In this regular series, female members of the ESG investment industry detail how they are dealing with the transition to remote working during the coronavirus fallout
Following on from our sister title Portfolio Adviser which has been running the Working from Home series with investment experts from the wider industry, we are running these articles twice a week with women in ESG. This week we speak to chief executive officer of Newton Investment Management Hanneke Smits.
How have you adapted to remote working on a longer-term basis from both a portfolio and workplace perspective?
We have adapted very well. Our business continuity plan became fully operational back in March, and since then all of our teams, including our investment research, portfolio management and dealing teams, as well as our critical systems, have been working remotely without interruption. Our investment teams are speaking regularly on a virtual basis, and our various investment meetings are continuing to take place via virtual conferencing.
Throughout the intervening period, our priorities have been to look after the wellbeing of our staff and to continue delivering for our clients. I am very proud that, in seeking to balance those aims, our staff have been so positive in finding the solutions to make our remote arrangements so successful.
From a workplace perspective, I would observe that, however innovative we are in making our virtual arrangements work as well as possible, we are missing the positive attributes of being in the office. Without the many informal conversations that we have in the course of a working day in the office, we’re having to devote significant energy to trying to maintain relationships across teams.
What has been your biggest contributor to performance since the coronavirus hit markets? What has been your biggest detractor?
The biggest ‘detractor’ in overall terms was the weakness of equity markets during March, which, despite the mitigating effect of more defensive asset classes and instruments, had an impact on our absolute-return funds. In terms of sectoral positions, a number of our key themes, including ‘financialisation’, have had a positive influence. Our technology-focused ‘net effects’ theme has been particularly beneficial in capturing the growing sway of the digital/technology sectors as people realise they can do almost everything online.
What has surprised you most about markets during the coronavirus sell-off?
I’ve been most surprised by how quickly markets have bounced back from their end-March lows. That appears to have been caused by investor enthusiasm for the policymaking steps taken by governments and central banks to see off a solvency crisis in the broader economy. Liquidity conditions seem to have improved as a result, but we generally think the underlying fundamentals of economies and financial markets remain challenging. With the fortunes of companies likely to diverge, we believe a highly stock-specific investment approach is called for.
How do you think attitudes to ESG initiatives will be affected following the crisis?
I have seen some reports which suggest that, as a result of the crisis, ESG-related considerations are now a lower priority than before. We disagree with that assertion. To our minds, attitudes are likely to harden in a positive way, with companies that perform well in relation to environmental and social concerns likely to deliver better performance. If anything, we think the crisis will accelerate the idea that ‘profits with purpose’ will become the norm. In the context of that greater focus on purpose, it’s likely that the greatest risks to the investment landscape and to the planet more broadly (notably climate change) will be very much at the forefront of people’s minds.
Share some good news you have heard recently about the holdings/sectors/themes you invest in?
Our sustainable strategies have continued to outperform – specifically in the energy sector, where old economy (oil) stocks, which we have avoided in those strategies, have been especially weak in recent months.
What do you do for fun when you take a break from working at home?
I have enjoyed doing a number of things during the lockdown: learning a TikTok dance from my daughter, playing online bridge with my husband, my middle son and my Netherlands-based mother, and going for runs and walks with my eldest child. I have also been cooking more plant-based meals.
How do you feel about returning to work in the office? Do you think you will work from home more in the future?
We are not sure yet what the return to the office will look like; my role requires me to be with people, whether virtually or in the office, but there is no such thing as a virtual water cooler, so I am mindful of the challenge in ensuring that we still have our creative sparks. I suspect, however, that we will be working from home more – and it will be a mix depending on government advice and real-estate planning etc.
What do you think our ‘new normality’ will look like?
Realistically, I think we could be in and out of some form of lockdown for months, and possibly for a couple of years. There are likely to be many variables to take into account. The answer, I think, to what the new normality ‘should’ look like lies in combining the best elements of working in the office and working from home where appropriate, as we strive to find the optimal arrangements for continuing to deliver for our clients. As we have done already, we will adjust to whatever circumstances we’re presented with.
What is your favourite sustainable snack?
I have a weakness for dark chocolate, and I’ve discovered a number of sustainable varieties to satisfy my craving!
If applicable, how is home schooling being managed in your household?
We are fortunate that our three children – all teenagers – are largely managing their own responsibilities. The lockdown is clearly more challenging for those with younger children, who require more parental input in order to make a success of their home-schooling arrangements.
Do you have a ‘top green tip’ to share on working remotely?
By the nature of home working, we are all being greener. In the current situation, I do of course walk to work! We were also already well on the way with reducing our use of paper, and the situation has certainly helped with that. Perhaps more fundamentally, I would advocate properly unplugging at the end of the working day – something that’s not just good for the environment, but good for people’s wellbeing too.
To view the previous articles from the Working from Home with … series see below:
Green issuance, Marie Kondo and herb gardens: WFH with Franklin Templeton’s Gail Counihan
Real world outcomes and a daily exercise challenge: WFH with Lazard’s Jennifer Anderson
Advising CEOs, collaboration and peanut butter: WFH with Actis’ Shami Nissan
IT stars, sneakers and webinars: WFH with Janus Hendersons’s Ama Seery
Social conscience, fishing and Christmas risotto: WFH with Hawksmoor’s Rebecca Fournier D’Albe
Safe harbours, team yoga, and Animals of Farthing Wood: WFH with Tribe’s Amy Clarke
Active ownership, hip-hop pilates and natural light: WFH with Federated Hermes’ Kimberley Lewis
Cautious positioning and interactive lessons: WFH with Square Mile’s Diane Earnshaw
Climate debate, board games and weekly podcasts: WFH with Quilter Cheviot’s Claudia Quiroz
Female fund managers, Tiger King and a different approach to home schooling: WFH with City Hive’s Bev Shah
Investment trusts, Jamie Oliver and renewable electricity suppliers: Working from home with EQ Investors’ Sophie Kennedy
Cushioning the falls and home-schooling in French: Working from Home with Morningstar’s Hortense Bioy
Reducing emissions and Morrisons’ corporate responsibility: Working from Home with Kames’ Miranda Beacham
Deadlines, schoolwork and team drinks: Working from home with ESG Clarity’s Natalie Kenway