Facts, scenarios, and actions for leaders

Accelerating Climate
Actions in the New
Reality
Version: 22 June 2020

Copyright © 2020 by Boston Consulting Group. All rights reserved. Updated 22 June 2020 Version 11.1.

COVID-19
BCG Perspectives

COVID-19

BCG Perspectives

COVID-19 is a global
societal crisis

Leaders need to drive an integrated
response to navigate the crisis

We at BCG believe that the COVID-19 outbreak isfirst and foremost a societal crisis, threatening
lives and the well-being of our global community.
Society now, more than ever, needs to collaborate
to protect people’s lives and health, manage midterm implications, and search for lasting solutions.

It is the duty of health, political, societal, and businessleaders to navigate through this crisis. A complex
interplay of epidemic progression, medical response,
government action, sector impact, and company
action is playing out. This document intends to help
leaders find answers and shape opinions to navigate
the crisis in their own environments. It encourages
thinking across the multiple time horizons over which
we see the crisis manifesting itself.

Source: BCG

1

Copyright © 2020 by Boston Consulting Group. All rights reserved. Updated 22 June 2020 Version 11.1.

Objectives of this document

COVID-19 will be a journey with three distinct phases, requiring
an integrated perspective
Fight

FutureTypically the initial phase after a pandemic
outbreak–goal is to urgently limit numberof new cases, especially critical care

Finding paths to collectively fight the virus,
restart the economy, and support society inbalancing lives and livelihood

Disease controlled through vaccine/cure/herd immunity and treatment withinsustainable medical capacities possible

Social distancing (lockdown) and partial businessclosures lead to economic recession with large
employment impact

Increasing economic activity with recovering
GDP, some business reopenings, and social
distancing on a sustainable level

Reactivated economy with strong businessrebound and job growth, social restrictions
limited or completely suspended

1. Disease progression, health care system capacity, and response
2. Government policies and economic stimulus
3. Economic scenarios
4. Business engagement and response
5. Public engagement and response

All of the above five factors result in specific economic and social outcomes in each phase
Source: BCG

2

Copyright © 2020 by Boston Consulting Group. All rights reserved. Updated 22 June 2020 Version 11.1.

FlattenCOVID-19 crisis provides a unique opportunity to governments and business leaders to accelerate climate actions and build a green recovery• COVID-19 is expected to drive a ~5-10% drop in CO2 emissions in 2020; however, this drop is very small compared with the required change in trajectory• Annual investment of 1-3% of global GDP is required across countries to meet emission targets for a sustainable 2°C path
• Current stimulus packages to overcome the COVID-19 crisis add up to about $11T globally; less than 5% of the commitments are “green” measures• Governments should focus on five action areas to scale the green recovery: prioritizing sustainability in stimulus strategies, creating green job
opportunities, preparing for job transitions, leveraging blended finance, and rebooting multi-lateralism• Business leaders and investors can support the green recovery by focusing on reducing cost by reducing carbon, scrutinizing supply chains, increasing
resilience to climate risks, actively financing the green recovery, and integrating climate into the investment process
Across countries, efforts to flatten the curve continue; severe global economic downturn expected for 2020
• Globally, 4.2 million patients have recovered from COVID-19; the growth rate of daily new cases is about 2%1• Increase in daily new cases is currently propelled by South America, Asia, and Africa• Vaccine and therapeutics development continues to move at unprecedented pace; 12 vaccine candidates currently in phases I, II and III• Latest economic forecasts from World Bank point to a 5.2% decline in global GDP in 2020; expected to rebound to 4.2% growth in 2021
• Only pharma and semiconductors currently at pre-crisis TSR2 levels; 7 (out of 24) sectors with significant share3 of companies with >15% default risk
• Investors want companies to prioritize ESG4 agenda; net flow in ESG-focused mutual funds and ETFs5 higher than traditional funds

We believe during
this crisis leadersneed to think along
two dimensions:

Taking an integrated perspective on
health/medical progression,
governmental responses, societal
reactions, and economic implications
to understand business/sector impacts

Thinking multitimescale in a
Flatten-FightFuture logic

1. Daily new case growth rate is calculated based on 7-day rolling average; 2. Total Shareholder Return; compared with 21 Feb 2020; 3. Retailing, Materials, Transport, Auto, Real Estate, Energy, Hospitality with > 10%of companies with probability of default > 15% as of 18 June 2020; based on top S&P Global 1200 companies; sectors based on GICS definitions; 4. Environmental, Social, and Governance; 5. Exchange-Traded Funds. 3
Source: BCG

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Executive Summary | COVID-19 BCG Perspectives

Impact of COVID-19 on climate
Call to action for a green recovery

Updated analyses and impact
Epidemic progression and virus monitoring
Economic, business, and climate impact

Copyright © 2020 by Boston Consulting Group. All rights reserved. Updated 22 June 2020 Version 11.1.

