Brunel Pension Partnership – Interview
The pandemic has been a challenging time. But, from our perspective, it does not mean the ESG risks faced by the com- panies will go away. Obviously, there is a need to focus on short-term risks, but companies increasingly need to look long- term. If anything, the pandemic has high- lighted the need to act, to move away from regarding ESG as a non-financial extra. This could be a precursor of things to come if we do not deal with existential risks, such as climate change. Throughout the past year, we have wit- nessed social disruption to many peoples’ lives and they will be reflecting on that in their needs going forward. We have also seen the tragic death of George Floyd which has put into the spotlight existing inequali- ties and we have seen the Black Lives Mat- ter movement sweep across the globe.
There is now a new sense of urgency. Companies are understanding the need to be more sustainable, that this is what their customers want. In fact, early indi- cations show that sustainable companies are faring better during the pandemic. Companies are also aware that there will soon be a large wealth transfer from older generations to millennials. Research shows that this generation has a greater interest in ESG. So, this wealth transfer is likely to fuel a growing demand for more sustainable products and there will be more requirements on companies to meet those needs. We also saw major ESG announcements from companies throughout 2020, despite what they are facing. Johnson & Johnson, for example, has committed $800m (£589m) to make their products
more sustainable. BP recently announced a 10-year plan which includes a 10-fold increase in low-carbon investments. For us, the biggest challenge will not be whether companies will pull back on ESG or not, it will be distilling the genuine commitments from the PR exercise. We continue to see more announcements and commitments from companies, but the big question going forward will be whether they follow up on this in the years to come.
Coming back to Barclays, they did not adopt the shareholder resolution that you and your peers put forward, setting their own proposal instead. That was interesting. We have not seen that before. We secured more than 24% of the vote, which means Barclays needed to
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