Crisis Q&A: ‘Covid-19 and ESG’

coronavirus_crisis_esgHugh Stacey, head of investor solutions at fund administrator IQ-EQ, answers questions on the future of ESG following the pandemic, and whether the world will ever return to a pre-Covid status quo.

Is now a time to put ESG on the agenda more so than before, or should firms be focusing on surviving?
In theory this would be a good time for managers to focus on ESG in light of deal flow slowing down and the uncertainty that the current environment is bringing. However, in reality I think that most investors are ramping up their analysis with regard to how the performance of their funds is being affected and how to communicate this to their investors.

Can there be a return to “normality” following this pandemic?
Things will take time to settle and for certain parts of the market – such as start-ups and the leisure industry – they might not as they have been the worst affected.  But with all turbulent times comes opportunities and those with the most robust structures and scale will find themselves taking advantage of the situation once the dust settles. For example, the pharma/biotech and technology industries will be two of the industries in which these opportunities will prevail. So once things reach “normality”, this new normality might look very different to the one we have gotten used to. Certainly the economic impact will be felt for a long time after this.

I also think that there will be a profound change in how we operate and work – with flexi hours and working from home, and perhaps less business travel.  In general, firms will be placing a greater focus on technology.

What positives would you like to see coming out the other side of the coronavirus crisis?
The use of technology from a business perspective has really proven itself, and will be fundamental in the future.  Further, we might see a society in the future that is less of a consumer-driven society, and more of a savings-driven society. Holistically speaking, we are already seeing several examples of society coming together and resembling one more akin to the pre-globalised society.

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