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Companies’ commitment to social issues rises

22 June 2020

The Covid-19 pandemic has thrust companies’ commitment to social issues to the forefront, according to Aegon Asset Management.

Historically, the social element of ESG has been “more challenging” to evaluate as it typically relies on qualitative measures with limited means to assess actual performance, the group said. However, lockdown and the adoption of a widespread home-working policy for many companies has offered greater clarity around how companies deal with this element.

Bas NieuweWeme, CEO, Aegon Asset Management, said: “The lockdown has allowed a crystallisation of the real performance on social issues versus mere policies and positioning.

“We can now look at how companies have behaved during this crisis. For example, are they providing employees sufficient equipment and appropriate facilities to do their jobs, have they shared the burden of the crisis when it comes to future board remuneration, and have they abandoned their employees or customers in these difficult times?”

NieuweWeme said investors should assess how businesses have adapted their practices and working environments to ensure employee wellbeing and said the global pandemic would prove a catalyst for change.

NieuweWeme added: “Going forward, we will be keeping a close eye on how companies implement new rules and regulations around employees’ safety and wellbeing, and on the executive and shareholder remuneration of those companies accepting public bailout funds.

““From an investment perspective, if there is any good to come from this episode, it is the fact it has created greater awareness about Environmental, Social and Governance issues. In respect to the environment, I think many of us have enjoyed that during lockdown there has been less pollution and consequently fresher air, while nature has seemingly started to reclaim some of our urban environment.

“There is also some preliminary scientific research pointing to links between air pollution and Covid-19 mortality.  These, as well as other factors mean environmental standards will come under increasing scrutiny post pandemic.”

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