Guide for leaders

COVID-19 Impact dashboard
As of 18 June 2020

Economic Impact

8.5M

4.2M

454K

GDP forecasts (%)# of cases# of recoveries# of fatalities

2020

Growth rate1 of daily
new cases# of days of casedoubling2

11 June18 JuneEurope

0.9%

1.7%

US

39

39

# of reported recoveries
as % of total cases

47%# of tests / case31818# of tests / million3

54K

58K

49%

0.7%
1.0%

China

8 10

1.8%

-6.1%

Japan

Banks8Stock market performance11
20 Marvs 21 Feb

-31%

-28%

-30%

-34%

-10%

18 Junevs 21 Feb

-7%

4%

-16%

-10%

-3%

DAX

CHN SSE

S&P500 NASDAQ FTSE100

Total Shareholder Returns (S&P1200)11

5.9%

First column: 21 Feb to 20 Mar; Second column: 21 Feb to 18 June

-3.2%

India

5.8%

Estimated employment impact
Total employment
Employees% of employees
2019 (M)
impacted10 (M)impacted

Americas

EuropeAsia

Pharma-19% 3%-20% -1%-22% 8%F&B12-26% -7%-24% -11%-12% -2%

Telecom-17% -10%-20% -18%-14% -6%

Software-30% -1%-32% -9%-28% 0%

US

159

46

29%

Retail

-42% -7%-36% -13%-24% 12%

UK

33

11

32%

Capital goods-38% -13%-35% -15%-29% -5%

Germany

45

12

26%

Auto

-47% -20%-45% -19%-32% -13%

57

France

28

13

48%

Real Estate-42% -26%-26% -26%-22% -12%

6-21

Italy

23

8

35%

Energy-56% -28%-45% -29%-41% -23%

Spain

20

4

22%

Banks

-41% -25%-44% -35%-26% -13%

VaccineTreatment

Trials in pre-clinicalstage and beyond4

167

137

Trials in Phase 1 andbeyond512

Current est. timeline
for approval & scale-up

months6

9-33

World Bank (8 June)-10 -8 -6 -4 -2 0 2 4 6-9.1%
Baseline 1.0%9-6.1%

Business Impact

months7

1. Growth rate calculated basis rolling 7-day rolling average of new cases; 2. No. of doubling days based on 7-day average growth rate of total cases; 3. Median of values for top 15 countries by nominal GDP (except China); 4. Ongoing trials including pre-clinical, Phase 1 (first trial in humans), Phase 2, Phase 3, Phase 4 ; 5.
Ongoing trials including Phase 1 (first trial in humans), Phase 2, Phase 3, Phase 4; 6. 9-month development current “best case” for first supply (12 months since Apr 2020), then likely to require time for scale-up and continuing to prepare for populations; 7. Remdesivir is approved now, could be more widely available by JulSep 2020. For the next wave, estimated timeline is Oct '20 – April '22 (6-21 months). If first round of drugs being tested succeeds – then 6-9 months; if not – substantially longer; 8. For India, forecast is for financial year; for others, it is for calendar year; YoY forecasts; range from forecasts (where available) of World Bank,International Monetary Fund, JP Morgan Chase; Goldman Sachs, Morgan Stanley; Bank of America; Fitch Solutions; Credit Suisse; Danske Bank; ING Group; HSBC; As of reports dated 12 April 2020 to 18 June 2020; 9. World Bank January 2020 forecast; 10. Available cumulative data as of 18 June 2020 from mid-March 2020;
includes increase in unemployment & employees covered by gov. wage support programs; US: unemployment insurance claims (data as of 13 June); UK no self-employment (data as of April) and Italy (data as of April) active & inactive unemployment; Germany: short-time work requests, may not actually utilized (data as ofMay); France: (data as of June); Spain: (data as of May); figures are changing rapidly and often being reported with a lag from the current date; 11. Sectors are based on Global Industry Classification Standard (GICS) definitions; Performance is tracked for two periods, first from 21 February 2020 (before international
acceleration of outbreak) to 20 March 2020 (trough of the market) and from 21 February 2020 through 18 June 2020; 12. Food & Beverage. Source: WHO, World Bank, JHU CSSE, Our World in Data, IMF, Bloomberg, BCG, Eurostat (Europe), Gov't Wage Support & Unemployment figures & comments: UK Govt 5/12,
Bloomberg 6/16 (UK), ISTAT 4/30 & FitchRatings 5/18 (Italy), U.S. Department of Labor 5/21 (US), Ministerio de Trabajo 6/2 (Spain), Ministere du Travail 6/5 (France), Arbeitsagentur 6/3 (Germany).

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Epidemic Progression

COVID-19 impact has led to largest drop of emissions since World War II;
however, it’s still small compared with overall global emissions
As of 19 May 2020

