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Lockdowns boost ‘social’ investment data

While clarifying the meaning of the ‘S’ in environmental, social and governance investing

Lockdowns have provided previously lacking social data on corporates and allowed a reality check on their behaviour, the global chief executive of Aegon Asset Management has said.

Bas NieuweWeme (pictured) explained that past publicly reported data on poor social performance has been limited.

This has made it difficult for investors to assess companies on their ability to tackle social issues.

NieuweWeme said that “previously, we have usually relied on discussions with executive boards, while assessing policies on areas such as diversity and inclusion, childcare and flexible working, among others, while using sites such as Glassdoor to get a feel for corporate culture”.

But “the lockdown has allowed a crystallisation of the real performance on social issues versus mere [corporate] policies and positioning”.

The gathered social data has also allowed clarification on what the ‘S’ in ESG stands for, he added.

Social criteria

NieuweWeme said the Dutch asset manager has evaluated companies on issues, such as:

  • are they providing employees with sufficient equipment and appropriate facilities to do their jobs?
  • have they shared the burden of the crisis when it comes to future board remuneration?; and
  • have they abandoned their employees or customers in these difficult times?

From now on, the role of investors was to assess how businesses have adapted practices and working environments to ensure employee wellbeing.

“Going forward, we will be keeping a close eye on how companies implement new rules and regulations around employees’ safety and wellbeing, and on the executive and shareholder remuneration of those companies accepting public bailout funds,” he noted.

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