This study falls under the sustainability domain. Conventionally, the key issues in business history involved wealth creation (Bergquist 2017:1), which was communicated to shareholders in financial statements. Environmental research followed, based on the impact that wealth creation had on the planet (Bergquist 2017:1). Subsequently, environmentalists and societies pressured entities to disclose non-financial sustainability matters along with these financial statements (Kannenberg & Schreck 2019:515–516; Velte & Stawinoga 2017:276), which caught momentum in large entities from the 1980s onwards (Bergquist 2017:1; KPMG 2020). Stakeholders increasingly focus on companies’ sustainability (Hughen, Lulseged & Upton 2014:57), which is pervasively affected by pandemics.

As part of Neal’s presidential address to the Economic History Association in 2000, he emphasised that research efforts on shocks are much more valuable than research on extended times of normal economic change (Brainerd & Siegler 2003:2). Consequently, this study focuses on pandemic ‘shocks’. Previous studies on pandemics focused on limited effects of a single pandemic within a single industry (e.g. Çiftçi 2022; Gow & Grant 2010; Norouzi et al. 2020; Van Der Merwe, Saayman & Jacobs 2021), whereas this study’s scope is broadened by considering various pandemics, all industries and all the components of sustainability. Furthermore, the disclosure requirements of nine sustainability frameworks were scrutinised, and although they all require comprehensive disclosure, none of these frameworks required pandemic-related disclosure. The sustainability frameworks comprised three well-known South African frameworks (the International Integrated Reporting Framework, the King Code and the Financial Times Stock Exchange/Johannesburg Stock Exchange Responsible Investment Index Series) and six widely accepted international frameworks (the Global Reporting Initiative Standards, the Dow Jones Sustainability Indices, the Organisation for Economic Co-operation and Development Guidelines, the Communication on Progress, ISO 26000 and International Financial Reporting Standards 7). The aim of this study is, therefore, to determine the sustainability elements of companies that are affected by pandemics, which could be useful as a reporting guideline.

Subsequent to corona virus disease (COVID-19) becoming a public health emergency of international concern (World Health Organization 2020), companies from all countries, of all sizes and industries have been severely affected (Fernandes 2020:2; Lynch, Lynch & Cullinan 2020:1). In South Africa, liquidations increased with 78.6% for the 3 months ended April 2021 when compared with the same 3 months the year before (Stats SA 2021:2). The South African Revenue Services estimated tax revenue losses of 15% – 20% for the 2020–2021 fiscal year (Ajam & Davis 2020). An American airline company, United Airlines, reported average daily revenue losses of US$100 million in March 2020 versus the same month in 2019 (Kenny 2020). Consequently, economists estimated that COVID-19 may result in a global loss of USD5.5 trillion within 2 years (Goodman 2020).

Unfortunately, COVID-19 is neither the first pandemic humankind has faced nor will it be the last. Cirillo and Taleb (2020:608) have a record of pandemics commencing as early as 429 BC. Well-known previous pandemics include the Black Plague and the Spanish flu, with HIV/AIDS being an ongoing pandemic (Cirillo & Taleb 2020:608–609; Johnson & Mueller 2002:105). Furthermore, future pandemics are expected, increasing in severity and frequency (Barry 2010; Jones et al. 2008; Oppenheim et al. 2019; Osterholm 2005:1839). The increase in emerging infectious diseases is mainly driven by environmental, socio-economic and ecological aspects, including the combination of an extraordinary number of people and animal numbers, viruses’ continuous genetic changes, exponential increases in foreign travel, increased susceptibility to diseases and climate change (Jones et al. 2008:990–991; Osterholm 2005:1842). As the population increases and companies require more environmental resources, deforestation and a loss in biodiversity occur, which increase the risk of pandemics (Dharani et al. 2020; Singh 2020; Tollefson 2020). The influenza virus is prone to cause pandemics and Barry (2010:11–12) warned against complacency against future pandemics and less than a decade later, COVID-19 emerged.

Jordá, Sanjay and Taylor (2020) performed a study, proving that pandemics’ effects are not merely short-lived, but can be seen for longer than 20 years. In addition to the negative impacts of pandemics on the sustainability of companies (Littman & Littman 1973:16; Quantec 2020), research displays pandemics’ favourable effects, such as a drop in real interest rates and increases in real wages (Jordá et al. 2020:15). Be it good or bad, it is evident that pandemics impact companies’ sustainability, a consideration that is becoming increasingly important to stakeholders (European Commission 2020; eds. Ihlen, Bartlett & May 2011:7; Roberts 1992:599).

