Navigating investment in a post-COVID world - How can investors drive positive change?

2020 was a year like no other, with COVID-19 reshaping the way we live, work and invest. As the year began, we were forced to reassess how we interact with each other, how complex systems work together and how nature has more power over us than we normally like to admit.

First Sentier Investors’ purpose is to deliver sustainable investment success for the benefit of our clients, employees, society and our shareholder and our vision is to be a provider of world-leading investment expertise and client solutions, led by our responsible investment principles.

We recognise that the individual and collective decisions we make as investors have far-reaching implications. While our business is to protect and enhance the value of our clients’ assets, we are aware of our wider responsibilities, such as upholding the quality and integrity of the financial markets we invest in and the allocation of capital to productive purposes that contribute to a sustainable economy and society.

During the course of this unique year, the First Sentier Investors (FSI) Responsible Investment (RI) Steering Group has continued to set the direction and strategy for RI within the firm. This included extensive discussions about how RI will continue to develop in a post-COVID world.

We believe 2020 will prove to be a watershed year for RI. As we emerge from the pandemic, there will be an everincreasing focus on how companies impact the world around them and how they earn their social licence to operate (SLO). A critical, intangible corporate asset, SLO refers to the broad, ongoing social acceptance that a company has a right to do business.

Key to the SLO equation are the stakeholders who hold companies to account. Governments, regulators and customers all play a vital role, and so do investors. Every decision about where we allocate capital is a vote regarding a company’s fitness to be in business.

We take our responsibility as stewards of our clients’ capital seriously, and this is why we believe in ongoing, meaningful engagement with companies on their environmental, social and governance (ESG) performance. We are committed to proactively engaging with management to foster better practices around issues including carbon emissions, human rights, diversity and workplace health and safety.

We believe that active managers have both an opportunity and a responsibility to be active. In a post-COVID world, we will all be searching for lessons we must take away from the pandemic. It is important that we use this opportunity to recognise the positive impact investors can make, and to continue looking at how we can work collaboratively with the companies we invest in.

Three broad issues, which we have been focusing on for some time, will take on even more importance as we emerge from the current pandemic:

1. Climate change and biodiversity

2. Human rights and modern slavery

3. Workplace diversity, health and wellbeing

In this white paper, we assess how all of these issues have been impacted by the COVID-19 pandemic, how we anticipate they will develop, and how they align with the Sustainable Development Goals (SDGs).