2021 Sustainability Report

Brown Advisory 2021 Sustainability Report

Our Response to COVID-19

Like the rest of the world, we were shaken to the core by the rapid onset of the COVID-19 pandemic. Our hearts are with those who lost loved ones or were otherwise impacted by the virus, as well as the front-line healthcare workers and first responders who have and continue to put their health at risk daily to deliver care.

Fortunately, the intense effort to develop and distribute vaccines appears to be paying off in many regions of the world. In most of the communities where we do business, life is gradually returning to normal, and we are all grateful to be returning to our offices and seeing our fellow colleagues in person—in many cases for the first time in 15 months. At the same time, we are heartbroken for the places where COVID is still running rampant, vaccine supplies are falling far short of what’s needed, and health systems are being overwhelmed.

Serving and Communicating With Our Clients

We were surprised by the need to rapidly move to a work-from-home posture in March 2020, but we were fully prepared, thanks to excellent business continuity planning by our executive and operations teams. Thanks to their efforts, as well as that of our highly proactive and adaptive pandemic task force, we provided uninterrupted service to our clients, provided comfort and assistance to our fellow colleagues, and supported our communities during an extremely challenging period. 

Our highest priority always is delivering for our clients, and that did not change during the pandemic. Before it became a certainty that we would need to close our physical offices, we asked all colleagues and departments to “practice” working from home on several occasions, so we could iron out any technology-related issues at an individual level and to encourage teams to work on remote communication and meeting effectiveness. When the time came, we were ready, and our colleagues and teams moved to the remote environment without the slightest hitch in productivity or client communication.

As a firm, we wanted to make sure we were in touch frequently with clients about our plans and actions in response to the pandemic, so our CEO and CFO, Mike Hankin and Dave Churchill, wrote letters to all our clients on a weekly basis during the first three months of the crisis, and at several points over the course of the year that followed. These letters shared details of our operational steps to ensure uninterrupted service, offered some of our thinking regarding how the pandemic might impact our investments. They also provided a window into how they and the rest of the firm were feeling about the pandemic, and the transparency of these notes were greatly appreciated by clients and colleagues alike.

Onsite Protocols/Offsite Capabilities

Within a month of entering a remote working environment, our COVID-19 task force began building an office reopening protocol. 

The threat of the virus waxed and waned several times throughout the pandemic period, and our office protocols frequently needed to adapt. We went through several cycles of opening offices under strict guidelines for a period, then needing to close them once again. When conditions permitted, we were able to provide an extremely safe environment in our offices for colleagues, by ensuring limited numbers in the office at any given time, strict compliance with mask and distancing guideline, an intense deep-cleaning regimen in all offices, and temperature screening and on-site rapid testing. 

In the past few months, we have taken steps to strongly encourage and support our colleagues in obtaining vaccination, and as of this report’s writing, most of our colleagues are vaccinated, with some of our offices reaching 100%. With CDC guidance and state regulations generally moving toward a full lifting of all restrictions for vaccinated people, we are looking forward to a return to normal office life.

Benefits and Wellness

Throughout the pandemic, we enacted many new benefit policies and programs, and adjusted existing policies, to better support our colleagues during this period. Over the past year, we:

• Expanded our telemedicine program to cover doctor visits of all types as well as behavioral health visits.
• Created and actively maintained a resource center on our intranet with a wide range of information and services to support colleagues physically, mentally, and emotionally.
• Expanded our gym and fitness center reimbursement program, to allow colleagues to use those funds for mental health apps, child online learning tools and mindfulness apps.
• Relaxed our wellness program requirements (this program provides monetary incentives to colleagues who complete a series of health tests and health education programs), to include at-home test kits, so colleagues could still receive their wellness incentive.
• Relaxed our prescription refill waiting periods, so those covered under our health plans could pick up their prescriptions early during their less-frequent trips out of the house.
• Actively promoted our existing Bright Horizons back-up childcare benefit, to help ensure support for working parents.
• Changed our 401(k) plan to assist colleagues during the pandemic, by expanding withdrawal and loan options, increase loan and withdrawal limits and allowed participants the ability to suspend loan payments.
• Conducted a lengthy series of “Wellness Wednesday” webinars as a service for all colleagues and their families. Webinars covered a wide range of topics such as nutrition, working from home and navigating the uncertainty of the pandemic. Participation in these events ranged from 20% to 30%.

Investment Considerations

A side effect of the pandemic has been, in our observation, a broadening of client interest in sustainable investing. Several takeaways from this period—the early environmental benefits observed during prolonged economic shutdowns, and heightened awareness of the disproportionate impact of the pandemic on under-represented and underserved populations, as well as a general reassessment of priorities during the past year—have led many of our clients to inquire about how they can better align their portfolio investments with positive social and environmental outcomes, and/or take steps to reduce exposure to investments that are a part of the problem as they see it.  

For the most part, our investment decision making has not been notably affected by the pandemic. Whether we are selecting stocks and bonds for our equity and fixed income strategies, allocating balanced portfolios, or selecting managers to recommend to clients, we are long-term investors, and generally, our decisions are not dictated by the near-term oscillation of economic conditions or investor sentiment. We have, however, been able to view companies and managers through a “COVID-19 lens”—the pandemic has allowed us to see how management teams perform in the face of a real challenge—how they treated customers, how they supported colleagues, how they navigated rapidly changing conditions—and discover which were able to rise to the occasion. We hope that our observations will benefit our investment decisions going forward.