Reporting on more than mere financial matters is in line with the stakeholder theory, which was introduced by E Merrick Dodd after the Great Depression (Elson & Goossen 2017). This theory requires consideration of the interest of not only shareholders, but all stakeholders, during decision-making. Any individual affected by an entity’s operations should be considered (Freeman 1984, as quoted by Roberts 1992:597), including the surrounding community, employees, suppliers, customers, the government and public (Adegboyegun et al. 2020:5). The legitimacy theory should also be observed as, in accordance with this theory, companies are not entitled to resources, but are merely one of the parties of society that need to earn access to resources (Deegan 2019:2315). One of the strategies used by entities to prove that they are acting in terms of societal norms is disclosures (Deegan 2002:313, 2019:2310, 2315; Lanis & Richardson 2013:77).

The works of Bossel (1999), being well-accepted (Lektauers, Trusins & Trusina 2010:4), set out three key subsystems to sustainability, namely human (individual, social and government), support (economic and infrastructure) and natural (environment and resource). This formed the basis of what is currently referred to as environmental, social and governance (ESG) data. Consequently, ESG data focuses purely on non-financial matters (Hayat & Orsagh 2015:4). These components are comparable with the three components of triple bottom line reporting set by John Elkington in 1994, being profit, people and planet, which are also widely considered as elements of sustainability (Hourneaux, Da Silva Gabriel & Gallardo-Vázquez 2018:415; Kenton 2021; Lacy et al. 2010:52). Evidently, sustainability consists of both financial and non-financial matters. Consequently, the theoretical underpinning of this study is that sustainability is driven by the stakeholder and legitimacy theory and that an entity’s sustainability is influenced by financial, as well as ESG matters.

The research objective of this study is to review the extant literature for sustainability elements of companies that are affected by pandemics. Setting out a clear research objective is important as the systematic review’s search strategy is derived from it (Christofi et al. 2019b). To minimise bias, exact conceptual boundaries, as well as inclusion and exclusion criteria were set out.

Thematic analysis was conducted on the final sample using Atlas.ti 9, qualitative data analysis software. Thematic analysis follows a structured approach (Jones et al. 2020:38) and aims to generate codes and themes contained in published records (Clarke & Braun 2014:1947; Merriam & Grenier 2019:213). Codes are either set prior to the analysis based on pre-existing theory (deductively), derived from the data (inductively) or by using a combination of the two (Terry et al. 2017:19). For this study, thematic analysis commenced with deductive coding, although most of the codes were created inductively. Following Van Den Berg, Coetzee and Mearns (2020:3), codes were considered for relatedness to explore new information and conceptualise the findings. After following this approach, four main themes were identified, corresponding to sustainability’s four components, being financial and ESG. These themes were divided into three groups depending on the effect on companies’ sustainability, being positive, negative or neutral.

Inter-rater reliability is a key instrument to evaluate reliability, as it measures the extent that coders allocate the same codes to the same data set (Geisler & Swarts 2019:160). Cohen’s kappa is often used as an indicator of inter-rater reliability (Geisler & Swarts 2019:162; Sun 2011:145; Warrens 2011), where a kappa statistic of > 0.8 signifies an almost perfect level of coding agreement between the coders, making the coding highly reliable (Landis & Koch 1977:165; Terry et al. 2017:19). The process involves sharing the developed code book by a minimum of two independent coders to code all or (most often) a selection of the data to determine a level of agreement between the coders (Terry et al. 2017:19). A sample of at least 10% of the data is needed to determine inter-rater reliability (Geisler & Swarts 2019:172). Following Van Den Berg et al. (2020:3), the researchers shared the developed code book with an independent coder and provided an overview of the identification and meaning of the codes and code creation practice. As the final sample constituted 30 articles, six articles’ coding was compared between the two coders, representing 20% of the population. Results indicated a percentage of agreement of 94.9% and a kappa statistic of 0.89, signifying an almost perfect level of coding agreement.

To enhance reliability, findings were triangulated with studies not included in the selected 30, including studies identified during an initial narrative literature review.

This study was approved by the North-West University’s Economic and Management Sciences Research Ethics Committee (study approval number NWU-00884-20-A4) as a minimal risk study as it involves the use of publicly available data.

