It is hard to have a discussion about the wealth management sector without ESG cropping up. Sustainability is everywhere in the industry now and everyone has an opinion on it. Moreover, firms have a corporate line and various policies on ESG.
The common factor with these policies is that they are largely focused on the ‘bigger picture’. Given the substantial sum wealth management firms have available to deploy, this is understandable.
However, sometimes it may be advisable to look a little closer to home, particularly when it comes to social issues.
Of course, there are many global social issues firms can – and indeed should support. Let’s spare a moment to think of the brave women in Iran protesting following the death of 22-year-old Mahsa Amini in police custody six weeks ago.
Social issues like this should not be ignored – if anything, they should be spoken about far more.
That said, firms should also take care to make sure their own house is in order. Are their own staff and clients happy and healthy and being looked after as well as possible?
Moreover, are their staff’s jobs secure?
This week, thewealthnet revealed that Berenberg has shut its UK private bank. The news came as a shock to many, not least some of its staff. The firm’s most recent hire only started three weeks ago.
The full details are still emerging and we will avoid speculation – we’re not a tabloid after all. The official statement received from the press office simply said: “In an environment of rising operating costs and regulatory complexity, we concluded this business was unlikely to achieve sufficient scale.”
Rising costs and regulatory complexity have not arisen from nowhere. The industry has been talking about increased regulation longer than I have been reporting on the wealth management sector, while rising operating costs have been strong talking points for at least all of 2022.
With this in mind – and baring no other factors in the decision – many may argue staff and clients could have been given more notice. At the very least, perhaps hiring could have been frozen when a closure became a distinct possibility.
From the picture thewealthnet has gathered so far, it does not appear to be a socially responsible way to treat staff or clients.
This is, of course, an extreme example.
However, many firms could go to greater lengths to support employees and clients.
While firms are keen to shout about their wellbeing initiatives, survey after survey suggests employees are more stressed than ever and workloads are increasing. With the cost of living increasing and corporate budgets being squeezed further, this is likely to worsen.
Wellbeing initiatives need to be more than just platitudes and yoga sessions. A company’s culture must emulate these values across all levels and departments.
When it comes to ESG, to avoid greenwashing we should always look close to home and not focus on global issues when our own practices are not up to scratch.
