Keeping companies accountable through coronavirus

A focus on treating staff and suppliers fairly

Most of the topics tackled during the quarter were around governance – board structure and pay – as companies continue to deal with the massive drop in economic activity created by the coronavirus outbreak.

They included:

• ensuring the safety and wellbeing of their workforce and finding ways to keep people employed, seeking government support as appropriate
• treating their suppliers fairly, serving their customers and supporting the efforts of governments and wider society in dealing with the COVID-19 crisis
• strengthening their balance sheets and acting in their long-term interests when spending money  

Strong, sustainable leadership crucial

Leslie Gent, Head of Responsible Investing at Coutts, says, “The focus on board-level activity this quarter comes as the coronavirus outbreak shows the need for companies to have strong leadership that’s focused on the future, particularly during such challenging times.

“The long-term value of the companies we invest in is crucial to our aim of delivering robust returns for our clients over time.

“As a bank with clear purpose, we want to do all we can to assist and influence the companies that we invest in to become more sustainable. That’s been more important than ever in 2020.”

Working with the best in the business

Our voting and engagement with companies is done in partnership with EOS at Federated Hermes (EOS), which works with businesses on behalf of investors to encourage responsible behaviours. EOS represents investors in 14 countries with over £850 billion in assets under advice (as at 31 March 2020).  

Dr Hans-Christoph Hirt, Executive Director, Head of EOS, recently wrote to all partner companies including Coutts. He said lessons could be learned from the response to the coronavirus crisis with regards to climate change.

His letter stated, “Business and governments will need to learn from and comprehensively act on the lessons from this crisis, not only for future pandemics, but for other known risks, such as the climate crisis – an emergency that requires far greater planning, resolve and commitment than we have seen so far in addressing the coronavirus pandemic in most countries.

"The world will not be the same again - or at least, it should not be.”
 

The environment isn't saved yet

Leslie adds that the recent, inadvertent progress made on climate targets as the world goes through lockdown should not detract from the ongoing, urgent need for wider change.

“The International Energy Agency has said that carbon emissions could fall by 8% this year as a result of the coronavirus keeping us all at home,” she says. “But once lockdown ends and things return to normal, those emissions will shoot back up again. So there remains much more to do, and a huge role for business to play.”

Find out more about responsible investing at Coutts. And look out for our first annual Sustainability Report, coming soon.

When investing, past performance should not be taken as a guide to future performance. The value of investments, and the income from them, can go down as well as up and you may not recover the amount of your original investment.