The vast majority of records (87%) were published during 2020 and onwards (Table 1). Most of the records (83%) focused on COVID-19, with 10% focusing on HIV/AIDS, an ongoing epidemic since 1920 (Cirillo & Taleb 2020:608–609). This shows the increase in the number of pandemic-related publications when the pandemic is active and suggests the increasing interest of stakeholders related to pandemics’ effect on companies’ sustainability. Records were mainly from academic journals (50%) and news articles (47%).

Within all four components of sustainability (financial, ESG), the records included a discussion of pandemics’ positive, negative and neutral effects on companies’ sustainability.

Figure 2 sets out the themes (the four components of sustainability), codes and quotation count and a related discussion, in order of quotation count. The codes also indicate whether the change was positive (+), negative (−) or neutral as it merely indicated change (#). By means of a combination of inductive and deductive coding, a total of 34 codes were created. Most (17) of the codes related to negative effects on sustainability, whereas eight codes indicated positive effects. Two of the codes were considered both positive and negative (+) (−), depending on circumstances and seven codes merely indicated change that occurred (#).

The changes that occurred to the financial and environmental components of sustainability were clear as to whether the effect was positive or negative. This may be because of financial effects being generally measurable, for example, profit during the first 3 months of COVID-19 may be compared with the same 3 months in the preceding year. Similarly, the effect on the environment is physically observable. The social and governance sustainability elements included positive and negative codes, but neutral changes were also observed. Threats to companies’ sustainability forced companies to introduce changes to their approach, which could not simply be classified as either positive or negative.

Similar to how sustainability is an overarching concept requiring consideration of financial, ESG matters, any threat, such as a pandemic, to sustainability would be multifaceted, as displayed in Figure 2. Pandemics lead to several costs. These costs can be directly related to the pandemic itself (such as loss of productivity because of illness and death of employees, which also eventually leads to reduced consumption), as well as indirect costs (governmental responses towards the pandemic) (Ajam 2020:1). The supply and demand shocks that South Africa experienced during COVID-19 were the worst since the 1918 Spanish flu, when manufacturing output dropped by 18% (Ajam 2020:1; Correia et al. 2020:1). Contrarily, Russia refused to decrease their oil production during COVID-19’s lockdown measures, which led to the most sudden price crash in oil prices in nearly 30 years (Nicola et al. 2020:186). These sudden and interrelated supply and demand changes impact the prices of inputs and ultimately output, as well as inflation, wages and foreign currencies (Ajam 2020:1). Job losses and pay cuts were noted within merely a week of COVID-19 (Bartik et al. 2020:17656).

Though the pressures caused by pandemics are severe, opportunities are present and, if capitalised on, increase the plausibility of survival. The anxiety surrounding pandemics also results in an increased focus towards social and environmental issues, as well as the financial viability of companies, urging companies to focus on their sustainability (Selmi et al. 2021:1532, 1535–1537). Emerging trends are fast-tracked especially regarding digitisation and e-commerce, making an online presence vital (Coetzee et al. 2021:8–10). Encouragingly, a positive association between companies with advanced information technology capability and improved financial performance has been found (Arora & Rahman 2017).

Lazurko et al. (2020:379) expect the coming decades to increase in complexity and non-linear change, which may increase the frequency of disruptions like pandemics. Such times of exceptional uncertainty and distress require swift transformation (Selmi et al. 2021:1528), forcing companies to reflect on what happened during the pandemic and to strategise on the way forward (Ward 2020:4).

This study aimed to determine the sustainability elements of companies that are affected by pandemics and a comprehensive list of these elements was established, consisting of matters from all four components of sustainability: financial, ESG. This list therefore adds to the body of knowledge of the sustainability elements of companies that are affected by pandemics. Furthermore, the list serves as a guideline for reporting in times of pandemics, where the discussion provides examples of matters that may be applicable under each sustainability element.

Government-imposed lockdowns result in non-essential operations being halted, leading to supply and demand shocks, which cause volatile product prices. Entities’ finances are further pressured by employee absenteeism obstructing operations, while employee costs continue. Companies are pressed to apply for loans, threatening liquidity. Disaster management strategies are activated to ensure viability, sometimes resulting in retrenchments or reduced salaries, threatening socio-economic targets. Pandemic-related restrictions and economical pressure change consumer behaviour, through a reduction in discretionary spending and an increased demand for non-essential products and services.

Companies’ focus on sustainability during these trying times drives societal and environmental considerations as their interdependence with nature and stakeholders is appreciated. In addition to the key role the private sector played in supporting stakeholders, companies took hands with governments in supporting communities. The health and safety of companies’ stakeholders, especially employees, came to the fore and several companies responded by introducing wellness and counselling programmes.

