our approaches.
One example I am particularly proud of in our portfolio is mPharma, a Ghanaian healthcare company that uses data and technology to combine patient demand figures for medicines more effectively, to help make the supply chain more efficient. This allows it to distribute medicines to the mass market at a significantly lower cost than competitors. The company has also found ways to use its approach during the pandemic – identifying a lack of lab equipment and testing kits and distributing one million testing kits to medical labs in five African countries.
Development institutions, foundations and impact investors need to step up their investment in early-stage technology and provide more support for entrepreneurs in developing countries to adapt existing solutions to local challenges.
Third, as noted by the UN Women’s Policy and Programme division, the impacts of crises are rarely gender neutral and COVID is no different. While men have suffered higher COVID fatality rates, the social and economic fallout from the pandemic – from unpaid care provision to violence against women – has disproportionality affected women. The UN has estimated that by the start of this year around 435 million women and girls will be living on less than $1.90 a day — including 47 million pushed into poverty as a result of COVID-19. We must commit to ensuring the recovery from COVID and economic rebuild is inclusive for women.
But we know it can be done. Last year over a quarter of our investments met the standard of the ‘2X Challenge’ – an initiative to mobilise capital towards women’s economic empowerment – and with our partners we launched the first 2X Flagship Fund. The COVID crisis reinforces that our response to all the great global challenges needs to come with a ‘gender lens’.
Fourth and finally, the urgency of the pandemic and the immediacy of the response it required is uncommon on a global scale. Realising the scale and severity of the challenge the virus posed, leaders acted quickly to put in place measures to try and stop it spreading both within borders and beyond. This urgency has been missing from the global response to threats such as climate change.
While progress has been made in recent years such as countries committing to net zero targets, we need to be more ambitious with our action and more generous with our capital, investing in climate solutions we can scale, if we are to meet the challenge. For example, in the area of climate adaptation and resilience, while current estimates from the United Nations put the need at $300 billion per year, international financial flows to adaptation and resilience are estimated at only $30 billion per year.
We must take advantage of the COP26 conference taking place in the UK later this year to ensure that adaptation, resilience and a ‘just transition’ are at the forefront of our response to climate change.