2020 wasn’t all bad. And it’s important that we remember that. This series considers the heartening things that happened this year, according to each of Tortoise’s five main themes
This has been a year of alarming graphs: we’ve seen plots showing rapidly rising Covid cases and a soaring death rate. Then, as the economic impact of lockdowns started to bite, the number of business closures and redundancies climbed on the y-axis.
But some of this year’s growth curves have indicated better news. The Nasdaq and the S&P, two of the main US stock indices, have both hit record highs, mainly thanks to the Covid-immune tech stocks that dominate both. A year of sitting around at home with our gazes fixed to screens has, at least, been good for Apple, Google, Amazon, Zoom and Netflix – and what’s good for them is good for America’s pensioners, swelling the balance of their 401(k)s.
Bank balances have been boosted too. Under lockdown restrictions in the spring, Brits amassed record savings: deposits reached nearly £60 billion between March and May. The reasons for the rise were, of course, depressing. For office workers, commutes were now from their bedrooms to their makeshift desks, eliminating parking charges, rail fares and petrol costs. Shops were shuttered and retail tanked, and pubs and restaurants all shut up shop too, with no takeaways until April. Trips to the cinema, theatre and concerts seemed like a fantasy when you couldn’t leave your house except for one doleful walk around the park. Even when restrictions eased, savings rates stayed high. Around £12 billion was deposited this October compared to £3.7 billion in the same month in 2019.
The savings haven’t been shared by everyone: thousands have been made redundant, and more time at home put a strain on household budgets that suddenly had to stretch to cover bigger utilities bills. But during lockdown, British people did still set aside close to a third of their salaries, six times more than they saved in the early months of the year. And the Office for Budget Responsibility is predicting another peak in savings in the final quarter of 2020, so lots of people will be entering the new year cashed-up. Once vaccinated, they’ll want to enjoy themselves after a year cooped up indoors: get ready for a roaring 2021.
This is not to say that next year will spell a return to the old ways. Our habits and the things we value have shifted. As the circumference of our lives reduced during the pandemic, our consciousness of our local communities increased. Partly, that’s because of the safety of the familiar: visiting the corner shop down the road seems less risky than chancing it in a crowded out-of-town supermarket (and comes with the added bonus of interacting face-to-face with a human being you don’t live with). But it has also been possible to see plainly the impact the virus has had on local economies: the grim emptiness of town centres under lockdown was a symbol of that hardship – and we didn’t want to see local shops shuttered for good.
When bookstores, boutiques and cafés opened again in the summer, consumers were keen to support them. Data from Salesforce’s global consumer survey in August suggested that 56 per cent of consumers are spending more money at small businesses than they did the year before. 67 per cent said they are now more committed to supporting smaller enterprises than were pre-Covid. In Britain, that support – coupled with the lower overheads and greater flexibility of small shops – has meant that although independents have had a tough time, only 0.5 per cent of them have closed down.
The turn to the local and the sustainable is tied in with an increased sense of our responsibility to the planet, too. Covid-19 is a symptom of a sick environment: climate change, habitat degradation and the encroachment of people into wild places made the transmission of the virus from animals to humans possible. Unless we change our system radically, we will face other pandemics and other environmental disasters. The Covid-19 crisis has alerted more of the finance community to this reality, and what had been a steady trickle of interest in “environmental, social and governance” (ESG) investments has turned into a flood: ESG investments were up fourfold compared to 2019.
Governments around the world have pledged to invest heavily in a “green recovery” when the virus wanes. President-elect Joe Biden has a $2 trillion green infrastructure plan for the United States, and Boris Johnson says his government will spend £12 billion decarbonising industry and developing green tech and jobs. Making these investments now is not just a question of what will be profitable in the long-term, it’s a question of survival.
If there’s any good news to be taken from this year of hardship and tragedy, it’s really that there is a will to change how our system operates. Our planet needs it – and people do, too. We’ve talked a lot about how Covid has thrown the inequalities of our world into sharp relief, and the countries that have most tolerated rising inequality – Brazil, the US, the UK – have been hit hard by the virus. It should never have taken such devastation to see that change was necessary. To honour our loss we should repair the wrongs that caused it.