B tons CO2-equivalent-(5-10)%2

70
60

-7%

50

Annual global emission footprint7:~54B tons CO2-equivalent

COVID-19-2%
Fall ofUSSR

World
War II

Current
trajectory3…but the overall impact is still small

Parispledges4

Transport

21%

Industry

14%

Power

30%

High COVID-19
impact10; but only
4-8% drop in
overall emissions

40
30

-13%

-1%

US Great
Depression

20

-4%

2.0°C
path5

Second Oil
Crisis100
1925Financial
Crisis

1950

1975

2000

2025

1.5°C
path6
2050

Low COVID-19
impact11
Others8
Buildings
LULUCF922%
6%
6%

1. Excluding Land Use, Land Use Change and Forestry (LULUCF); 2. Estimated annualized impact in 2020; 3. Assumes GHG emissions grow from 2018 at same rate as the Current Policies scenario in UNEP 2019 Gap
report to 2050 (1.1% CAGR); 4. Assumes countries decarbonize further at same annual rate that was required to achieve INDCs between 2020 & 2030; 5. Assumes 25% reduction by 2030 and net-zero by 2070;
6.
6
Assumes 45% reduction by 2030 and net-zero by 2050; 7. 2015-19 average; 8. Waste, Agriculture and Fugitive; 9. Land Use, Land Use Change, and Forestry; 10. 36% emissions decline from transport & 20% decline
from industry until Apr 2020; 11. Resulting in 0-2% drop in overall emissions; Source: EDGAR 5.0, FAO, PRIMAP-hist v2.1, Global Carbon Project, IPCC, UNEP Emissions Gap Report, WRI, Nature – May 2020, BCG.

Copyright © 2020 by Boston Consulting Group. All rights reserved. Updated 22 June 2020 Version 11.1.

5-10% drop in greenhouse gas emissions1, largest since World War II…

Unchecked climate change continues to pose a catastrophic economic
and physical threat to society
As of 18 June 2020

Cities at risk

570

Damages on the rise
Annual climate-related
damage1 by 2050

People potentiallydisplaced by 2050

200M

$8T

2x-4x
Increasing frequency of
extreme weather
Increase in yearly weather
catastrophes since 1980
1. Damage by increased drought, flooding & crop failures will hamper growth & threaten infrastructure
Source: The Economist - Aug 2017; The Guardian - Apr 2016; NBER - Aug 2019; Scientific - Dec 2012,
EIU; PNAS - Jun 2019; MunichRe - Feb 2020; Climate Central - Oct 2019; C40 Cities - Jan 2020

10-30%
Economic slowdown
Global loss in GDP by 2100
(relative to no global warming)

7

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Potential displacement

Cities likely to be affected by
0.5m sea level rise by 2050;
1-2m rise over the next century

Governments need to make significant investments to meet emission targets;strong global public support for climate actions visible
As of 20 April 2020

2050 Greenhouse gas emissions

Required investment1(B tons CO2-equivalent p.a.)(% of GDP p.a.)Strong public support for climate actions visible
Ipsos survey: Is it important that government actions
prioritize climate change?2

Parispledges

2°C path

2°C path

India

7.3

3.8

1.5-2%

India

81 %

China

13.3

3.7

1.5-2%

China

80 %

Brazil1.2

0.5

1.5-2%

BrazilRussia

2.2

0.5

≥ 4%

Russia60 %Germany

0.5

0.06

1-1.5%

Germany

57 %

US

5.6

1.3

1-1.5%

US

57 %

World

50.0

17.3

1-3%

World

“Strongly agree/tend to agree”

66 %

65 %

1. Investment depends on current emission volume & sector mix, ambition, GDP; investment to reach Paris pledges not included, but small in comparison 2. Survey results, April 2020; Full question: To what extent
do you agree or disagree with the following: In the economic recovery after COVID-19, it is important that government actions prioritize climate change?; n = 500 to 1,000 per country; total of 28,039 online
respondents aged 16–74; fieldwork dates 17-19 April 2020. Source: Ipsos MORI, World Bank; BCG

8

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Imperative for governments to push required investments

As stimulus measures continue to unfold, imperative for government
leaders to push the green ambition further
Current global annual green investments well below
requirements to reach 2.0°C path

As stimulus measures unfold,
further potential4 to push green ambition

Current annual global government & corporate investments

Current global stimulus package5 (G20) & green stimulus allocation~$11.0T~$1.8-4.0T2~$2.2T$0.6T
Current1~$0.4T~$1.8T
Requiredfor 2°C path3

Global stimulus
measures5

Global green
stimulus measures6

1. Average for year 2017-18; 2. Includes both adaptation (adjusting to the expected effects of climate change) and mitigation (reducing emissions); 3. Through 2050, year-on-year adjusted for inflation; 4. 'Potential' isdefined as design of the stimulus package to allocate more share to green measures & further tranches of stimulus; 5. Data is represented for G20 countries, excl. India; EU figures still pending member state
approval; 6. 'Green stimulus' defined as direct investments that also serve a strong environmental purpose; green stimulus countries include Canada, US, Australia, Germany, Italy, France, UK, European Union,
China, South Korea; green stimulus measures are in addition to current annual investment shown on left-hand side. Source: The Climate Policy Initiative (CPI), IPCC, GCA, Vivid economics, BCG
9Copyright © 2020 by Boston Consulting Group. All rights reserved. Updated 22 June 2020 Version 11.1.

