Just over a year since the he Business Roundtable re-defined the statement of purpose of a corporation, away from just shareholder primacy, the world faced a severe global crisis. This session looks at companies’ responsiveness to the COVID-19 pandemic and inequality issues and how corporations can better serve all stakeholders in the future.[vc_quotes layout=”accordion” quotes=”%5B%7B%22name%22%3A%22Anthony%20Eames%22%2C%22job_role%22%3A%22Director%20of%20responsible%20investment%20strategy%2C%20Calvert%20Research%20and%20Management%22%2C%22content%22%3A%22Anthony%20Eames%20is%20a%20vice%20president%20and%20director%20of%20responsible%20investment%20strategy%20for%20Calvert%20Research%20and%20Management%2C%20a%20wholly%20owned%20subsidiary%20of%20Eaton%20Vance%20Management%20specialising%20in%20responsible%20and%20sustainable%20investing%20across%20global%5Cncapital%20markets.%20He%20is%20responsible%20for%20the%20suite%20of%20strategies%20focused%20on%20responsible%20investing%2C%20encompassing%20actively%20and%20passively%20managed%20US%20and%20international%20equity%20strategies%2C%20fixed-income%20strategies%20and%20asset%20allocation%20funds.%20Eames%20is%20responsible%20for%20client%20communications%20and%20insights%20on%20investment%20strategy%20and%20portfolio%20positioning.%20He%20joined%20Calvert%20Research%20and%20Management%20in%202016%20when%20Eaton%20Vance%20acquired%20the%20business%20assets%20of%20Calvert%20Investment%20Management%2C%5Cnforming%20Calvert%20Research%20and%20Management.%5Cn%5CnHe%20began%20his%20career%20in%20the%20investment%20management%20industry%20in%201995%20with%20Calvert%20Investment%20Management.%20He%20has%20been%20affiliated%20with%20the%20Eaton%20Vance%20organisation%20since%202016.%20Before%20joining%20Eaton%20Vance%2C%20he%20was%20senior%20vice%20president%20and%20national%20sales%20manager%20at%20Calvert%20Investment%20Management.%20Previously%2C%20he%20represented%20Calvert%20as%20senior%20regional%20vice%20president%20in%20the%20northeast%20and%20held%20various%20roles%20in%20client%20services%20and%20sales.%5CnEames%20earned%20a%20B.A.%20from%20Wittenberg%20University.%20He%20holds%20the%20Accredited%20Investment%20Fiduciary%20and%20Accredited%20Asset%20Management%20Specialist%20designations%2C%20and%20FINRA%20Series%207%2C%2024%20and%2063%20licenses.%22%2C%22image%22%3A%2235243%22%2C%22linkedin%22%3A%22https%3A%2F%2Fwww.linkedin.com%2Fin%2Fanthony-eames-3431198%2F%22%7D%2C%7B%22name%22%3A%22Robert%20Eccles%22%2C%22job_role%22%3A%22Visiting%20professor%20of%20management%20practice%2C%20Sa%C3%AFd%20Business%20School%2C%20University%20of%20Oxford%22%2C%22content%22%3A%22Robert%20Eccles%20is%20the%20world’s%20foremost%20expert%20on%20integrated%20reporting%20and%20a%20leader%20on%20how%20companies%20and%20investors%20can%20create%20sustainable%20strategies.%5Cn%5CnHe%20was%20previously%20a%20tenured%20Professor%20and%20Professor%20of%20Management%20Practice%20at%20Harvard%20Business%20School.%5Cn%5CnHe%20is%20the%20founding%20chair%20of%20the%20Sustainability%20Accounting%20Standards%20Board%20(SASB)%20and%20one%20of%20the%20founders%20of%20the%20International%20Integrated%20Reporting%20Council%20(IIRC).%20He%20has%20recently%20joined%20the%20board%20of%20Mistra%20Centre%20for%20Sustainable%20Markets%20(MISUM)%20in%20Sweden.%20He%20is%20also%20on%20the%20Advisory%20Board%20of%20the%20JANA%20Impact%20Capital%20Fund.%20%5Cn%5CnIn%202011%2C%20Eccles%20was%20selected%20as%20one%20of%20the%20Top%20100%20Thought%20Leaders%20in%20Trustworthy%20Business%20Behavior%2C%20for%20his%20extensive%2C%20positive%20contribution%20to%20building%20trust%20in%20business%2C%20and%20in%202014%20and%202015%20he%20was%20named%20as%20one%20of%20the%20100%20Most%20Influential%20People%20in%20Business%20Ethics.