Skip to main content
MENU
Subscribe
  • Login
  • My Account
  • Logout
  • Register For Free
  • Subscribe
  • Topics
    • Alternatives
    • Artificial Intelligence
    • CIOs
    • Consultants
    • Defined Contribution
    • ESG
    • Face to Face
    • Hedge Funds
    • Industry Voices
    • Investing
    • Money Management
    • Partner Content
    • Private Credit
    • Pension Funds
    • Private Equity
    • Real Estate
    • Regulation
    • Special Reports
    • Washington
    • White Papers
  • International
    • U.K.
    • Canada
    • Europe
    • Asia
    • Australia - New Zealand
    • Middle East
    • Latin America
    • Africa
  • Rankings & Awards
    • 1,000 Largest Retirement Plans
    • Top-Performing Managers
    • Largest Money Managers
    • DC Money Managers
    • DC Record Keepers
    • Largest Hedge Fund Managers
    • World's Largest Retirement Funds
    • Best Places to Work in Money Management
    • Excellence & Innovation Awards
    • WPS Innovation Awards
    • Influential Women in Institutional Investing 2024
    • Eddy Awards
  • Resource Guides
    • Active Thematic Global Equities
    • Retirement Income
    • Fixed Income
    • Pension Risk Transfer
    • Pooled Employer Plans (PEPs)
  • ETFs
    • Latest ETF News
    • Fund Screener
    • Education Center
    • Equities
    • Fixed Income
    • Commodities
    • Actively Managed
    • Alternatives
    • ESG Rated
  • ESG
    • Latest ESG News
    • The Institutional Investor’s Guide to ESG Investing
    • ESG Sustainability - Gaining Momentum
    • ESG Investing | Industry Brief
    • Innovation in ESG Investing
    • ESG Rated ETFs
    • Divestment Database
  • Defined Contribution
    • Latest DC News
    • The Plan Sponsor's Guide to Retirement Income
    • DC Money Manager Rankings
    • DC Record Keeper Rankings
    • Innovations in DC
    • DC Plan Design: Improving Participant Outcomes
  • Searches & Hires
    • Latest Searches & Hires News
    • Searches & Hires Database
    • RFPs
  • Research Center
    • The P&I Research Center
    • Earnings Tracker
    • Endowment Returns Tracker
    • Corporate Pension Contribution Tracker
    • Pension Fund Returns Tracker
    • Pension Risk Transfer Database
  • Careers
  • Events
    • View All Conferences
    • View All Webinars
  • Print
Breadcrumb
  1. Home
  2. ESG
June 01, 2020 12:00 AM

Aftermath of coronavirus seen to radically change ESG focus

Hazel Bradford
  • Tweet
  • Share
  • Share
  • Email
  • More
    Reprints Print
    Andrew Behar
    Andrew Behar believes science and data will lead future decision-making.

    While climate change dominated many annual shareholder meetings so far this year, issues raised by the coronavirus pandemic, such as the treatment of workers and corporate boards' responses to the crisis, are expected to feature prominently in 2021.

    "We are learning things from COVID that are going to be applied to all of business," said Andrew Behar, CEO of As You Sow, a non-profit organization promoting environmental and social corporate responsibility through shareholder advocacy and coalitions. He predicts a shift toward more fact-based business decisions, whether they're addressing greenhouse gas emissions or income inequality.

    "If there is anything to learn from COVID, it is to make your decisions based on science and data," he said.

    Shareholder activists also will be watching closely at next year's meetings to see how BlackRock Inc. and other large asset managers implement the Business Roundtable's new approach to defining a corporation's purpose, shifting from a sole focus on shareholders to one that considers all stakeholders, including employees, customers, suppliers and communities, he said.

    Announced in August 2019 by the non-profit group made up of CEOs of leading companies, the change represents a marked departure from a policy in place since 1997 that corporations exist principally to serve shareholders.

    "This is the biggest change in business in 100 years," Mr. Behar said. His organization's resolution at BlackRock's annual meeting May 21 called for the company to report on how it will implement the change and earned enough votes to be brought to BlackRock shareholders in 2021.

    "This is not going to be an overnight transition but it's one that is going to change companies in so many ways. We have a whole year to discuss and debate," Mr. Behar said.

