COVID-19: The implications for ESG

Posted by Macquarie Asset Management

June 30, 2020

As the impacts of COVID-19 continue to be felt around the world, we sat down with the MIRA Sustainability team to discuss how the pandemic might impact investors’ approach to ESG.

Joining us were:

  • Chris Leslie, MIRA Global Head of Sustainability
  • Brooks Preston, Managing Director, MIRA Sustainability
  • Mary Nicholson, MIRA Head of Responsible Investment
  • Chandra Eastwell, Associate Director, MIRA Responsible Investment  
Chris Leslie
Brooks Preston
Mary Nicholson
Chandra Eastwell

How has MIRA been approaching the crisis, and has it impacted your approach to ESG?  

CL: Our priority has been and continues to be the safety and wellbeing of our people, both within MIRA and across the portfolio of assets we manage around the world. For us, COVID-19 has underlined the importance of strong ESG principles and the need for sustainable and resilient solutions. ESG has been a focus for us for many years, and we were already increasing our focus on ESG before the COVID-19 crisis hit as we believe that sustainability and resilience are key to the long-term continuity of our operations. 


We have seen a lot of commentary recently on how the COVID-19 pandemic may influence the ESG considerations of institutional investors – what is your perspective on this?

CL: When we conducted our ESG client survey last year, we found that the focus on sustainability within the infrastructure sector was intensifying. Over 91 per cent of those surveyed planned to increase their focus on ESG over the coming five years. But, interestingly many investors also flagged concerns about their own lack of in-house ESG expertise and the quality of information available from managers1. I think this will change as the pandemic brings the practical implications of ESG during a crisis into sharp focus. We expect to see a greater level of engagement and clarity from our clients on this moving forward and I expect to see asset managers increase their focus as well.

MN: For investors who already cared about ESG, this is further validation for what they already believed. For anybody who didn’t appreciate the importance of considering non-financial factors in investment discussions or decisions I imagine this crisis may change their minds. The concept of resilience is often talked in the context of climate, but how resilient is a company in the face of a pandemic? These sorts of shock events may have been infrequent in the past but it is possible they may happen more often now as we are seeing with extreme weather events. And with global supply chains an event does not have to be local to have an impact on a business. This will likely prompt investors to focus more keenly on sustainability and resilience. 

BP:  ESG frameworks and policies are helpful in good times and bad. Fundamentally, I think the change will be investors looking at the companies they invest in and seeking to understand how each investment creates value and whether the whole package – the operations, the goods, and the consequences of those goods - are sustainable. 

“The global pandemic has sparked a renewed focus on the social dimensions of ESG and companies’ social responsibility.”

Mary Nicholson

Responding to climate change has certainly been high on the agenda for many asset managers and institutional investors in recent years, do you think COVID-19 will distract from this?

CL: I think it will change the conversation and, despite the obvious tragedy of this situation, there could be valuable lessons we learn from this experience. With global travel restrictions and social distancing measures currently in place, fewer people are flying, carbon emissions are down, and the planet is, in effect, catching its breath, and we should play close attention to what happens as this will offer interesting clues as to what may be possible. There are important lessons for us to learn here. In some ways COVID-19 has given us preview of climate’s worst impacts. Pandemics and climate change are both physical risks and they share many of the same attributes and catastrophic consequences. If we don’t act on climate change, we may continue to find ourselves experiencing this type of jarring disruption on a global scale again in the future.

BP: Many governments are starting to integrate sustainability principles into their COVID-19 responses. South Korea for example, has announced plans to aim for net-zero emissions alongside its economic response to the pandemic2 and there are growing calls for the European Green Deal to be used as a framework across the European Union to address both the short and long term economic impacts of the pandemic3.  It is not a case of these countries seizing on one crisis to solve another, it is about learning from this experience and managing physical risks to avoid the type of disruption we are seeing with COVID-19. 

Do you think we will see a greater focus on the ‘S’ in ESG in the future?

MN: The global pandemic has sparked a renewed focus on the social dimensions of ESG and companies’ social responsibility. The S in ESG covers a broad range of factors including health and safety, employee relations and conditions, modern slavery, human rights and much more. These are all incredibly important factors and ones we need to continue to focus on in the future, especially as COVID-19 is disproportionally impacting those who are already most vulnerable. 

CE: The social aspect needs to be carefully considered by governments and businesses now that they are looking to restart the economy. A successful restart will depend on prioritising people’s health, safety and wellbeing. For us in MIRA, as a manager of critical infrastructure and real assets around the world, our priority will continue to be the health and wellbeing of our people. We believe that continuing to focus on all aspects of ESG will place us in a better position to create real and lasting value for our clients and ultimately the long-term savings of the investors they represent. 

Is there a risk that ESG principles will be de-prioritized as countries and companies focus on restarting their economies?

