When BBH planned to publish this inaugural sustainability report in April 2020, little did I know the context from which I’d write this letter. As I write this, as a result of BBH’s response to the COVID-19 pandemic, I am in my home, where I am physically distancing myself from the 96% of the firm’s employees who are also working from home and the 4% who continue to come into the office each day. In the five weeks since the pandemic threat upended our world, I’ve been reflecting continuously on its impact on all our stakeholders, and how the fundamental question of sustainability has become magnified at this time.
Before COVID-19, the firm approached social impact and sustainability by asking, “What role should BBH play in helping to ensure the long-term well-being of our clients, our employees, and our communities?” While that elemental question remains the same, our answers have changed as a result of this trying time. The wide-reaching effects of the COVID-19 pandemic have tested our leadership, our resiliency, and our commitment to service. Thus far, we have performed admirably, but we know that we will face many more challenges ahead.
We believe this cannot be a time for short-term thinking. This must be a time to lean into our values, do the right thing, and to put our stakeholders first.
Our responsibilities during this crisis are threefold:
1. We must be a reliable and trustworthy service provider to our clients.
After years of planning and investing in contingency infrastructure for unforeseeable events, I’m proud that we were able to transition to a business continuity plan (BCP) environment in the early weeks of the global threat with no business or service interruption to our clients. As I write this, 96% of BBH employees are working from home and we are protecting those who continue to work from our offices. For those critical, on-site roles, we are employing rigorous safety measures and distancing, including no inter-office travel and no in-person meetings.
2. We are a stable employer for more than 5,500 BBHers.
We depend on them for our firm’s excellence, and they in turn depend on us. Our employees are navigating many stressors, including the uncertainty and strain of their families’ childcare, finances, and health. We have acknowledged that no one is operating “business as usual” and provided additional resources and flexibility to support their physical, financial, and personal well-being and to mitigate the strain. In addition, we have been open and transparent with our employees that layoffs as a result of the pandemic are not in the BBH playbook. Just as during the 2008 financial crisis, we intend to keep teams together, so we are in a strong position to act on opportunities when the crisis abates. We also increased communication and resources within our Thrive employee wellness program, including employee assistance counseling and flex hours.
3. We are an important contributor to the communities that sustain us.
Our community partners—non-profits focused on basic needs and education—are under unprecedented demand for services at a time when funding and resources are scarce. We want to help, and so the firm and our Partners committed an additional $1.25 million in donations to our Employee Relief Fund and our global charitable partners in 2020. As we continue to navigate these uncertain times, it’s never been clearer to me the important role that a commitment to sustainability plays in positioning the firm to weather, learn from, and grow stronger from adversity.
Even in the years before this pandemic, I can’t remember a conversation I had with a client, an industry peer, or a business partner that did not, in some way, touch on our intertwined concerns of economic stability, environmental impact, social responsibility, and corporate governance. The questions that we, along with so many others, are asking are not easily answered: How do we effectively account for and manage the risks and trade-offs between financial value and social/environmental impact? How do we determine where we can and should make a material impact, directly or indirectly, on issues that matter most to us, to our clients, and to our communities?
The rising enthusiasm for these topics from BBHers, clients, and our external partners is not surprising—we tend to surround ourselves with people who share a long-term outlook and a desire to do the right thing. As this momentum to expand our impact grew, we channelled our energy into forming our new Sustainable BBH program led by a senior governing body and chaired by me. We call it the BBH Executive Sustainability Council.
With the creation of Sustainable BBH, the firm united many existing social and environmental programs and launched several new ones to form a comprehensive bank-wide program. Sustainable BBH has allowed us to take stock of where we are, focus our passion and desire to make a difference, address stakeholders’ concerns, articulate our goals, assess our performance and, ultimately, to direct more attention and resources to these issues.
Among our first formal initiatives, the Executive Sustainability Council recommended that the firm become a signatory to the UN Global Compact. Our Investment Management business is currently reviewing the requirements associated with adopting the UN-supported Principles for Responsible Investment (PRI) with a final recommendation and decision due early in the second quarter of 2020. In addition to these and other partnerships in the inclusion space, we also became a signatory to the CEO Action for Diversity and Inclusion Initiative. These partnerships are significant indications of our commitment and desire to join other organizations to advance these causes which are more likely to succeed if we work together.
As the capstone of our Executive Sustainability Council’s first year, I am pleased to offer this inaugural Stewardship Report. By detailing the firm’s relevant governance structures and our ten sustainability focus areas, this report highlights our most significant goals and opportunities to make a difference, and provides transparency on our progress in 2019. While we have been working in many of these areas for decades, we’ve learned a lot in our first year of
Sustainable BBH, and I’d like to share a few lessons that stand out to me.