As of 18 June 2020

Leaders have started to initiate actions to build green recovery
into their COVID-19 response

At LEAD on Climate 2020, 300+
Business leaders tell congress: wecan build back better

South Korea: Moon pledges tosafeguard jobs, industries with“Green New Deal”

Green recovery: Germany unveils
plan for €40B climate spending
surge

India’s IREDA has set aside ₹100B
for renewable energy projects in2020

Large global investor to begin
abandoning companies heavily
invested in thermal coal

Post-pandemic “green shift” intransport could create up to 15
million jobs worldwide
10

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As of 18 June 2020

Priorities for key stakeholders to achieve the green ambition

Governments

B

Business leaders & investors

01

Prioritize sustainability in stimulus strategy

01

Reduce cost by reducing carbon

02

Focus on green job creation opportunities

02

Scrutinize supply chains

03

Prepare for job transitions

03

Increase resilience to climate risk04

Leverage blended finance

04

Finance the green recovery

05

Reboot multi-lateralism

05

Integrate climate into investment process

Source: BCG

11

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A

01

02

03

04

05

Prioritize
sustainability instimulus strategy

Focus on green
job creation
opportunities

Preparefor job transitions

Leverage
blended financeRebootmulti-lateralism

Focus on both
decarbonizing existing
sectors and funding
green growth sectors

Prioritize green recovery
investments andprograms by job creation
potential

Prepare to manage a'just transition' of theworkforce towards azero carbon economy

Combine public andprivate funding toalleviate constraints

Drive a coordinatedclimate response
globally; ensure
equitable resourcing

Weave in green stringsin stimulus packages(e.g., climate disclosure
standards, sustainability
targets)

Balance measuresthat address both
mitigation andadaptation

Recognize that some
sectors would haveradically changed once
economies restart1;
actively drive reskilling

Set up project-capitalmatching platforms2

Focus on global public
goods3Deep-dive on following pages
1. Once economies restart, millions of people will go back to work - some into sectors that have been radically changed, e.g., lower carbon sectors growing and some high carbon sectors shrinking; 2. For example, trusted 3rdparties who help match demand for capital to supply through aggregating and screening climate projects; 3. Protecting natural carbon sinks such as forest, joint investments in promising emerging decarbonization technologies,
cooperation and support in areas such as funding and technical capacity; Source: BCG
12

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A

Governments | Five priorities to scale a green recovery

Prioritize sustainability in stimulus strategy | Need to incentivize
decarbonizing existing sectors and promising new green technologies

A1

Existing sectors: Canada intertwined support tooil & gas industry with sustainability ambitions

New technologies: Germany allocated part of stimulus
to promising hydrogen technology$750M

Emission Reduction Fund ('ERF')
set up to support workers and reduce
emissions in the oil & gas sector€9B€7B allocated to national hydrogen strategy
for cutting emissions; €2B additional funding
for foreign trade partnerships$1.7B

Cleanup of orphan & inactive oil & gas wells;
grants for environmental site assessment,
remediation and reclamation

10GW

Industrial scale electrolyzers capacity by
2040; additional on- & offshore windexpansion to supply new electrolyzers

Large companies receiving federal loansmust report how they are contributing
to Canada’s goal of net zero by 2050

Hydrogensubsidies

Dedicated policy instruments such as
subsidies for ‘H2-ready’ CHP1 plants,
carbon contracts & EEG2 levies

2050
Net zero

1. Combined Heat & Power; 2. ErneuerbareEnergienGesetz i.e., Feed-in Tariffs for Renewable Energy
Source: Neue Zürcher Zeitung, DW, Euractiv, Forbes, BCG

13

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As of 18 June 2020

Focus on green job creation opportunities | Multiple sectors can bere-shaped to drive long-term 'greening' of the economy

A2
ExampleMultiple climate opportunities exist to boost growth in jobs

Mitigation
Potential

Synthetic fuels forshipping & aviation

CCUS1, Green hydrogen

Large-scale renewables

Sustainable agriculture2

Industrial efficiency

Law aimed at investment ineconomic future &macroeconomic recovery

Direct air capture

Other renewables4

Grid expansion

Alternative materials3

Nature Based Solutions5EV6 infrastructure$90B invested in clean energy9
and related technologies led tojob uptick(Job growth &CO2 impact)

Speed (Job creation & CO2 impact)~900K

New job-years10
in clean energy9~15%

Clean jobs as% of new jobs10

Complement job growth potential with high impact Adaptation investments, e.g.
Upgrade coastal city infrastructure

Technology-driven crisis response systems

1. Carbon Capture, Utilization, and Storage; 2: Based on leveraging technology to improve traditional levers such as irrigation, fertilizer use, crop rotation, pest control,
storage etc.; 3. Alternative building materials; 4. E.g., biomass, biogas, small scale solar/ wind projects; 5. Includes supporting afforestation & reforestation measures, wetland
restoration, etc.; 6. Electric vehicle; 7. Global Financial Crisis; 8. American Recovery & Reinvestment Act; 9. Renewable Generation, Energy Efficiency, Transit, Grid
Modernization, Advanced Vehicles & Fuels, Carbon Capture; 10. A full-time job for one person for a year (between 2009 and 2015)
Source: US Executive Office - A Retrospective Assessment Of Clean Energy Investments In The Recovery Act, US Bureau of Labor Statistics, BCG

14

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Non-exhaustive

Post GFC7, 2009 Recovery
Act8 in the US led to clean
energy job uptick

B

01

02

03

04

05

Reduce cost by
reducing carbon

Scrutinize
supply chains

Increase resilience
to climate risk

Finance thegreen recovery

Integrate climate into
investment process

Expedite energy
efficiency programs &switch to renewableenergy to realize
significant savings

Create transparency into
supplier emissions andintroduce CO2 into
procurement & supply
chain reconfiguration
decisions

Decarbonize portfolios
and build resilience to thephysical, regulatory, anddemand risks induced by
global warming

