- June 30, 2020
-- Pandemics have unexpected impacts upon markets and the Covid-19 outbreak is no exception. It is rapidly leading to a new way of business thinking which has manifested itself all across Europe and the world. That new trend is a heightened sense of concern for others, for example, key workers. Alongside this is a tangible new drive towards people wanting to "do the right thing" more often, which ZEDRA, the global specialist in Active Wealth
, corporate and fund administration, believes will manifest itself in the form of rising demand for funds and company structures with a stronger emphasis on their environmental, social and governance (ESG) credentials.
Joanna Bodell, Managing Director, ZEDRA Isle of Man explains the new trend, 'Now, more than ever, social responsibility is a key consideration for business. We have watched as our clients look to invest in and run businesses supported by ever stronger ESG practices for some time now. This is not a short term trend, rather, we expect that the focus on ESG will transcend generations.'
On a more specific level, family businesses are increasingly focussed on embracing governance factors as part of more sustainable business models, and the result is a more frank and open discussion about complex "good business "themes, both by younger and older members of the family. 'Gender balance on boards, having proper conflict resolution processes in place and striving for real board independence are now common themes,' adds Bodell.
Zedra sees this trend replicating itself within family offices too, which are now more likely to think about ESG in the context of their investment strategy, philanthropy and their own operations.
Meanwhile, in the funds sector, while capital markets have seen extensive turbulence over the past couple of months, fund managers have tried to ride out this volatility and simultaneously identify good share valuations precipitated by the market dislocation.
'A reoccurring theme has been that the companies that have consistently focused on sustainability and ESG themes are now emerging as some of today's strongest players, making them increasingly attractive for the fund managers and investors we support,' says Mark Cleary, Director, ZEDRA Fund Services Jersey.
A strong ESG focus is often also synonymous with good governance. 'Governance is always important for our corporate clients, and it's seen as a fundamental element in the building of a sustainable business that can endure over the long-term,' says Frank Walenta, Commercial Director, Luxembourg.
The Coronavirus has shown the importance of strong corporate entities and highlighted what companies may need to do to thrive and prosper in the future, and if this leads to a new wave of organisations with a firmer grip on an ESC philosophy, there could yet be a silver lining.