This post by Emily Dwyer and Lisa Fillingame Abraham of Brown Advisory is part of a series in which IEN members will share their thinking about intentional endowment investing in the face of this global pandemic. Follow along to get insight into the new challenges and opportunities we as a network are facing.


Emily Dwyer, Senior ESG Equity Research Analyst and Lisa Fillingame Abraham, Senior ESG Fixed Income Research Analyst, Brown Advisory

In times of crisis, companies show through their actions through how they prioritize various stakeholders, and how they balance societal concerns and profit motives. In some cases, companies are simply responding to government mandates or industry-wide pressure, but when they have a real choice in their path forward, we can get a glimpse at their corporate culture.

The COVID-19 crisis has given us just such a glimpse at many companies’ priorities. Sending employees home, closing stores, waiving fees and charges—these acts in response to COVID-19 may decrease a firm’s earnings in the short term, but may also lead to stronger employee morale, customer loyalty, and brand value in the long term. Further, companies that find a role in addressing this crisis can use this opportunity to do well in the world and to chart new long-term business opportunities, even if their efforts to help during this crisis hurt their bottom line in 2020. 

For many years, we have used our ESG research process to examine a wide range of factors that we believe influence a company’s long-term health and prosperity, such as employee treatment, customer care, health & safety, and other responsible management practices. These factors are always meaningful for companies, but the global pandemic has greatly amplified their importance. In our recent conversations with management teams at our portfolio companies, we have heard directly about the unprecedented challenges these firms are facing. Impressively, they are not only rising to the occasion to do right by their customers and employees, but many of them are contributing to a burst of innovation and creative thinking across the corporate landscape in a widespread effort to address the consequences of COVID-19. Every company faces different circumstances and is responding differently, but across our portfolios, we are seeing a mosaic of approaches and solutions emerge which gives hope and optimism—certainly for the long-term prospects of many of these companies, and for society’s broader recovery from this crisis as well. In short, we believe their actions demonstrate what it means to be a sustainable business.

Here are a few examples of how some of our holdings across our equity and fixed income strategies are responding to COVID-19. 


Ecolab is in the business of helping customers sanitize and maintain “clean” workspaces, from hospitals to restaurant kitchens and hotel rooms. The company produced several of the EPA-approved disinfectants that effectively remove COVID-19 traces when used with proper protocols. In a March 25 update, Ecolab reported a massive increase in demand for various product lines—triple the normal demand for hard surface sanitizers and a 15x demand increase for hand sanitizers. It has rapidly stepped up its sanitizer production to five times its normal volume. It also reported higher demand for more advanced technologies—such as the solution offered by Bioquell, a recent acquisition, which uses a vaporized hydrogen peroxide-based process for decontaminating physical spaces—and it is focusing on educating customers on the use of these technologies.

Of the company’s 130 manufacturing plants, 128 continue to run. Ecolab has implemented comprehensive social distancing protocols at all of its sites—shifts, lines and individual employees are all being isolated and separated—as well as heightened hygiene practices to protect its employees. Ecolab has also instituted a number of protocols for its field employees, who remain at work helping customers in a way that minimizes risk to both customer and employee.

CVS Health 

Our sustainability thesis for CVS is rooted in its ability to provide access to affordable health care around the country. More than 50% of Americans live within 10 miles of a CVS MinuteClinic, and services provided at MinuteClinics can cost up to 90% less than at urgent care centers or emergency rooms. 

We are finding that CVS’ reach has helped it quickly respond to the needs of customers during this outbreak. It is establishing COVID-19 testing sites in its parking lots, and early on during this crisis, it announced free prescription delivery as a way to enhance social distancing. Further, the company is waiving copayments for Aetna members (CVS and Aetna merged in 2018) for all telehealth visits—not just COVID-19-related appointments. Not only does this relieve stress on the healthcare system (encouraging telehealth visits can cut down on physical trips to doctors and hospitals), but it highlights an area of CVS’ business that it is looking to grow.

With regards to employees, CVS is addressing the fact that its many of its front-line workers are part-time employees without comprehensive benefits packages. Part-time workers are now being provided with paid sick leave—this is on top of the 14-day paid leave provided to any employee who tests positive for COVID-19 or needs to be quarantined. And beginning in April, full-time and part-time CVS employees will be entitled to support for child and elder care, so that they can still go to work and know that their family care is covered. Additionally, the company has started awarding bonuses to pharmacists and other employees on the frontlines, including store associates, managers, and hourly employees.