Apply a lens of climaterelated risks &opportunities whenfinancing COVID-19
recovery efforts3

Emphasize importance ofclimate in investment
allocation and stewardship
activities

With restart, actively
look at ways of working
to reduce carbon
footprint

Commit suppliers to
rigorous efficiency andemission reduction targets

Priorities for Business Leaders

Drive improvements in
ESG1 performance, whichinvestors are increasingly
rewarding2

Scale investments inclimate-related portfolios

Push adoption of climaterelated disclosures(e.g. standardized ESG1
reporting); integrate climate
risks into credit models

Priorities for Investors

Deep-dive on following pages
1. Environmental, Social, and Governance; 2. ESG exchange-traded funds have fared significantly better during the crisis so far; 3. Investors can bring a green lens when supporting economies to restart and rebuild
after CoVID-19 – through green bonds and other instruments Source: BCG

15

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Business Leaders and Investors | Five priorities to support a green recovery

Reduce cost by reducing carbon | Expediting efficiency and renewableenergy programs provides a good starting point for emission abatement

B1
ExampleAbatement costs & potential trade-off

Oil & Gas company
implemented emission
reduction programs

Green
PPAs2

Biomass forBlue H2
steam/heat from tail gas

Blue H2 Carbon capture Green H2from flue gas & storage

Evaluated 200+ existing and newtechnologies for decarbonization

200

Developed concrete CO2 reduction
opportunities for individual refineries

0

3.0

1.5

7.5

Abatement potential in 2025 (M tCO2e p.a.)-100
On-sitesolar
PVEnergyefficiency
levers3

Efficiency~25%

Reduction inemissions targetedby 20254$1B+

Investment planned
for CO2 reduction
initiatives

Opportunity for reducing costby reducing carbon
Renewable power

Fuel switch

HydrogenCCUS

3

1. Represents an average size factory in cement/steel/refining/chemical industry; 2. Power Purchase Agreements; 3. Carbon Capture, Utilization &Storage; 3 Improvements in process heating, process energy, pumps, compressors; 4. Compared to baseline year 2019
Source: BCG

16

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Abatement costs for a hypothetical factory1 in $/tCO2e

Scrutinize supply chains | Critical for companies to drive transparency into
supplier emissions and introduce CO2 into procurement decisions

B2
ExampleRatio of supply chain emissions to own direct emissions

Global automotive mfg.
supported suppliers2 todrive transparency
10.9

Hospitality

7.9

Manufacturing

6.5

F&B1, agriculture

5.9Services

5.9

Biotech, healthcare & pharma

5.8

Transportation services

2.1

Apparel

2.1

Materials

1.3Power generation

1.3

Fossil fuels

Increased transparency on share of
renewables in energy consumption
Introduced ESG3 in supplierevaluation to drive suppliers to takeCO2 emissions reduction measures

4.8

Infra

On average, companies reportgreenhouse gas emissions fromtheir supply chain 5.5 x greaterthan their own direct impact
from emissions

0.4

Created centralized reporting on
emissionsØ 5.5

1. Food & Beverage; 2. Suppliers who participate in the Carbon Disclosure Project (CDP) Supply Chain Program; 3 Environment, Sustainability andGovernance (ESG); 4. In 2019; Source: CDP Supply Chain Report 2018/2019, BCG

30M+
tons

of CO2 emissions
reduced by suppliers
participating in the
program4
17

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RetailCOVID-19 crisis provides a unique opportunity to accelerate climate actionsin the new reality
Industry
digitalisation

Improved air quality &environment

Sharedmobility
ecosystems

Other RE and EE
technologies

Other RE1 andEE2 technologies

Increased well-being of
the wider
populationof
Industry Increased
well-being
digitalisation

the wider population

Grid Infrastructure

UpgradesGrid infrastructure
upgrades'ClimateSmart'
agriculture

Growing green
consumerism

Growing green
consumerism

charging
infrastructure

Distributed
Solar
Smart home,
Installation

intelligent
power systems'Climate-Smart'
Agriculture

Smart HomeIOT Devices

Electric vehicle
Electric
Vehicle (EV)assemblyhub
assembly hub for SEA

1. RE = Renewable Energy; 2.EE = Energy Efficient; 3. EPC = Engineering, Procurement, Construction; 4. Operations and Maintenance; 5. Electric Vehicle

Copyright © 2020 by Boston Consulting Group. All rights reserved.

Large scale
Large
Scale EPC3
solar
Solar EPC
4
and and
O&M O&M

Public EV5
charging
Public EV
infrastructure18

Impact of COVID-19 on climate
Call to action for a green recovery

Updated analyses and impact
Epidemic progression and virus monitoring
Economic, business, and climate impact

Copyright © 2020 by Boston Consulting Group. All rights reserved. Updated 22 June 2020 Version 11.1.