%20He%20is%20also%20an%20Honorary%20Fellow%20of%20the%20Association%20of%20Chartered%20Certified%20Accountants%20(ACCA).%5Cn%5CnEccles%20is%20the%20award-winning%20author%20of%20a%20dozen%20books%2C%20including%20seminal%20works%20on%20integrated%20reporting%2C%20sustainability%2C%20and%20the%20role%20of%20business%20in%20society.%20A%20prolific%20writer%20for%20both%20academic%20and%20practitioner%20audiences%2C%20he%20has%20his%20own%20column%20on%20Forbes.com.%20His%20most%20recent%20book%20(with%20Michael%20P%20Krzus%20and%20Sydney%20Ribot)%20is%20The%20Integrated%20Reporting%20Movement%3A%20Meaning%2C%20Momentum%2C%20Motives%2C%20and%20Materiality%20(John%20Wiley%20%26%20Sons%2C%202015).%20In%20this%20book%20he%20suggests%20the%20idea%20of%20an%20annual%20board%20of%20directors%20’Statement%20of%20Significant%20Audiences%20and%20Materiality’.%5Cn%5CnFrom%20the%20beginning%20of%20his%20career%20as%20an%20academic%20and%20practitioner%2C%20Eccles%20has%20always%20been%20dedicated%20to%20turning%20theory%20into%20practice.%20One%20of%20his%20most%20significant%20current%20efforts%20in%20this%20regard%20is%20’The%20Statement%20of%20Significant%20Audiences%20and%20Materiality%20Campaign’%20in%20collaboration%20with%20the%20American%20Bar%20Association%E2%80%99s%20’Task%20Force%20on%20Sustainable%20Development’%2C%20the%20UN-backed%20Principles%20for%20Responsible%20Investment%2C%20and%20the%20UN%20Global%20Compact.%20The%20goal%20of%20this%20campaign%20is%20that%2C%20by%202025%2C%20the%20board%20of%20directors%20of%20every%20listed%20company%20will%20publish%20’The%20Statement.’%20In%20doing%20so%2C%20they%20will%20demonstrate%20the%20extent%20to%20which%20the%20company%20views%20its%20role%20in%20society%20to%20be%20one%20of%20supporting%20sustainable%20development%20for%20the%20long-term%20interests%20of%20shareholders.%20This%20will%20help%20to%20make%20sustainability%20core%20to%20both%20companies%20and%20investors.%5Cn%5CnEccles%20received%20an%20SB%20in%20Mathematics%20and%20an%20SB%20in%20Humanities%20and%20Science%20from%20the%20Massachusetts%20Institute%20of%20Technology%20(both%20degrees%20in%201973)%20and%20an%20AM%20(1975)%20and%20a%20PhD%20in%20Sociology%20(1979)%20from%20Harvard%20University.%20He%20joined%20the%20faculty%20of%20Harvard%20Business%20School%20that%20year%20and%20received%20tenure%20in%201989.%22%2C%22image%22%3A%2235244%22%2C%22linkedin%22%3A%22https%3A%2F%2Fwww.linkedin.com%2Fin%2Frobert-eccles-4872408%2F%22%7D%2C%7B%22name%22%3A%22Mark%20Tulay%22%2C%22job_role%22%3A%22Founder%20and%20chief%20executive%2C%20TCP%3B%20chief%20executive%2C%20Sustainability%20Risk%20Advisors%22%2C%22content%22%3A%22Mark%20Tulay%20has%20served%20in%20leadership%20roles%20in%20sustainability%20initiatives%20for%20over%2025%20years%2C%20focusing%20on%20advancing%20the%20metrics%2C%20measurement%20and%20management%20of%20corporate%20sustainability%20performance.%20%20As%20program%20director%20and%20the%20first%20employee%20of%20Ceres%2C%20he%20was%20involved%20in%20the%20early%20stages%20of%20the%20Global%20Reporting%20Initiative%20(GRI).%20He%20co-founded%20the%20Strategic%20Investor%20Initiative%20(SII)%20at%20CECP%2C%20which%20is%20re-orienting%20the%20capital%20markets%20to%20the%20long-term%20and%20is%20elevating%20sustainability%20factors%20as%20a%20CEO%20leadership%20imperative.%5Cn%5CnTulay%20serves%20as%20finance%20and%20ESG%20program%20manager%20for%20GreenBiz%2C%20which%20is%20launching%20the%20GreenFin%20Summit%20to%20accelerate%20the%20rise%20and%20growth%20of%20sustainable%20finance%20and%20ESG%20and%20its%20link%20to%20corporate%20sustainability.