For several years now we have argued that the social theme, and in particular the issue of social inequality, was becoming a major issue for various global economies and for investors, both institutional and retail.
In this paper, we explain why and how we expect the COVID-19 crisis to accelerate this phenomenon in the months and years to come, and also present action levers for investors. Indeed, COVID-19, like all major pandemics in this century at least, is likely to push inequalities higher, in a context where inequalities were already becoming a major issue for societies, economies and consequently investors.
This is crucial because the short-term responses from public policy makers, if they take place, will undoubtedly reshape the economic landscape, in terms of fiscal policies and redistribution, wage policies, regulation, consumer habits and so on. In this environment, investors will need to include the “inequality” dimension in their analysis of companies, and their engagement policies.
In a forthcoming publication, we will explore the reasons why the COVID-19 crisis could result in the merger of social and environmental issues, and how investors can integrate this new trend.