    Data tracking key

    Martin Whittaker, CEO of JUST Capital, an independent non-profit that tracks company performance on multiple stakeholder issues, said that, given the immediate demands on companies caused by the crisis, the timing for gathering data and tracking issues like hazard pay "is not great, but next year it will be."

    Ahead of the 2021 proxy season, JUST Capital will track what happens over the coming months to both executive and worker wages, and the gap between the two. JUST Capital's latest CEO pay analysis found that only one-third of companies have announced executive compensation cuts, while more than two-thirds of those companies have announced furloughs or layoffs. However, 73% of adults responding to a JUST Capital survey conducted with The Harris Poll April 29-30 say companies should sacrifice short-term profits before letting employees go.

    See more of P&I's coverage of the coronavirus

    "In our polling, we hear less about executive pay as a number and more about the relative degree of compensation, and if companies have done well (during the crisis) but not taken that capital and invested in their workforce," Mr. Whittaker said. "Our sense from the data is that companies that do in fact invest in their workers perform better. We are entering a period where all of that matters a lot more. It's game time," he said. Rising unemployment "is a big deal and we are going see a minimum of 15% to 25% of people unemployed. That changes the balance between employees and employers. That's something we need to press companies on," said Cheryl I. Smith, managing partner, economist and portfolio manager with Trillium Asset Management LLC in Boston, with $2.8 billion in assets under management.

    "Worker health and safety and pay are going to be big issues next year. Executive pay is one end of the scale. The other end of the scale is worker pay and working conditions," Ms. Smith said.


    Climate still a focus

    Still, "climate change will continue to be a big issue because we are continuing to see climate change and we are continuing to see higher temperatures. I think we are seeing more companies taking it seriously," Ms. Smith said.

    Shareholders will be watching to see how companies respond to the coronavirus crisis in terms of worker relations, executive compensation and shareholder rights, said Matt Christensen, global head of responsible investment for AXA Investment Managers in Paris, with $569 billion in ESG-integrated funds by the end of 2019. "All those views will be on the table for next season," he said. "It's not just letter writing; it means discussions with companies. These are things we consider important to resilience."

    AXA IM has dedicated analysts looking at key performance indicators such as corporate training budgets. "The other piece will be, how do we better understand this inequality gap that is happening? It looks like the continuing carve out of a middle class. It is going to pose a lot of questions about the way to ensure a successful company. It's a question that investors have been asking but now more investors are going to be asking," Mr. Christensen said.

    Even classic governance topics such as board diversity and tenures "are going to be thought about in a different way," said Jonathan Bailey, managing director and head of ESG investing for Neuberger Berman Group LLC in New York. The employee-owned investment manager, with $330 billion under management, has a new advance proxy vote disclosure initiative to explain its voting rationale at key annual shareholder meetings.

    One issue that has "come into very sharp focus" as companies try to manage through the crisis is overboarding, where corporate directors serve on too many boards, potentially straining their ability to provide adequate guidance.

    "The expectations we have of board members have gone up. How you are managing short-term needs this year makes it likely that going into next season, (those expectations) will see more focus," Mr. Bailey said.

    He also expects more investor engagement over corporate board elections. "It may be a channel to signal our support for executive teams to do the right thing. We need to wait until this time next year to see how that plays out. We want to make sure we give companies and boards time to react and adapt to the situation," Mr. Bailey said.

    "Companies are making choices about which stakeholders to take care of all the time. We are interested in seeing what is going to change about how they made those decisions," he said. "The coronavirus crisis has forced companies to show that."

    Related Articles
    ESG funds outperforming S&P 500 this year
    Boost likely for impact investing thanks to coronavirus disruption
    Crisis nips bond momentum but optimism holds
    Recommended for You
    Headshot of David Atkin
    Principles for Responsible Investment begins CEO search as David Atkin plans to step down
    Stacked blocks that have DEI on the side and Diversity, Equity and Inclusion written on the front.
    DEI on pause, but sources confident all is not lost
    esg
    Hedge funds seek out ways to navigate Trump’s anticlimate agenda
    Sponsored
    White Papers
    The State of Lifetime Income Report
    The Next Wave of LDI Evolution
    Retirement security to future income wins, TIAA brings you the latest financial…
    U.S. Public Funds Top Performers: Q2 2024
    Generative AI Investing: Opportunities at a Key Tech Inflection Point
    Research for Institutional Money Management: Advancing Physical Risk Modelling,…
    View More
    Sponsored Content
    Partner Content
    The Industrialization of ESG Investment
    For institutional investors, ETFs can make meeting liquidity needs easier
    Gold: the most effective commodity investment
    2021 Investment Outlook | Investing Beyond the Pandemic: A Reset for Portfolios
    Ten ways retirement plan professionals add value to plan sponsors
    Gold: an efficient hedge
    View More
    E-MAIL NEWSLETTERS

