An empowered workforce will be Covid-19's legacy

James Purcell

James Purcell

Goats are roaming the streets in North Wales, a flock of sheep have invaded the Turkish city of Samsun, and there has even been sightings of a kangaroo nonchalantly hopping down a deserted street in Adelaide.

With many countries around the world in varying degrees of lockdown, our streets have become a safe place for wildlife but also less polluted.

Far fewer cars on the road, planes in the air and factories belching smoke, means that our skies are unquestionably cleaner. In London, for example, pollution levels have fallen drastically since the lockdown began.

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2020 will see the kind of emissions decline that environmental activists like Greta Thunberg have been passionately calling for – and which more and more people now see as uniquely possible.

Indeed, with Covid-19 paralyzing large parts of the global economy, activists the world over have called upon governments to embrace today’s green trends and “build back better.”

The reality is, however, that economic activity (and the pollution that currently comes with it) will inevitably return as the economy reboots, however long that takes. And the likelihood of government-led green reconstruction, especially with low oil prices, looks increasingly small.

However, ESG investing – which takes into account environmental, as well as social and governance, factors – will continue to accelerate, with one area witnessing especially profound change. That change will be social, the “silent S” in ESG.

While social criteria can be tricky to define and measure, you do not need to be a rocket scientist to distinguish between a company that behaves badly and one that does not.

Just ask yourself some basic questions: does the firm treat its employees well and respect the priorities of its customers? Do their policies and actions reflect the values of society as a whole? Are they exclusively focused on doing well – or also on doing good for all their stakeholders?

Even if those kinds of priorities are set by management, no company operates in isolation. Instead, they act in relationship to the society in which they operate and, in particular, are shaped by the collective will of their employees.

This is where Covid-19 enters the equation.

The longer we remain far apart – communicating through glitchy video calls – the more powerful and persistent are the ways we find to support one another and come closer together. 

Rendered incapable of zealously standing over their employees’ shoulders, managers are fast learning the value of trust.

I strongly believe that one lasting positive impact of coronavirus will be an empowered and more flexible workforce – one where working mothers and fathers are embraced, one where those previously excluded from the workforce are able to work via home office setups, and where barriers and glass ceilings will be broken by a more productive and confident workforce.

 As investors, we must watch these developments closely.

Companies that respond positively to such trends will be much better placed to earn the trust of their employees, customers and communities.