Now is a time of transformation for BBH — it’s a time to reimagine our future. Throughout our long history and today, our values as a firm and as individuals, our commitment to sustainability, and our desire to positively impact our clients, our people, and our communities remain at the center of what we do.
In this report, our third annual, we detail the progress we’ve made in our ten sustainability focus areas during a time that we could hardly have imagined five years ago when our Sustainable BBH program was created. 2021 was a complicated year—for our firm, for each BBHer, for the environment around us, and for the safety of citizens and democracies across the globe. The global COVID-19 pandemic, now transitioning to endemic, and with it a second year of BBHers working primarily remotely, continued to present a number of challenges to our close-knit business culture. Increasing concern around climate change and its ramifications, natural and man-made disasters including an unnecessary and destructive Russian invasion of neighboring Ukraine, and the announcement of the transformational sale of our Investor Services (InServ) business to State Street Bank all put strain on our people individually and our organization collectively. They challenged our progress but also in many cases fueled and inspired us forward. Throughout this time, we realized that there has never been a more important time for BBHers to embrace our core values, reimagine our future, and commit to a path that’s both sustainable and beneficial for our clients, our people, and our communities.
With all these external stresses, it has also been an exciting time packed with new challenges, through which our employees have remained extraordinarily committed, driven, and resilient as we redefine what our business will look like in the future. In September 2021, we announced the sale of our InServ business to State Street and then began the process of preparing for the integration of the two*. Our InServ business has grown exponentially over the last 25 years and combining it with one of the largest and most successful securities servicing banks in the world presents a unique opportunity to allow InServ to continue its past growth trajectory without the constraints inherent to a private partnership. Our decision was made after careful consideration of the well-being of our clients, our people, and the InServ business overall which should benefit from becoming an important part of a larger global platform. This transaction simultaneously provides our Private Banking and Investment Management businesses with both space and capital to continue their own growth path where the partnership will focus singularly on delivering excellent investment capabilities, capital, and advisory services to clients.
As our businesses evolve, our commitment to sustainability—both BBH’s and our own personal commitments—remain a constant. Part of our planning on how and where the BBH of the future will have impact involves taking into account, directly or indirectly, those issues that matter most to our clients, to our communities, and to all BBHers. We are among the most motivated and driven workforces in the industry, and we will continue to prioritize—whether on our own or in concert with State Street—those things that we are deeply committed to. Companies such as ours have a central role to play and we take that responsibility seriously.
The issues we face as a global community do not fall into simple categories and they are not bound by a single calendar year. As a result, our goals are nuanced and long-term. When we look back over the last five years at our collective sustainability efforts, there is much to be proud of. We joined the UN Global Compact and became signatories of the UN-supported Principles of Responsible Investing (PRI) through our Investment Management business. Both organizations required us to examine and modify our practices to meet or exceed international sustainability standards. We launched our Supplier Code of Conduct which has enabled us to exert positive influence throughout our supply chain and demand that those we choose to do business with follow guidelines, policies, and practices which are aligned to our own. In addition, we established and communicated a comprehensive set of goals for our diversity, equity, and inclusion efforts and conducted a global environmental analysis to inform our future BBH workplace environmental goals. Now, as I look back on 2021 from the vantage point of mid-2022, I am gratified by the ongoing efforts we are making as a firm and as individuals and am pleased to reflect on some of the progress I am most proud of.
Future of Work as Pandemic Becomes Endemic
2021 began with the introduction of new vaccines that have helped us gain greater control over COVID-19 and appears, as of this writing, to be easing us from pandemic to endemic. But that change brings along with it an entirely new set of challenges. What are individuals’ risk tolerances? How do we structure our return to office program to find the right balance between time in the office and the flexibility that remote work allows? Most agree that collaboration, innovation, and social intercourse all happen best in person and fuel our unique BBH culture. Yet we have been surprised during the pandemic by how productivity metrics have broadly increased. As we define what hybrid in-office work looks like at BBH, we will do so understanding that each BBHer works differently, values flexible remote-work versus collective in-office work differently, and appreciates the value of BBH’s unique culture differently. Getting this balance right will no doubt take time and experimentation and we look forward to taking the next step in that journey.