Guide for leaders~4.2M reported recoveries so far;growth rate of daily new cases at ~2%1

EPIDEMIC PROGRESSION& VIRUS MONITORING

As of 18 June 2020

Russia04th June'20

UK
France Italy
China

18th June'20

Japan

India

117K

124K

(∆2.3%)(∆0.9%)

139K(∆1.7%)# of daily new cases (growth rate%)1
BrazilSouth
Africa36
8
days

Daily cases' growth (≥100 daily cases)1
Less than 100
daily cases1

185Countries with cases3

<-5%

8.5M

-5%-0%[∆1.8%]4

Confirmed cases globally

39
12
days

39
12
days

# of days of case doubling2 globally
0-5%

454k

>5%
2.9M

3.5M

4.2M

(43%)

(47%)

(49%)

[∆1.1%]4

Fatalities globally

Total # of recoveries (as % of confirmed cases)

Note: Continued cases and fatalities are subject to different testing, propensity, reporting standards and hence are imperfect measures
1. # of daily new cases calculated as 7-day rolling average; growth rate calculated basis 7-day average; 2. No. of doubling days calculated basis 7-day average growth rate of total cases; 3 Basis Johns Hopkins
CSSE; 4. Daily growth rate basis 7-day average
Source: Johns Hopkins CSSE; Our world in data; BCG

20

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Spain

USA

11th June'20

Daily new cases are increasing globally;
propelled by South America, Asia, and Africa

EPIDEMIC PROGRESSION& VIRUS MONITORING

As of 18 June 2020

Several European and North American countries
continue to improve doubling rate…
Daily growth rate of total cases (seven-day average)
6%

140,000

Chile
S Africa

5%

Argentina

Kenya

4%
3%

120,000

Cases doubling:
14 days
Nigeria
Cases doubling:
21 days

Egypt

Colombia

South
America

100,000
India

MexicoGhana

Brazil

80,000Asia

60,0002%
1%

Belgium
S KoreaFight

Daily cases (seven-day rolling average)

0%
1,000

AustraliaJapan

10,000FranceRussiaIranUS
Canada Turkey Germany
UK
China
Italy
Spain

100,000

1,000,000

North
America

40,00020,0000AfricaEurope

Mar

Apr

May

18 JuneNorth America

EuropeCumulative number of confirmed cases (log scale)South America

Asia

Africa1. Includes Middle East & Oceania
Source: Johns Hopkins CSSE; Our World in data; BCG

North America

EuropeSouth America

Asia1

Africa21

Copyright © 2020 by Boston Consulting Group. All rights reserved. Updated 22 June 2020 Version 11.1.

Rates improving from top to bottom

Flatten... but countries in South America, Asia, and Africa
witness an increase in daily new cases

EPIDEMIC PROGRESSION& VIRUS MONITORING

Epidemic progression snapshot

Data shown only for G20 countries with 100+ daily new cases

Daily cases
Growth of daily new cases1

Cumulative cases

Testing

Daily Cases/M

Total cases

RecoveryNew cases per
million population2

In thousands% of total cases

Test/casecurrent value3
100Turkey

5.6%

16

183

85%

Argentina

5.1%

30

36

29%

S Africa

4.9%

60

80

54%

KSA

4.6%

119

141

64%

9
9

Indonesia

2.3%

4

41

39%

India

2.1%

8

367

54%

Mexico

1.3%

34

160

74%

US

1.3%

70

2,163

27%

Italy

1.0%

5

238

76%

Russia

-0.4%

58

553

56%

Brazil

-0.4%

123

955

55%

UK4

-1.7%

19

299

Germany

-1.7%

4

188

92%

France

-1.8%

7

158

38%

10

100

63%

Canada

-5.5%

15

\

7

2 weeks ago
20
30

\

\

16

\

\

\

16
3

\

\

12

\

20

\

\

\

28

2
\

13
25

\

\

9
\

23

1. Growth rate calculated basis 7-day rolling average of new cases; 2. 7-day rolling average; represented scale rounds up daily case/m to next 10th place; 3. Test/case data is not updated daily for a few countries,
data represented is within last 1 week; 4 UK recovery data not available; Source: Our World in Data, John Hopkins, Worldometers, BCG

22

Copyright © 2020 by Boston Consulting Group. All rights reserved. Updated 22 June 2020 Version 11.1.

As of 18 June 2020

Vaccine fast movers | 12 vaccine candidates already in clinical trials

EPIDEMIC PROGRESSION& VIRUS MONITORING

1

Phase II/III

2

Phase II

Oxford Univ. & AstraZeneca

CanSino Biologics

ModernaPhase III recruitment underway;
planned supply build-up of 400M+
doses by end of year (if approved)

Phase II advancement sinceApr 2020; follow-up expectedby Oct 2020

FDA fast track designation in May
2020; Phase III on 30,000 patientsplanned for July 2020

45Phase I/II

BioNTech & Pfizer

China National Biotec1

Phase I/II data exp. by July 2020,
Phase II trial in June 2020;
with start of Phase III; distribution expected completion of final
possible by Dec 2020 (if approved) trials by Nov 2021

Novavax

SinovacPhase I/II started in May 2020;
data expected in July 2020 andfinal completion by Nov 2021

