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Investors managing $4.7 trillion detail corporate responsibilities amid COVID-19

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Investors managing $4.7 trillion detail corporate responsibilities amid COVID-19

Nearly 200 institutional investors with more than $4.7 trillion in assets under management issued a statement outlining their expectations for companies on social and governance issues amid the coronavirus pandemic.

"The long-term viability of the companies in which we invest is inextricably tied to the welfare of their stakeholders, including their employees, suppliers, customers and the communities in which they operate," said the March 26 statement organized by the Interfaith Center for Corporate Responsibility, Domini Impact Investments LLC and the office of New York City Comptroller Scott Stringer.

While the virus will strain global social and financial systems, actions can be taken to protect society and companies from the worst possible outcomes, the statement said.

The investors urged companies to provide emergency paid leave to all employees, including temporary, part-time and subcontracted workers. "Without paid leave, social distancing and self-isolation are not broadly possible," the investors said in reference to the method of limiting the spread of the virus by people staying home and keeping at least six feet away from each other when they do need to venture out.

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The statement said companies should protect worker and public safety, which "is essential for maintaining business reputations, consumer confidence and the social license to operate, as well as staying operational." Companies could, for example, implement rotating shifts, allow remote work, enhance cleaning, and close locations if necessary.

Companies should also take every measure possible to retain workers, which will enable companies to resume operations quickly once the crisis is resolved, the investors said. Furthermore, companies considering layoffs should be mindful of the potential for discriminatory impacts and the risk of subsequent employment discrimination cases.

The statement also addressed supply chain challenges emerging as a result of the virus. The investors encouraged companies to maintain timely or prompt payments to suppliers and to work with customers that may be facing financial hardships. Doing so "will help to stabilize the economy, protect our communities and small businesses and ensure a stable supply chain is in place for business operations to resume normally in the future," the investors said.

The investors also expect companies to show "the highest level of ethical financial management and responsibility," which could include suspending share buybacks and limiting executive and senior management compensation during the crisis.

Companies should also consider going beyond those recommendations where possible, said the statement. Additional steps could include childcare assistance, hazard pay, employer-paid health insurance for laid-off workers and deploying resources to address pandemic-related needs.

"While we acknowledge many of these recommendations may be out of reach, over the last several years we have seen corporations show leadership by using their power as a force for tremendous good," the investors said. "This leadership is critically needed as we face COVID-19 together."