Microsoft’s software, network, and cloud technologies drive productivity at millions of enterprises around the world, and during this crisis, the importance of networking technology has become that much more critical to businesses who have needed to move day-to-day operations from the physical to the virtual world. In mid-February, Microsoft began offering a free six-month trial for its Microsoft Teams collaboration solution; daily active users jumped to 44 million in March, from just 20 million in November 2019. In late March, the company stated that it has not yet confronted capacity constraints, but if it does, “top priority will be going to first responders, health and emergency management services, critical government infrastructure organizational use, and ensuring remote workers stay up and running with the core functionality of Teams.” 

Microsoft technology is also supporting patient care and COVID-19 research. It recently released a new platform to help customers share information and collaborate during a crisis; more than 2,000 customers have already installed it. Swedish Hospital and other local hospitals in Seattle are using Microsoft solutions to manage their bed count and inventory of critical supplies and to share that information with others across the region. Johns Hopkins University has created an interactive dashboard to visualize and track COVID-19 cases in real-time; the dashboard is hosted by a Microsoft solution partner, on the Azure cloud. In late March, Adaptive Biotechnologies and Microsoft expanded an existing partnership to work on decoding COVID-19 immune response and providing open access to that data; they are hopeful that this differentiated approach can improve detection methods and inform vaccine discovery for COVID-19.

An additional note: Microsoft uses vendors for a variety of services, who employ hourly workers on contracts to serve Microsoft’s ongoing needs. Microsoft has confirmed that it will continue to pay all of these regular hourly wages, even if those hours are reduced because of COVID-19 concerns.

Fannie Mae and Freddie Mac 

Both of these linchpin mortgage lenders have implemented programs to support homeowners and renters that may be facing financial hardship during this crisis. These include the suspension of foreclosure sales and evictions for single-family housing and grants of forbearance for multi-family property owners with the requirement that they suspend evictions of any tenants facing COVID-19-related hardship. 

We view these measures as especially important—at the level of individual families, as well as for the broader economy. The mortgage-backed and commercial mortgage-backed securities that we hold in our sustainable portfolios tend to be geared towards low and middle-income homeowners and renters; these families are more likely to experience near-term financial hardship as a result of this crisis. We think Fannie and Freddie’s flexibility is not only a benefit for borrowers and renters, but for us as investors as well; if stressed borrowers are given more time to get current on their payments, fewer of them will be forced into default, which destroys long-term value for us and other bondholders.


These are just a few examples of many companies that are taking positive actions during the outbreak; we note that many of our retail-oriented investments, such as Home Depot, Nike and Starbucks have put in place strong programs to care for their employees, and many of our healthcare investments—Bio-Rad LaboratoriesBio-Rad, UnitedHealth Group United Health, Thermo Fisher, Scientific, Danaher, and others—are actively participating in the effort to improve detection and testing for COVID-19, care for its victims, and seek treatments.

What we have highlighted here is mostly positive, but we are also very mindful of potentially heightened ESG risks, including exposure of employees to unsafe working conditions for those businesses that do remain open during these times. We are closely monitoring a handful of these situations, but in general believe that the companies in our portfolios are managing such risks well. 

Just as it is too early to draw conclusions about COVID-19 and how it will impact the economy and society, we think it is too soon to judge companies on the totality of their actions and responses to the crisis. We believe that the ESG research process we have in place is giving us much visibility into how our portfolio companies are reacting. Questions going forward include: How will COVID-19 impact companies’ progress toward their broader sustainability goals? What are the long-term implications for the future of labor and human capital management—for example, will we see shifts to more independent contracting, or a larger shift toward work-from-home arrangements? How will companies handle executive compensation, share buybacks, and other core financial matters in the wake of COVID-19?  We believe that our process can help us seek out answers to these questions and that it can continue to aid in our investment decision-making during and after this pandemic.


The views expressed are those of Brown Advisory as of the date referenced and are subject to change at any time based on market or other conditions. These views are not intended to be and should not be relied upon as investment advice and are not intended to be a forecast of future events or a guarantee of future results. Past performance is not a guarantee of future performance and you may not get back the amount invested.

The information provided in this material is not intended to be and should not be considered to be a recommendation or suggestion to engage in or refrain from a particular course of action or to make or hold a particular investment or pursue a particular investment strategy, including whether or not to buy, sell, or hold any of the securities mentioned. It should not be assumed that investments in such securities have been or will be profitable. To the extent specific securities are mentioned, they have been selected by the author on an objective basis to illustrate views expressed in the commentary and do not represent all of the securities purchased, sold or recommended for advisory clients. The information contained herein has been prepared from sources believed reliable but is not guaranteed by us as to its timeliness or accuracy, and is not a complete summary or statement of all available data. This piece is intended solely for our clients and prospective clients for informational purposes only and is not individually tailored for or directed to any particular client or prospective client.

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