With the second full year of social distancing came increased attention on the effects of prolonged isolation on mental health, the need for in-person care for children attending remote school and elderly relatives, and the health concerns of reemerging from social distancing back into our pre-pandemic routines. 2020 provided us with valuable insight into what it was like for our employees to navigate unprecedented personal and professional hurdles while working in isolation. We responded in 2021 by hosting over 150 mostly virtual events targeting employee well-being and we also continued our global “#LetsTalk” programming addressing employee and family mental health. The open and honest conversations we engaged in around these sensitive topics demonstrated a shared interest in helping one another by talking, free of any stigma, about mental health at work.
A Renewed Focus on Climate Change
In the fall 2021, The United Nations Climate Change Conference, known as “COP26,” was held in Glasgow, Scotland. It brought together world leaders from 200 countries to accelerate action in the fight against climate change. One of the specific goals of COP26 was to keep alive the hope to limit the rise in global temperature to 1.5 degrees Celsius. The Glasgow Climate Pact, a biproduct of the conference, does just that. For our part, BBH is focused on, and committed to, running our operations—particularly our facilities—as efficiently as we can.
To better understand our impact, and thereby to set informed goals for the future, in 2021 we embarked on developing a Green House Gas (GHG) emissions inventory. Our inventory included Scope I, II, and III GHG emissions for 2019 and 2020. We worked with an outside consultant that also recommended improved reporting, strategies to address data gaps, and opportunities to reduce GHG production. We look forward to further defining our goals and setting a timeline for progress as we examine and assess the smaller GHG footprint we expect in the future.
Not surprisingly, our clients also care deeply about climate protection and want to create positive impact through their investments. We are increasingly working with our Private Banking clients to identify their values, priorities, and missions to help translate them into action. In our Investment Management business, we perform in-depth, fundamental analysis featuring ESG factors to support both our equity and fixed income strategies. In 2021 we completed our first annual assessment and climate report as a signatory of the UN-PRI. As part of that assessment, we validated that 100% of time where we analyze financial risk, we analyze ESG risk. Additionally, 79% of our AUM is managed by managers who have confirmed they operate according to a formal ESG policy statement. I am particularly excited about our plans to reinforce our investment team with accountable leaders in ESG integration and sustainable investing in the near future.
War in Ukraine and Supporting Our Global Communities
As I write this well into 2022, Russia’s unprovoked invasion of Ukraine continues. By initiating an unnecessary and cruel military assault on its neighbor in late February, Russia has caused a humanitarian crisis resulting in millions of Ukrainians being displaced and fleeing their homes. Our collective reaction of disbelief, horror, and rage was swiftly channeled into constructive action around the globe and across BBH. In particular, BBHers in Poland were active contributing their time at the Ukraine border, assisting refugees including taking some into their homes to provide food and shelter.
As a firm, we responded by making a donation to the Polish Red Cross; we established new job openings designed specifically for Ukrainian refugees; we provided additional flexibility for BBHers to volunteer their time at the local level; and we established an Amazon Wish List so BBHers across the globe could purchase basic supplies Ukrainian refugees desperately needed like socks, undergarments, and diapers. I'm particularly proud of all the BBHers who sacrificed in large and small ways to support Ukrainian refugees fleeing into Poland and elsewhere in Europe.
Making an Impact in the Future
As we look to the future, there’s no doubt our firm faces a transformational change and will be very different in the future versus how we look and operate today. What will not change are our values. They have remained constant since Alexander Brown and his sons founded our firm over two centuries ago and they will be with each of us into the future. Going forward, we will examine and assess our ongoing goals and the focus areas we have described in this report to ensure they are still relevant and afford us the opportunity to make a material impact in the future, whether as a smaller BBH with a narrower focus or as a business line that has combined with the larger State Street. The smaller footprint of BBH in many ways represents just the next chapter in a multi-century period of constant change and evolution. While this is a time of transformation for all of us—and a time to reimagine our futures as individuals and business organizations—the values we each bring with us, including our shared commitment to sustainability and to making a positive impact on our clients, our people, and our communities remains strong.
- William B. Tyree, Managing Partner
*We believe that regulatory reviews should becomplete in the coming months.
Based on 2021 data
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