date; we are investing a lot of trust in the asset manager. The data is good and monitoring is important, but ESG methodol- ogy in private markets, for us, is more focused on the ethos and capabilities of the manager than the ESG data they can generate.


PI: Lauren, have you been promoting higher standards in data disclosure? Peacock: A couple of years ago we launched the Workforce Disclo- sure Initiative, which specifically focuses on the S in ESG and is about information on operations and supply chains. Our 2019 report came out in early May and 118 companies globally submitted quite detailed information. You do not want too much data; it needs to be relevant. It is about it being material and changing over time, to be forward looking. There is a question about internal recruitment rates. It is great to have a policy on diversity, but it is important to know how to meas- ure and improve it. Czupryna: We are a big fan of the Workforce Disclosure Initiative. Two years ago it had about 30 companies reporting, so it has the potential to become the CDP of the S in ESG.


It could be massive in terms of impact and coming out of the Covid crisis will give an additional impetus for companies to take this seriously.


The quality of data is improving on the environmental side, but the devil is in the detail. You need to be careful about what companies are committing to when trying to align their operations with the Paris Agreement. For example, is a car company planning to be car- bon neutral on its products as well as its processes. Their products can sometimes represent over 80% of their overall emissions. That is our role as investors. Through research and engagement together with other investors, Climate Action 100+ and ShareAc- tion, for example, we make sure that companies commit to some- thing that is going in the right direction.


PI: Will the huge fall in oil price impact renewable energy’s invest- ment case? Czupryna: Oil is not a major source of energy to generate power. We use renewable energy to generate power through wind tur- bines, solar panels and hydro installation. Oil is used for transpor- tation, to heat buildings and in industry. So negative or low oil prices over the short term does not create an incentive to invest less in renewable energy. However, when the oil price declines natural gas prices also tend to go down over time and natural gas is a competitor of renewables. So this might create a weaker incentive for power generation on a cost basis to invest in renewables. However, in Europe, regulators, the European Com- mission and the UK government have set a clear path towards investing in renewables.


This is top down regulatory pressure that can act as a counterbal- ance to low fossil fuel energy prices.


May 2020 portfolio institutional roundtable: ESG 15


The greater our returns, the greater the scale of our charitable work. Anita Bhatia, Guy`s and St Thomas` Charity


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