    Sign up and get the best of News delivered straight to your email inbox, free of charge. Choose your news – we will deliver.

    Subscribe Today
    October 23, 2023 page one

    Get access to the news, research and analysis of events affecting the retirement and institutional money management businesses from a worldwide network of reporters and editors.

    Subscribe
    Connect With Us
    • RSS
    • Twitter
    • Facebook
    • LinkedIn

    Our Mission

    To consistently deliver news, research and analysis to the executives who manage the flow of funds in the institutional investment market.

    About Us

    Main Office
    685 Third Avenue
    Tenth Floor
    New York, NY 10017-4036

    Chicago Office
    130 E. Randolph St.
    Suite 3200
    Chicago, IL 60601

    Contact Us

    Careers at Crain

    About Pensions & Investments

     

    Advertising
    • Media Kit
    • P&I Custom Content
    • P&I Careers | Post a Job
    • Reprints & Permissions
    Resources
    • Subscribe
    • Newsletters
    • FAQ
    • P&I Research Center
    • Site map
    • Staff Directory
    Legal
    • Privacy Policy
    • Terms and Conditions
    • Privacy Request
    Pensions & Investments
    Copyright © 1996-2025. Crain Communications, Inc. All Rights Reserved.
    • Topics
      • Alternatives
      • Artificial Intelligence
      • CIOs
      • Consultants
      • Defined Contribution
      • ESG
      • Face to Face
      • Hedge Funds
      • Industry Voices
      • Investing
      • Money Management
      • Partner Content
      • Private Credit
      • Pension Funds
      • Private Equity
      • Real Estate
      • Regulation
      • Special Reports
      • Washington
      • White Papers
    • International
      • U.K.
      • Canada
      • Europe
      • Asia
      • Australia - New Zealand
      • Middle East
      • Latin America
      • Africa
    • Rankings & Awards
      • 1,000 Largest Retirement Plans
      • Top-Performing Managers
      • Largest Money Managers
      • DC Money Managers
      • DC Record Keepers
      • Largest Hedge Fund Managers
      • World's Largest Retirement Funds
      • Best Places to Work in Money Management
      • Excellence & Innovation Awards
      • WPS Innovation Awards
      • Influential Women in Institutional Investing 2024
      • Eddy Awards
    • Resource Guides
      • Active Thematic Global Equities
      • Retirement Income
      • Fixed Income
      • Pension Risk Transfer
      • Pooled Employer Plans (PEPs)
    • ETFs
      • Latest ETF News
      • Fund Screener
      • Education Center
      • Equities
      • Fixed Income
      • Commodities
      • Actively Managed
      • Alternatives
      • ESG Rated
    • ESG
      • Latest ESG News
      • The Institutional Investor’s Guide to ESG Investing
      • ESG Sustainability - Gaining Momentum
      • ESG Investing | Industry Brief
      • Innovation in ESG Investing
      • ESG Rated ETFs
      • Divestment Database
    • Defined Contribution
      • Latest DC News
      • The Plan Sponsor's Guide to Retirement Income
      • DC Money Manager Rankings
      • DC Record Keeper Rankings
      • Innovations in DC
      • DC Plan Design: Improving Participant Outcomes
    • Searches & Hires
      • Latest Searches & Hires News
      • Searches & Hires Database
      • RFPs
    • Research Center
      • The P&I Research Center
      • Earnings Tracker
      • Endowment Returns Tracker
      • Corporate Pension Contribution Tracker
      • Pension Fund Returns Tracker
      • Pension Risk Transfer Database
    • Careers
    • Events
      • View All Conferences
      • View All Webinars
    • Print