The axe fell with shocking suddenness. On Thursday Aberdeen Group plc terminated its Financial Fairness Trust without notice and sacked the CEO, Mubin Haq, the chair and all the trustees, leaving eight staff dangling. The company tells me it plans to move in a different direction. That dreaded phrase marks the end of 16 remarkable years, during which the trust sponsored some of the most influential research into inequality and its financial causes.
Aberdeen is a wealth management and investment company. I admired its willingness to fund research not in its own immediate interest, but for the sake of social improvement, as a sign that decent capitalism was possible. Now that’s over. The mood has changed. Wildfires started by President Trump are engulfing global companies as his administration attempts tobar asset and retirement plan managersfrom considering environmental, social and governance (ESG) factors in investment decisions and targets private sector diversity, equity and inclusion (DEI) initiativeswith executive orders. Companies doing good are at risk. I ask Aberdeen if that’s why it has shut down the trust. It denies it strongly, saying it is just a “natural evolution”.
Expect an explosive backlash. Just look at the list of research organisations it has previously given funding to but is now casting off: the Institute for Fiscal Studies (IFS), the Resolution Foundation, the Royal United Services Institute, Bright Blue, the New Economics Foundation, the Centre for the Analysis of Taxation (CenTax), the Child Poverty Action Group, the High Pay Centre and Transport for All. It has also funded funeral poverty research by Quaker Social Action and consumer research by Which?. The trust has £3.6m of grants promised, in a field where small sums for social research projects can profoundly affect policy and politics. Paul Johnson, the outgoing IFS director, says this money is “a crucial part of the UK’s research funding infrastructure focused on improving the financial security of those on lower incomes”. He talks ruefully of billions of pounds for scientific research but a pittance for social research. “We have no Large Hadron Colliders.”
Aberdeen should beware the swathe of distinguished economists, researchers, academics, public servants, public thinkers and charitable entrepreneurs it has unthinkingly cut off in this political assault. The trust was founded in 2009, using unclaimed assets after the demutualisation of Standard Life, which later merged withAberdeen Asset Management. Last week, its website shut down instantly, with the misleading notice “Please bear with us and we will aim to resume normal service as quickly as we can”. There will be no normal service.
David Norgrove, the summarily sacked chair, is not going quietly. Neither is he someone to be treated so high-handedly. He is a former chair of the UK Statistics Authority, the Pensions Regulator, the Low Pay Commission, the M&S pension fund, the Family Justice Review and more. He is outraged at how the trust was cancelled in a day. “Shoddy behaviour,” he says to me, then adds: “Abrupt, rude, ungracious.” This will, he says, “be damaging to them”.
Aberdeen did lose£5bn in net outflowsin the first quarter of this year – its share price has somewhat revived since – but says all the funds will still go to charity. I ask if there is a guarantee that the latest £3.6m of grant funding letters will be honoured. The reply is weaselly: “The various funding relationships will be under review and that will include looking at what contractual commitments are in place, so it’s too early to be definitive.” CenTax is a grant recipient left in limbo over the future of its promised three years of funding. This week the trust was about to start on another £2m round: due for grants were the Living Pension Foundation, to sign up 500 companies to join Aviva, L&G and others pledging more livable pensions. The Child Poverty Action Group will now get no funds for an annual forensic review of child poverty strategy, nor will the High Pay Centre receive money for research into remuneration committees that focuses on entire workforces, not just top executives.
Why is Aberdeen trashing its reputation? Because times have changed. Doing good is not fashionable in the business world. Johnson says: “I presume some of the trust’s funding is not compatible with Aberdeen. It’s an overreaction to our research on pension tax relief, or the Resolution Foundation’s work in wealth tax reliefs.” Most social research is funded by the Economic and Social Research Council and the Nuffield Foundation, but he says after the trust, there are “no significant others”. Aberdeen says the only reason for the change is to divert its funds to a conventional charitable foundation that supports individuals, such as young unemployed people – although this is funding that won’t lead to a larger questioning of social, financial or tax systems.
The company is already famous for idiocy – it abolished the Es in its name in 2021 to become the unpronounceable “Abrdn”, claiming it was a “modern, agile, digitally-enabled brand”.Mocked for “irritable vowel syndrome”, it joined disaster rebrands such as Royal Mail’s Consignia and PwC Consulting’s Monday. It makes you question any decisions their boards make.
But this is serious. It’s a symptom of darkening business attitudes.Research this month showsthat 56% of senior financial professionals in the UK now “believe their leadership will place less focus on ESG principles over the next five years”. WPP, one of the largest media companies in the world,removed all mentions of DEIfrom its latest annual report. Research by the Observer found that mentions of ESGdeclined by 22%in last year’s annual reports from FTSE 100 companies. Amazon is scaling back its DEI policy, calling this civilisational regression an “evolution”.
Former trustees suggest Aberdeen may have had complaints from clients who hate research about poverty and wealth that exposes unjust tax reliefs for the rich. When I ask, its press officer does admit he sometimes has to tell journalists from the Telegraph and others that Aberdeen Group plc is not responsible for the research its trust may fund: every trust-funded report has a disclaimer saying the trust is entirely independent of the company. This turns out, sadly, not to be true, since Aberdeen can cancel it at whim.
This week will mark the launch in Westminster of a trust-funded two-year commission into pensions by the IFS, with the former minister David Gauke chairing its advisory committee and Torsten Bell, the pensions minister and former head of the Resolution Foundation, speaking. The chair of Aberdeen Group, Douglas Flint, who is due to attend, may find himself less in favour than when he was invited to join Labour’s City advisers as part of a financial services review. He lobbies forless regulation of banks, calling the post-financial-crash restrictions ”disproportionate”. If I were him, I wouldn’t dare turn up.
Polly Toynbee is a Guardian columnist