The only necessary thing — Take it or leave it

Key Takeaways

  • Three ESG indicators — experience of the board and management, corporate social responsibility and stakeholder capitalism — are of increased significance in the current environment, for identifying companies with likely sustainable growth
  • The crisis management and business restructuring skills of executive teams and boards would be key in guiding companies through these turbulent waters and, therefore, a major differentiating factor among companies
  • The pandemic is expected to help ESG investors distinguish between companies that are “good corporate citizens” and those engaged in “social washing”. We reflect on the Purpose of a Corporation declaration signed by 181 CEOs of US companies, some of whom laid off employees within a month of the first COVID-19 fatality in the country
  • In the current scenario, when many management teams are struggling to balance short-term business risks and long-term value creation, companies demonstrating “stakeholder capitalism” are likely to stand out from an ESG perspective. We explain this in the context of the COVID-19 response of some global banks

We write about financial industry trends, the impact of regulatory changes and opinions on industry inflection points.