By Nathaniel Bullard
Here’s a small example: Last week, foot traffic to North American retailers fell more than 30% year on year. That’s before many retailers, including Nike, Apple, Nordstrom, Ralph Lauren, Coach, Abercrombie & Fitch and J. Crew, decided to shut their stores for the rest of the month (at least). Some of those sales might be recouped online, of course, but declining retail foot traffic also means declining food and beverage sales in the areas around where people shop, and declining fuel consumption, too.
Here’s another example: The two largest U.S. theater chains, AMC and Regal, closed all of their cinemas Tuesday. That’s after weekend box office had already fallen to by more than 60% to levels not seen in 25 years. Faced with closed theaters, NBCUniversal has done something quite shocking given how jealously movie studios typically guard their theatrical release windows: it’s putting its newest movies online for a 48-hour rental period, starting with the planned March 20 release of Trolls World Tour. As Franklin Leonard, and influential Hollywood executive and founder of the Black List, said on Twitter, it’s “a decision that will likely reverberate beyond the pandemic.”
The corporate world is testing its prior behaviors, too, and I think many decisions made today could also reverberate beyond the pandemic. How many millions of meetings-that-could-have-been-emails are now being put to the test? How many fly-in, fly-out encounters are now being conducted perfectly well as a video conference from home?
Even one of the most vaunted in-person business events, Y Combinator’s Demo Day, has gone online. Bloomberg News’ Sarah McBride describes Demo Day as “a sacred Valley ritual” and instrumental for many entrepreneurs’ fundraising and visibility efforts. Instead of a high-energy gathering in San Francisco’s Pier 48, Demo Day took place via an invite-only website, featuring only a few metrics and no pitch videos. One entrepreneur said this online-only format favored “functioning businesses” like his: “The first thing they see is the metrics, not the charisma.” A partner at venture capital firm General Catalyst said the format might serve his work, as well: without the sense of competition in the room, there would be “less FOMO,” or fear of missing out among investors, and valuations might be a bit more restrained.
Every commute not taken or retailer not visited or movie theater not patronized or Demo Day not attended provides a fresh counterfactual. Let’s call it DOMO: Data on Missing Out. We know what we missed out on, but more importantly, we can measure what we didn’t do in terms of avoided environmental impact. We’re already seeing that in Europe, where weekday electricity demand now resembles the (much lower) weekend demand of years past.
Right now, this reduction in environmental impact is happening by force and by necessity. I think there’s a potential, however, for some of this reduced impact to become permanent, as part of a changed incentive system of corporate and individual carbon accounting. Picture your streamed movie, your conference call, or your home shopping experience with a live carbon emissions counter. You’d know the carbon footprint of the data center hosting your call and the carbon intensity of your telecoms provider. You’d also know the avoided emissions from not commuting, or not flying to a meeting. You might have a competition among family members or friends or co-workers to see who can have the lowest carbon footprint. It would require a change in corporate behavior, but it might not require elaborate accounting.
I would hope it goes without saying, but a global pandemic is really not the way we want to achieve greater visibility on our carbon footprints or inspire us to reduce them. It’s a potential second-order effect, but insofar as it becomes behavior, it might just stick.
Nathaniel Bullard is a BloombergNEF analyst who writes the Sparklines newsletter about the global transition to renewable energy.