Phase II trial in June 2020;
expected completion by
Aug 2020

Phase I

Chinese AMS2CureVac3
Imperial College London4
Inovio5Gamaleya Institute6

1. Listed as two candidates by WHO: Beijing institute of Biological Products / Sinopharm & Wuhan Institute of Biological Products / Sinopharm; 2. Chinese Academy ofMedical Sciences and Institute of Medical Biology; Trial started in Mar 2020 with final completion expected by Apr 2021; 3. Phase I starting in June 2020; 4. Phase I fundedby UK Government started June 15th 2020; 5. Phase I initial data expected in June 2020; Phase II/III trials start July/August 2020; 6. Called Gamaleya Research Institute; Trial
started in June 2020 on 76 patients in Russia. Source: WHO (June 16th), Citeline Pharma Project (June 18th), Milken Institute (June 17th), Telegraph, Bloomberg, BCG

155

Pre-clinical

167

Total

"By the beginning of 2021, we
hope to have a couple ofhundred million doses. I'm
cautiously optimistic with themultiple candidates we havewith different platforms."
Dr. Anthony Fauci, Member, WhiteHouse Coronavirus Task Force
Movement across phases, or update on
on-going trial; in the last two weeks

23

Copyright © 2020 by Boston Consulting Group. All rights reserved. Updated 22 June 2020 Version 11.1.

As of 18 June 2020

Economic forecasts point toward severe downturn in 2020;
rebound of global GDP not expected before 2021

ECONOMIC, BUSINESS,& CLIMATE IMPACT

As of 18 June 2020

GDP level forecast1

GDP growth forecast vs. baseline(Global forecast: -5.2%)4-10% -8% -6% -4% -2% 0%
Forecast -6.1%

2%

4%

6%

8% 10%

2021(Global forecast: 4.2%)4-10% -8% -6% -4% -2% 0%Baseline 1.8%

2%

4%

6%

EOY 2021 vs. EOY 20198% 10%

1.7% 4.0%

US

97-100%
Forecast range
-9.1%

1.0%

1.3%

4.5%

Europe96-99%
1.0%

5.9%

5.8% 6.9%

China

107-112%
-6.1%

0.7%

0.6% 2.5%

Japan

96-99%
-3.2%

5.8%

3.1%

6.1%

India2101-108%
Forecast World Bank (Jun 2020)

Baseline World Bank (Jan 2020)

Forecast range banks3 + IMF

Last week's forecast range (onlyshown if change is significant)Note: As of reports dated 31 March 2020 to 18 June 2020, YoY forecasts 1. Range calculated with 25th & 75th percentile values of forecast range; 2. For India, forecast is for financial year; for other countries, theforecast is for calendar year; 3. Range from forecasts (where available) of World Bank, International Monetary Fund (April 2020), Goldman Sachs, JP Morgan Chase; Morgan Stanley; Bank of America; Fitch
Solutions; Credit Suisse; Danske Bank; ING Group; HSBC; 4. Based on World Bank forecast Jun'20; Source: Bloomberg; World Bank; IMF; BCG

24

Copyright © 2020 by Boston Consulting Group. All rights reserved. Updated 22 June 2020 Version 11.1.

2020

Only Pharma and Semiconductors currently at pre-crisis TSR levels;
7 sectors with significant share1 of companies with >15% default risk

Based on top S&P
Global 1200 companies

As of 18 June 2020

Categories based on TSR & net debt/enterprise value2

Healthier sectors

Pressured sectors

Vulnerable sectors

Pharm aSem iconductors
Household Products
SoftwareTech Hardware
Retailing
Food/staples Retail
Materials
Health Equipm ent
Food & BeverageProf. Services
TelecomMedia
Capital Goods
Financials
Utilities
Transport
Auto
Durable Goods
Insurance
Real Estate
Banks
EnergyHospitality

21 Feb 2020
- 18 June 2020
1%
0%
-1%
-4%
-4%
-6%
-6%
-8%
-8%
-8%
-9%
-10%
-11%
-13%
-13%
-14%
-15%
-15%
-17%
-21%
-25%
-25%
-28%
-29%

Companies with probability of default >15%4
04 June 2020
- 18 June 2020

21 Feb 2020

18 June 2020

0%
0%
0%
9%
0%
0%
0%
4%
0%
0%
0%
0%
0%
2%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%

0%
0%
0%
8%
0%
35%
0%
11%
0%
0%
0%
8%
8%
4%
0%
0%
32%
24%
0%
0%
17%
4%
21%
21%

Note: Based on top S&P Global 1200 companies; Sectors are based on GICS definitions; 1. Retailing, Materials, Transport, Auto, Real Estate, Energy, Hospitality with > 10% of companies with probabilityof default > 15%; 2.Net debt & enterprise value from latest available balance sheet; Categories defined based on comparison with S&P Global 1200 median: healthy = TSR & debt/EV > median, pressured= TSR or debt/EV < median, vulnerable = TSR & debt/EV < median; 3. Performance is tracked for two periods, first from 21 February 2020 (before international acceleration of outbreak) to 20 March 2020
(trough of the market) and from 21 February 2020 through 18 June 2020 based on median; 4. Implied by 5-year Credit Default Swap based on median
Source: S&P Capital IQ; BCG ValueScience Center; BCG

04 June 2020
- 18 June 2020

Pos. trend ≥ 2%
No sig. change
Neg. trend ≥ 2%25

Copyright © 2020 by Boston Consulting Group. All rights reserved. Updated 22 June 2020 Version 11.1.