CE: Yes, I think in the immediate term, some companies may deprioritize various aspects of ESG as they focus on survival. The UN is urging companies and nations to ‘build back better’ yet some governments have chosen to relax protection measures in response to the pandemic. In the US for example, the Environmental Protection Agency has temporarily relaxed pollution enforcement.

CL: COVID-19 has shown us the risks of not having clear ESG frameworks and the importance of collaboration and resilience. The pandemic has highlighted how interconnected our world has become whether that be through supply chains, technology or travel. I do believe that maintaining a level of connectivity and an open dialogue when it comes to ESG will be key to navigating a path forward. We have seen first-hand for example, the benefits of sharing information and best practices across our portfolio of assets in recent weeks. The companies that come back stronger will be the ones that focus on long-term sustainability and the resilience of the business. The financial sector has an important role to play in enabling post-COVID economic recovery, particularly long-term investors who can align recovery with sustainable outcomes.

“We believe that continuing to focus on all aspects of ESG will place us in a better position to create real and lasting value for our clients and ultimately the long-term savings of the investors they represent.”

Chandra Eastwell

For more information about MIRA, contact us.

  1. MIRA ESG Survey, January 2020 -


This market commentary has been prepared for general informational purposes by the authors who are part of Macquarie Infrastructure and Real Assets (MIRA), a business division of Macquarie Group (Macquarie), and is not a product of the Macquarie Research Department. This market commentary reflects the views of the authors and statements in it may differ from the views of others in MIRA or of other Macquarie divisions or groups, including Macquarie Research. This market commentary has not been prepared to comply with requirements designed to promote the independence of investment research and is accordingly not subject to any prohibition on dealing ahead of the dissemination of investment research. Nothing in this market commentary shall be construed as a solicitation to buy or sell any security or other product, or to engage in or refrain from engaging in any transaction. Macquarie conducts a global full-service, integrated investment banking, asset management, and brokerage business. Macquarie may do, and seek to do, business with any of the companies covered in this market commentary. Macquarie has investment banking and other business relationships with a significant number of companies, which may include companies that are discussed in this commentary, and may have positions in financial instruments or other financial interests in the subject matter of this market commentary. As a result, investors should be aware that Macquarie may have a conflict of interest that could affect the objectivity of this market commentary. In preparing this market commentary, we did not take into account the investment objectives, financial situation or needs of any particular client. You should not make an investment decision on the basis of this market commentary. Before making an investment decision you need to consider, with or without the assistance of an adviser, whether the investment is appropriate in light of your particular investment needs, objectives and financial circumstances. Macquarie salespeople, traders and other professionals may provide oral or written market commentary, analysis, trading strategies or research products to Macquarie’s clients that reflect opinions which are different from or contrary to the opinions expressed in this market commentary. Macquarie’s asset management business (including MIRA), principal trading desks and investing businesses may make investment decisions that are inconsistent with the views expressed in this commentary. There are risks involved in investing. The price of securities and other financial products can and does fluctuate, and an individual security or financial product may even become valueless. International investors are reminded of the additional risks inherent in international investments, such as currency fluctuations and international or local financial, market, economic, tax or regulatory conditions, which may adversely affect the value of the investment. This market commentary is based on information obtained from sources believed to be reliable, but we do not make any representation or warranty that it is accurate, complete or up to date. We accept no obligation to correct or update the information or opinions in this market commentary. Opinions, information, and data in this market commentary are as of the date indicated on the cover and subject to change without notice. No member of the Macquarie Group accepts any liability whatsoever for any direct, indirect, consequential or other loss arising from any use of this market commentary and/or further communication in relation to this market commentary. Some of the data in this market commentary may be sourced from information and materials published by government or industry bodies or agencies, however this market commentary is neither endorsed or certified by any such bodies or agencies. This market commentary does not constitute legal, tax accounting or investment advice. Recipients should independently evaluate any specific investment in consultation with their legal, tax, accounting, and investment advisors. Past performance is not indicative of future results.


This market commentary may include forward-looking statements, forecasts, estimates, projections, opinions and investment theses, which may be identified by the use of terminology such as “anticipate”, “believe”, “estimate”, “expect”, “intend”, “may”, “can”, “plan”, “will”, “would”, “should”, “seek”, “project”, “continue”, “target” and similar expressions. No representation is made or will be made that any forward-looking statements will be achieved or will prove to be correct or that any assumptions on which such statements may be based are reasonable. A number of factors could cause actual future results and operations to vary materially and adversely from the forward-looking statements. Qualitative statements regarding political, regulatory, market and economic environments and opportunities are based on the authors opinion, belief and judgment.


Other than Macquarie Bank Limited ABN 46 008 583 542 (MBL), none of the entities noted in this document is an authorized deposit-taking institution for the purposes of the Banking Act 1959 (Commonwealth of Australia) or banking legislation in other jurisdictions. The obligations of these entities do not represent deposits or other liabilities of MBL. MBL does not guarantee or otherwise provide assurance in respect of the obligations of these entities.