%5Cn%5CnHe%20also%20serves%20as%20founder%20and%20CEO%20of%20Sustainability%20Risk%20Advisors%20(SRA)%2C%20which%20helps%20companies%20measure%20and%20manage%20what%20matters%20most%20for%20community%2C%20climate%20and%20culture.%5Cn%5CnHe%20has%20a%20proven%20record%20of%20driving%20innovation%20and%20sustainable%20growth%20for%20environmental%20organisations%2C%20investment%20firms%2C%20companies%2C%20and%20environmental%2C%20social%20and%20corporate%20governance%20(ESG)%20ratings%20and%20research%20providers.%20%20He%20has%20demonstrated%20a%20unique%20ability%20to%20collaborate%20effectively%20with%20a%20diverse%20mix%20of%20constituencies%20%E2%80%93%20institutional%20investors%2C%20government%2C%20NGOs%20and%20companies%20%E2%80%93%20towards%20the%20common%20goal%20of%20accelerating%20the%20global%20transition%20to%20sustainable%20finance%20and%20development.%20%5Cn%5CnHe%20serves%20on%20advisory%20boards%20for%20Cornerstone%20Capital%20Group%20and%20holds%20an%20MBA%20from%20Northeastern%20University.%22%2C%22image%22%3A%2235245%22%2C%22linkedin%22%3A%22https%3A%2F%2Fwww.linkedin.com%2Fin%2Fmtulay%2F%22%7D%5D” title=”Speakers” el_class=””][vc_quotes layout=”accordion” quotes=”%5B%7B%22name%22%3A%22Amanda%20White%22%2C%22job_role%22%3A%22Director%20of%20institutional%20content%2C%20Conexus%20Financial%20(Australia)%22%2C%22content%22%3A%22White%20is%20responsible%20for%20the%20content%20across%20all%20Conexus%20Financial%E2%80%99s%20institutional%20media%20and%20events.%20She%20is%20responsible%20for%20directing%20the%20bi-annual%20Fiduciary%20Investors%20Symposium%20which%20challenges%20global%20investors%20on%20investment%20best%20practice%20and%20aims%20to%20place%20the%20responsibilities%20of%20investors%20in%20wider%20societal%2C%20and%20political%20contexts%2C%20as%20well%20as%20promote%20the%20long-term%20stability%20of%20markets%20and%20sustainable%20retirement%20incomes.%20She%20is%20the%20editor%20of%20conexust1f.flywheelstaging.com%2C%20the%20online%20news%20and%20analysis%20site%20for%20the%20world%E2%80%99s%20largest%20institutional%20investors.%20White%20has%20been%20an%20investment%20journalist%20for%20more%20than%2020%20years%20and%20has%20edited%20industry%20journals%20including%20Investment%20%26%20Technology%2C%20Investor%20Weekly%20and%20MasterFunds%20Quarterly.%20She%20was%20previously%20editorial%20director%20of%20InvestorInfo%20and%20has%20worked%20as%20a%20freelance%20journalist%20for%20the%20Australian%20Financial%20Review%2C%20CFO%2C%20Asset%20and%20Asia%20Asset%20Management.%20She%20has%20a%20Bachelor%20of%20Economics%20from%20Sydney%20University%20and%20a%20Master%20of%20Arts%20in%20Journalism%20from%20the%20University%20of%20Technology%2C%20Sydney.%20She%20was%20previously%20a%20columnist%20for%20the%20Canadian%20publication%2C%20Corporate%20Knights%2C%20which%20is%20distributed%20by%20the%20Globe%20and%20Mail%20and%20The%20Washington%20Post.%20White%20is%20currently%20a%20fellow%20in%20the%20Finance%20Leaders%20Fellowship%20at%20the%20Aspen%20Institute.%20The%20two-year%20program%20consists%20of%2022%20fellows%20and%20seeks%20to%20develop%20the%20next%20generation%20of%20responsible%2C%20community-spirited%20leaders%20in%20the%20global%20finance%20industry.%22%2C%22image%22%3A%2235225%22%2C%22linkedin%22%3A%22https%3A%2F%2Fwww.linkedin.com%2Fin%2Famanda-white-101a7515%2F%3ForiginalSubdomain%3Dau%22%7D%5D” title=”Moderator” el_class=””][vc_empty_space height=”10px”]
Key takeaways
Anthony
Companies will be judged on how they balance the needs of shareholders vs the needs of the rest of the stakeholder ecosystem.
