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More than half the responses indicated that companies intend to step up their focus on workers, consumers and societal impact as a direct response to the pandemic. This change was most pronounced in EMEA/Latin America, with 75 per cent of respondents saying that Covid-19 will lead to a greater focus on social issues, followed by Asia (ex-Japan and China) at 63 per cent, albeit from a lower base as captured by the annual Fidelity Analyst Survey.
Companies are prioritising the health of their staff, with businesses from just about every region and sector planning to devote more attention to employee safety, satisfaction and wellbeing. This is likely to take the form of better workplace conditions and, in some cases, higher pay. But changes will also run deeper and broader to embrace consumers and wider society.
For example, analysts reported that European telecoms companies have offered free data and devices to vulnerable people, as well as support to hospitals and governments. North American IT groups are ensuring priority access to technical equipment for healthcare providers. In Europe, meanwhile, firms involved in the production and supply of consumer staples are taking an increasing role in public hygiene initiatives.
Healthcare and pharmaceutical companies have a difficult balance to strike. The pandemic has presented an obvious opportunity both to help society and lift sales, but firms are keen to avoid being seen as profiteering from the pandemic. As a result, a North America pharmaceuticals- industry analyst said: “Many of my companies are now developing vaccines, with plans to distribute the vaccines (at least initially) at cost (price). This could obviously be a large positive for ESG perception of the sector and may separate the more ethical players from those trying to profit from the situation.”
The survey responses point to the pandemic accelerating a trend evident in the last few years of a broad tilt towards stakeholder capitalism, which is already leading many larger companies to prioritise the needs of society and their employees over shareholders. Being a good corporate citizen and supporting local communities are now seen as essential to building and sustaining brand equity.
What is more, many of the changes look set to remain in place after the coronavirus has gone. Nearly 70 per cent of our analysts expect some or all of the changes their companies are enacting to be permanent, raising the possibility that in years to come, the pandemic will be seen as a significant milestone on the path to companies taking a more prominent role in driving positive social change.