COVID-19 is ‘wake up call’ to drive change: Northern Trust Wealth Mgt. CIO

In an interview with Yahoo Finance's Seana Smith, Northern Trust Wealth Mgt. CIO, Kate Nixon discusses how the pandemic has changed the way people invest. Nasdaq CFO Ann Dennison also weighed in on the conversation.

Video transcript

SEANA SMITH: Today's summit is all about the path forward. And when we think about the path forward when it comes to investing, we're seeing more and more investors place a bigger emphasis on and also prioritize ESG. And I know that this is something that's very important to you and your colleagues at Northern Trust. Just talk to us about how you've seen interest in ESG evolve over the past few years, and where we are today.

KATIE NIXON: Well, it's been such an interesting journey for ESG over the last, really, I would say 24 months. We've always had sort of this bubbling up of interest across our investor base for wanting to learn more about ESG, so we've been having these conversations for quite a long time, but it's been really recently, in the last couple of years, that we've seen those conversations translate into portfolio action. And I guess I can draw it to two things that have happened. Clearly, the pandemic really laid bare some of the big issues that we're dealing with from an S perspective.

So the social unrest and the income inequality that we all experienced and saw over the last couple of years has really, I think, been a wake-up call for investors that they really have the power to really focus on that, and potentially drive some change. Also in the last couple of years, we've had some pretty extreme climate events. And I think that has also laid bare the need to focus on the E of the ESG.

And then finally, I'll say that what we've seen across the families that we work with is really a desire to build a bridge between the generations. And what we've found is that the ESG conversation can really help build that bridge. So clients are using and families are using the conversation to try to engage the next generation into the important conversation about values and about the responsibility that comes with wealth.

SEANA SMITH: And speaking of building bridges through ESG, Ann, you took over as NASDAQ CFO earlier this year. So it hasn't-- it's only been, I guess, just several months since you've taken over this position. And in that very short time, you've already revitalized NASDAQ's ESG reporting. How are you approaching ESG at the NASDAQ today?

ANN DENNISON: Yeah, sure. So I think, for us, you know, what-- the most important thing is not-- it's not a separate thing. So we're making-- you know, ESG is part of our overall strategy as an organization. And so when I think about it, there's two pieces for NASDAQ. One is on the corporate side. We think about our sustainability, and how we report it to investors and stakeholders, and then the commercial side, where we look for solutions to help clients solve problems.

But on the corporate side, you know, it's a journey, right? We're maturing. We're improving our statistics. We're also improving the data underpinning all of the reporting that we do. And so as CFO, you know, part of my duty is to make sure that we're disclosing the right things, and also expanding those things, but also that, you know, investors can rely on it, and that it's standard and they can think about it across industries.

SEANA SMITH: And Ann, talking about disclosing the right thing or the key metrics, I guess what's key when discussing this, or just communicating your ESG vision to investors?

ANN DENNISON: Yeah, I mean, for-- what's key for us is really the transparency and understanding, obviously, maybe not just investors, but more broadly, what all of our stakeholders want to hear from us. And so we're engaging with our investors, our employees, our suppliers, the community, and understanding, you know, 100% of the conversations that we have with investors has some element of ESG as part of that, you know, discussion, whether it's the corporate strategy or the commercial strategy. And really taking what we hear from all of our stakeholders, investors being a big part of that group, and making sure we're listening, we're hearing, and that we're adjusting our disclosures so that they can, you know, evaluate us in a way that they want to.