We believe the corporate response can either lengthen or shorten the severity of the pandemic.
COVID is a helpful exercise in crisis management because the climate crisis is coming.
There is power in engagement – companies are starting to fully publically disclose their employee diversity statistics.
Bob
If we really want to push the boundaries, more companies should change their form to be public benefit corporations. Investors should pressure their portfolio companies to do that.
ESG research is flawed because the data is not optimal quality. We need ESG reporting standards and mandated reporting in the same way that finance has accounting standards to ensure comparability of performance. Standards and mandated ESG reporting would give greater clarity on whether companies are meeting their intended purpose.
System level inequality is an issue to wrap our global arms around to tackle, just like climate.
Mark
Based on research with over 1 million datapoints:
1) Speed of response to the pandemic did correlate with outperformance
2) Companies with a strong ESG track record pre-crisis outperformed during the peak pandemic months
3) There was no correlation between companies signing a pledge and them treating stakeholders fairly during the pandemic
Two additional key findings were:
1) European companies performed no better on the test of corporate purpose. This is not a US-only issue.
2) Current ESG research is not fit for purpose for investors, meaning a new research model leveraging machine learning and technology is needed
This is not a time for complacency or celebration.
Companies cannot and should not shirk away from hard facts, and companies that outperform on ESG metrics should be celebrated.
The US is too male, pale and stale and increased disclosure requirements will help change this.
Investors need to more proactively engage boards in the corporate purpose conversations to ensure top down buy-in.
[vc_empty_space height=”10px”]
Unanswered questions and answers
[vc_empty_space height=”10px”]
Poll results
How do you enforce funds managers to engage on your behalf with corporate boards regarding their purpose?[vc_line_chart x_values=”” values=”%5B%7B%22title%22%3A%22Build%20it%20into%20mandates%22%2C%22y_values%22%3A%2227%22%2C%22color%22%3A%22blue%22%7D%2C%7B%22title%22%3A%22Insist%20on%20transparent%20reporting%20on%20engagement%22%2C%22y_values%22%3A%2233%22%2C%22color%22%3A%22pink%22%7D%2C%7B%22title%22%3A%22Fee%20penalties%20for%20non-compliance%22%2C%22y_values%22%3A%220%22%2C%22color%22%3A%22orange%22%7D%2C%7B%22title%22%3A%22Have%20the%20PRI%20track%20and%20report%20on%20manager%20engagement%20activity%22%2C%22y_values%22%3A%2213%22%2C%22color%22%3A%22peacoc%22%7D%2C%7B%22title%22%3A%22We%20don%E2%80%99t%20enforce%20managers%20to%20engage%20with%20boards%22%2C%22y_values%22%3A%2227%22%2C%22color%22%3A%22purple%22%7D%5D”][vc_empty_space height=”10px”]
APG's CIO Peter Branner explains how the pandemic has accelerated key trends already underway around digitization, central bank policy and action to combat climate change. It all points to fierce competition for private assets.
Joe Biden has come to the presidency with all the ingredients for success however there are a number of sweeping global trends underway that will continue whoever is in the White House. Professor Stephen Kotkin examines these trends and looks at where there may be geopolitical risk under a Biden presidency.
It will take at least an additional two years from now to eradicate the COVID-19 health pandemic despite various coronavirus vaccines being rolled out warned health experts at the FIS Digital 2020. Dr Ian Norton, former global head of WHO’s Emergency Medical Team Initiative, said a long road to normal still lies ahead.
NZ Super's recent five-year reference portfolio review saw much debate over currency risk, with the discussion elevating to the board - an unusual situation for the fund whose internal IC usually makes recommendations to the board.
As geopolitical risks increasingly stalk developed markets, asset owners sifting through the noise for long-term trends believe a fragmented world is here to stay. We spoke to CalSTRS, OPTrust, PFA and USS about the impact on their portfolios.
An LDI approach, which included a large allocation to bonds and a lot of internal investment management, helped HOOPP survive the GFC and has served it well for the past 13 years. But now – with the COVID crisis and a very low interest rate environment – that approach is being revisited and the fund is looking to invest more in alpha generating assets, and external management.
As impact investing gains momentum, the winning entries of a McGill University international investment challenge have shown the pension industry a thing or two about how to holistically tackle a triple mandate that includes impact.
Leave a Comment
You must be logged in to post a comment.
Login