TSR performance3
21 Feb 2020
- 20 Mar 2020
-20%
-30%
-16%
-30%
-26%
-40%
-10%
-32%
-31%
-23%
-30%
-17%
-36%
-35%
-35%
-30%
-34%
-41%
-39%
-39%
-39%
-39%
-52%
-44%

ECONOMIC, BUSINESS,& CLIMATE IMPACT

Drop in emissions witnessed due to slowdown in surface transportand economic activity is reverting to pre-COVID-19 levels

ECONOMIC, BUSINESS,& CLIMATE IMPACT

As of 11 June 2020

1 Jan

1 Feb

1 Mar

1 Apr

1 May

1 Jun

0%
China

US

-5%

India
Russia

-10%

Japan

Germany
Rest of theworld

As countries restart, global CO2
emissions are reverting• from a drop of 17.3% in early-Apr• to a drop of 4.5% in mid-Jun
Changes in surface transport
contributed to ~50% of the drop
Annual drop in emissions to range
from 5-10%, depending on restartvariations across the world
Emissions rebound is a stark
reminder that more needs to bedone to tackle climate change-15%

Peak drop of 17.3%

1. Mean 2009 emission of 100 Mtons / day is taken as base and 0% value. Data on the chart, thus, is analogous to Mtons/day
Source: Integrated Carbon Observatory System, Mature Climate Change, Global Carbon Project, The New York Times

26

Copyright © 2020 by Boston Consulting Group. All rights reserved. Updated 22 June 2020 Version 11.1.

Daily drop1 in CO2 emissions (%) during the year 2020

Investors want companies to prioritize ESG1 agenda; net flow in ESGfocused mutual funds & ETFs2 higher than traditional funds
As of 07 June 2020

As of 3 June 2020

BCG COVID-19 investor
pulse check

ESG1 funds show higher net flows than traditional ones

ECONOMIC, BUSINESS,& CLIMATE IMPACT

Cumulative net flow rate of mutual funds & ETFs2; % of end of year 2019 assets under management

Net flow rate51%
of investors believe
companies should fully
pursue their ESG1 agenda as
they navigate the crisis

24%
20%
16%

~25%

12%
8%
4%
0%

Investors (%) who agree that “it isimportant for healthy companies tocontinue to fully pursue their ESG1
agenda and priorities as theynavigate the crisis, even if it means
guiding to lower earnings per shareor delivering below consensus”

-4%
1 Jan

~4%
1 Feb
ESG ETFs

1 Mar
Traditional ETFs

1 Apr
ESG Mutual Funds

1 May

1 Jun

Traditional Mutual Funds

1. Environmental, Social, and Governance; 2. Exchange Traded Funds;
Note: ESG funds aim to reflect investors' moral and ethical values through investments screened for or based on issues including the environment, alcohol, gaming,
tobacco, civil/human rights, religious views, etc. Traditional funds are any other ETFs not considered sustainable; Analysis based on US, European (incl. offshore)and Asian (Japan, South Korea & Thailand) mutual fund & ETF products; Data reported represents ~60% of total US, ~75% of total European and ~75% of Asian
country subset (~45% of total Asia [excl. China and Australia]) mutual fund & ETF market AuM; Money market funds excluded; Source: BCG's COVID-19 Investor
Pulse Check, June 7, 2020; n = 150; Strategic Insight – Simfund; BCG analysis

27

Copyright © 2020 by Boston Consulting Group. All rights reserved. Updated 22 June 2020 Version 11.1.

28%

Additional perspectives on COVID-19
Selected publications

Edition #10

Edition #9

Edition #8

Climate & Environment

Climate & Environment

Climate & Environment

Value Protection &Acceleration Roadmap to
Win in the New Reality

Future of Global Tradeand Supply Chains

Galvanizing Nations for
the New Reality

Climate Should Not Be
the Virus’s Next Victim

Why Climate Change Is No
Prisoner’s Dilemma

The Net-Zero Challenge:
Fast-Forward to Decisive
Climate Action

Edition #7

Edition #6

Edition #5

Urban Infrastructure

People & Organization

Social Impact

Sensing Consumer
Behavior & Seizing
Demand Shifts

Restructuring Costs, andManaging Cash andLiquidity

Revamping
Organizations for the
New Reality

How COVID-19 Will ShapeUrban Mobility

Meetings and Email Are
Here to Stay, So Make
the Most of Them

Unlocking Tomorrow’s
ESG Opportunities

Edition #4

Edition #3

Edition #2

Healthcare

Public Sector

Agriculture

Accelerating Digital &Technology
Transformation

Emerging Stronger fromthe Crisis

Preparing for the Restart

Learning from COVID-19
to Transform Global
Health Systems

Generating the Right
Returns from Stimulus
Packages

Signs of Rebound Forecast a
New Era for Agriculture

Source: BCG, World Economic Forum

28

Copyright © 2020 by Boston Consulting Group. All rights reserved. Updated 22 June 2020 Version 11.1.

COVID-19 BCG Perspectives

Disclaimer

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The services and materials provided by Boston Consulting Group (BCG) are subject to BCG's Standard Terms(a copy of which is available upon request) or such other agreement as may have been previously executed by BCG.
BCG does not provide legal, accounting, or tax advice. The Client is responsible for obtaining independent advice concerningthese matters. This advice may affect the guidance given by BCG. Further, BCG has made no undertaking
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