What gets measured gets results.
It’s a business truism I’m reminded of time and again. Because it’s impossible or at least impractical to measure everything, we must make decisions about what matters most to advance our sustainability agenda. This report plays an important role in that process, not simply by openly sharing our progress toward achieving our goals, but also as a feedback tool to dynamically refine what our areas of greatest opportunity are. Furthermore, by assigning individual responsibility to improving our measurement results against targets, we find that success follows.
Sustainable BBH doesn’t work as a top-down or inside-only effort.
When we first launched the Executive Sustainability Council, I was encouraged by just how much employee-led work the firm was already doing in this space. The network effect of strong employee engagement and hands-on, enthusiastic leadership makes our BBHcares philanthropic program, our diversity and inclusion initiatives, our affinity networks, and our Thrive well-being and environmental champions so much more powerful and effective. Our employees want to work for a firm with a clearly defined mission and strong values, where the impact we make goes beyond financial performance, and they have the opportunity to help shape and drive that impact forward.
Our efforts across the industry are collective.
We have been inspired by clients and industry partners who have been working on environmental, social, and governance (ESG) issues and publicly reporting their progress for years. With the launch of our formal, comprehensive program, we now find ourselves in our own leadership position where we can learn from those who are advanced and in turn share best practice with our clients and business partners who are closer to the beginning of their journeys. It’s inspiring to think of the collective effect we will have by joining forces on common areas of interest and concern.
Evolving Sustainable BBH
Of all of the areas of impact discussed in this report, the following three are the ones where we made the most progress in 2019. These three areas demonstrate the BBH Sustainability Council’s willingness to address material issues head on.
The evolution of sustainable investing and ESG.
Sustainable investing and the consideration of ESG issues in executing our investment strategies have become a major topic for investment and wealth managers. We have increasingly been discussing these issues with clients as they examine how they would like their investments to reflect their personal values, or the values of the organizations they serve. We believe that inclusion of ESG criteria in our investment process enhances our ability to manage risk and helps our client’s achieve their long-term objectives.
The Codes of Conduct for BBH suppliers and sub-managers.
We recognize that the products and services which BBH provides to our clients are often the aggregation of BBH services plus component services provided by third parties. As a result, for BBH to incorporate ESG criteria into the construction of our products, it becomes necessary for us to more thoroughly understand our business partners’ values and processes. To this end, we launched the BBH Supplier Code of Conduct process in 2019. The Code describes BBH’s expectations for how our suppliers conduct their businesses ethically and responsibly. We have asked all our suppliers who meet our materiality threshold to adhere to the principles of the code, and in this way, we will address 90% of BBH service providers within one year.
The ongoing opportunity for stronger diversity and inclusion.
For several years, we have been working on embedding our commitment to diversity and inclusion in the workplace into all of our policies and practices. We believe strong D&I is good for business. It all starts with making it safe to talk about the challenging issue of underrepresentation on the basis of race, gender, sexual orientation, religion, disability, and age in our work place. To accelerate our progress, we appointed a new Head of Diversity, Inclusion, and Employee Engagement in 2019, bringing closer together aspects of our human resources, communications, and community outreach. Under this new structure, we increased D&I resources, shared more stories to drive awareness and education, and engaged ten new external partners to broaden access to industry resources. This year, most Partners, Managing Directors, and BBH Affinity Network leaders also attended an inclusive leadership workshop designed to generate open and honest dialogue. At the heart of our efforts is a commitment to breaking down perceived barriers that impede trust, fostering a culture of inclusion, and improving the diversity of our workforce.
We take great pride in our legacy of community service, philanthropy, and giving back, built over 200 years. And yet the process of formalizing our commitment through Sustainable BBH has opened our eyes to how much what BBH does in this domain matters to our employees, clients, and business partners. This question of how we make a material impact, directly and indirectly, on issues that matter most to our employees, clients, and the broader community is a challenge that we intend to address together. This report is just another step forward which is designed to further focus our stakeholders, attention on the positive impacts we can make if we work intentionally and effectively. Our goals in forming Sustainable BBH were to accelerate our progress on our ESG goals, to learn and adopt best practices from one another, and to become a leader in delivering for our stakeholders on issues they are concerned about. We are listening. Please be in touch.
We look forward to reporting again in 2021 to share progress against our goals, as well as any minor course corrections we’ll make as a result of your input and feedback.
William B. Tyree, Managing Partner