MAPFRE participated in the PRI agenda—as a signatory to the UN Principles of Responsible Investment—sharing its reflections during a seminar on integrating human rights into institutional investments. Alberto Matellán, Chief Economist at MAPFRE INVERSIÓN, opened the round table with an unequivocal message: Investing in responsible companies pays off in terms of profitability.
Why should investors act on human rights? This question was the focal point of an online seminar organized by a PRI (UN Principles for Responsible Investment), where a specific report was presented and a round table was held with Alberto Matellán, Chief Economist at MAPFRE Inversión, Andrea Gonzalez, Assistant General Director at Spainsif; Mario Enrique Sánchez, Chief Economist at CC.OO; Tulia Machado, Head of Human Rights at Storebrand; Elena Espinoza, Acting Head of Social Issues at PRI; and Antonio Santoro, Head of Southern Europe, PRI.
The organization is developing a five-year plan to implement respect for human rights, meaning that the vision of institutional investors is therefore essential.
Elena Espinosa presented the main conclusions of the PRI report, drawing on the framework of the adoption of the Universal Declaration of Human Rights in 1948 and on another important milestone in 2011 for the business environment concerning the 2011 update to the OECD Guidelines for Multinational Corporations to add a specific chapter in this regard.
Today, more than 180 signatories apply the guidelines to their investments, and 152 companies now publish information on the UN guiding principles of responsible investment, including MAPFRE.
Human rights connection and financial return
Alberto Matellán initiated the conversation by responding on the integration of human rights into investment processes and specific products at MAPFRE. He denied that there is a divide between financial profitability and respect for human rights, as demonstrated by numerous academic studies and the company’s own experience as an institutional investor: if things are done well, profitability comes.
Just as a person’s purpose is not to breathe, but they must do so in order to fulfill their other purposes, financial profitability is necessary in order to meet the objectives covered by the ESG (environmental, social, and governance criteria) in any responsible investment.
Human Rights connect to the heart of the investment strategy in its “S” (Social) factor. “For MAPFRE, it is extremely important that we have specific products and methodologies developed that measure our contribution to the United Nations Sustainable Development Goals (SDGs),” he explained.
“Our experience is that investment, if done well, by integrating all social information, gives us to a higher financial return. We have a [MAPFRE Responsible Inclusion] fund that focuses on companies that support disability, which illustrates this end perfectly,” he said.
MAPFRE has been respecting human rights in its statutes since 1965; its policy develops the group’s commitment pursuant to the highest international standards. In 2017, it committed to the UN Principles of Responsible Investment (PRI).
At the investment level, the in-depth knowledge gained from companies, beyond income statements, enables better investments to be made.
Measure, regardless of cost
Participants emphasized the importance of measuring indicators of respect for social aspects and, in particular, of respect for Human Rights. Mario Enrique Sánchez called for “advancing the type of indicators used,” although important measurable elements currently exist such as the coverage of collective bargaining agreements at the company, health and safety committees, and responsible taxation, which are fundamental to financing social security systems in the countries in which it operates.
Matellán continued to highlight the quality of corporate accounting, an aspect to which MAPFRE pays particular attention in its investments, or in the case of disability, to measure policies and find out whether they are adjusted to the various different types of disability (mobility, intellectual ability). “The majority of in-depth knowledge is obtained through open-ended questions. It’s very expensive,” he admitted.
The procedures for supervision and control of the companies in which MAPFRE invests are thorough and include its own methodology in collaboration with its partner La Financière Responsible (LFR). “We supervise thousands of companies with their own questionnaires, in which there are indicators that do not feature elsewhere that relate to disability or good governance, many of which are open-ended. When we get to the site, analysts review it and interview the company before making an investment, which is essential. But this is very costly in terms of time, effort and money. If we want to scale respect for human rights in investment even further, we must take that into account.”
In other words, we must want to invest in this, but investors must pay close attention to all these matters.
The seminar also discussed regulations, touching upon the European Parliament’s demand for greater corporate responsibility in the field of human rights. One in three companies in Europe discloses due diligence information, so it is an area that exists: the experts said that a European framework would provide a lot of legal clarity and would make it possible to understand the rules of play common to large companies, SMEs and so on.