For One ESG Data Hunter, The Crisis Shows Companies Profited By Doing Good

FOR MILLIONS OF BRITONS, March 24 will be remembered as the lockdown moment when they either lost their job or were told not to come back to work for months. For Andy Howard, it was the day his workload doubled.

- ALASTAIR MARSH

In addition to running a team of 13 investment analysts at London-based asset manager Schroders Plc, he now found himself caring for four children under the age of 8, housebound as schools and nurseries closed. “The first challenge was, how’s this going to work?” says Howard, whose wife works for the U.K. government and continued to travel to the office.

On his first day of confinement, in between mediating arguments about whose turn it was on the iPad, Howard formalized a research project his team had been toying with for a few weeks to look at how companies were responding to the pandemic and treating their workers. With the help of Schroders data scientists, his team gathered information on some 10,000 companies from their public statements, media reports, regulatory filings, and other sources.

Covid-19 revealed a lot about how companies were run and what their managers prioritized. Some laid-off workers, while others guaranteed jobs; some offered extra benefits, such as covering employees’ medical costs; still others repurposed operations to assist the Covid relief effort. “There was no time to think s trategically about what’s the right thing to do here,” says Howard, 44. “It was a live test of how do they instinctively respond.”

As the mass of data accumulated, it revealed something surprising. Companies that responded to the pandemic by hiring staff rather than shedding workers saw an average 18% increase in their share price relative to their peers in the first six months of the year; those that offered financial help to employees did about 5% better. And the stock prices of companies that closed stores and laid off people trailed those of their peers by 10% or more.