The necessity to strategise provided companies with opportunities to reduce inefficiencies and explore new business models, with the aim of improving operations. Specifically, pandemics accelerated emerging trends of e-commerce and digitisation, requiring companies to adapt to survive. Work from home arrangements, conducting virtual meetings and training, and other virtual operations, did, however, introduce new legal risks, as companies were required to protect the confidentiality of information.

Companies should use COVID-19 and other previous pandemics as a learning opportunity to accelerate sustainability by adapting their strategy, thereby improving their resilience for future crises (Lake 2022; McKinsey & Company 2022; Seetharaman 2020:1). Strong governance consequently becomes essential, acknowledging the importance of appropriate response in times of pandemics.

A study performed by Elcheroth and Drury (2020:710) highlighted the importance of reiterating joint humanity in the wake of crises. They suggest fair arrangements to share pandemics’ burdens across the boundaries of nations, generations and classes, which would allow a more resilient outcome. Consequently, it would make sense to follow a proactive approach of building good relationships, supported by effective communication, which has proven to be effective in times of uncertainty and crises (Fay & Ghadimi 2020:815; Gazley 2013; Marsen 2020). Having healthy relationships with the public sector will ease collaboration, firstly in supporting the affected country’s individuals, which is also the companies’ stakeholders, and secondly, in making reasonable arrangements for continuing business activities (Child et al. 2020). Having healthy relationships with surrounding communities helps companies to be aware of their concerns, and, if addressed, enhances their social licence to operate (Vanclay & Hanna 2019). Having healthy relationships with suppliers may assist in times of crises as this may allow for flexible payment arrangements (Lake 2022). Having healthy relationships with employees encourages their well-being (Waters et al. 2022:303). Having healthy relationships within the leadership team will assist in effectively strategising a suitable crisis response. This changed approach to the workplace will maximise the contributions of all stakeholders (McKinsey & Company 2022).

The unprecedented nature of pandemics requires boards to be experienced in scenario-building and disaster management. Boards are required to revisit their structure and frequency of meetings and communication to ensure that they stay afloat of current issues and can suitably discharge their responsibilities (PR Newswire 2020h).

The challenging nature of pandemics requires companies to have some financial flexibility with the support of a strong, liquid balance sheet (Acharya, Shin & Yorulmazer 2011:2170–2171). A more conservative approach to financial decision-making may therefore be beneficial, which includes a reduction in inefficiencies and unnecessary costs, while innovation is required to capitalise on opportunities and emerging trends. This study also agrees with the findings of Seetharaman (2020), urging companies to consider their methods of product and service delivery, as well as the characteristics of products and services delivered, potentially requiring expansion in these areas. This is especially true as pandemic-related regulations are more lenient on online and essential products and services.

The recent pandemics sufficiently proved the environmental improvements as companies’ operations declined, encouraging greater consideration of the impact of operations on the surrounding environment and the importance of minimising this as far as possible. Such consideration will increase the ecological balance, which is essential in decreasing diseases (Mofijur et al. 2021:357; Poudel 2020:1).

This study was limited to a systematic review of extant literature, which inherently involves subjectivity in the search process, and specifically in selecting the keywords, search string, and inclusion and exclusion criteria. Consequently, the chosen characteristics set the scope of the study and determine the sample of data included. Of the 30 selected records, 27 discussed the effects of COVID-19, whereas 3 involved a discussion of the effects of HIV/AIDS. This composition of the final sample was different to the researchers’ expectation, as a bigger range of pandemics was expected, especially as no limitations were imposed regarding the timeframe of the studies. The researchers addressed this limitation through triangulating the findings from the 30 analysed records with other relevant records, mainly identified through the initial narrative literature review. Furthermore, Ajam and Davis (2020:1) emphasised the importance of separating the economic consequences of the pandemic itself and the consequences as a result of the policy responses to the pandemic. They observed that the economic costs of the responses to COVID-19 likely exceeded that of the pandemic itself (Ajam & Davis 2020:1). This is another limitation to the study, as the analysed records did not separate these costs. Despite these obstacles, the study provides a thorough overview of the sustainability elements of companies that are affected by pandemics.

Future research may focus on conducting quantitative research on the said research question, as this will assist to quantify the impact that pandemics have on companies’ sustainability elements. Specific inclusion of the various major pandemics that the world has experienced may also provide a different overview of companies’ sustainability elements that are affected by pandemics.