The global coronavirus pandemic is an unprecedented global crisis. The human, economic and financial impacts have already been huge, and it is not yet clear how quickly the virus will be brought under control and normal economic activity can resume.
BMO GAM’s Responsible Investment team has been considering the impact of the coronavirus on the ESG agenda. We are co-operating with other investors to provide companies with a united message on our expectations of how they should respond – we have co-signed the Investor Statement on Coronavirus Response1 and would encourage other investors to do the same.
An urgent priority for companies is to address employee concerns over sick leave, quarantine and caring responsibilities, recognising that disruption may last for months to come. The scientific evidence is clear that self-quarantine measures are essential in controlling the spread of the virus, and companies bear a responsibility to enable this where they possibly can.
Best practices will vary by sector, but include:
Provision of protective gear and high-frequency cleaning for workers who are exposed to contact with people in their jobs
Introduce or extend sick leave provisions, especially in jurisdictions where this is not the norm or mandated by government policy
Flexible shift work for those not able to work from home/remotely; flexibility and adjustment in expectations for home-working staff who are impacted by childcare closures
Emergency funds or salary guarantee for a period of time for staff who are temporarily not required due to business closure or lockdown
Provision of mental health support
We are already seeing significant gaps opening up between companies which are doing a good job of looking after their staff and those which are not, with social media very active in calling out the latter; companies neglecting their responsibilities now may face consumer hostility later.
Linking up with our wider engagement on workplace standards and diversity, we are already seeing that those companies that have embraced a culture of flexible working will have less productivity loss than those that haven’t. We would hope that many of the lessons learned now from enforced working from home will be lasting ones, and facilitate more flexible working practices and shared childcare in future.
As well as their employees, companies also have responsibilities towards wider set of stakeholders including their suppliers and customers, many of whom are also facing enormous strains. Respecting these responsibilities and doing what they can to alleviate the problems will be important in maintaining and building these relationships in the longer term. Measures that companies can take include ensuring that suppliers are paid on time, or even ahead of time; making their products more easily accessible to vulnerable customers (both in terms of affordability and physical access, such as offering deliveries); and philanthropic activities to support the most impacted communities.
To access our full report on the early implications of COVID-19 on the ESG agenda.