More than 1,200 kilometers separate Madrid and Paris and the offices of MAPFRE AM and La Financière Responsible (LFR), its French partner. But that distance is reduced to zero when both teams get down to work together. One shining example of this has been the management of MAPFRE AM Inclusión Responsable (MIR), a fund that includes in its portfolio companies that make a special effort to hire people with disabilities.
This product was born a few months before the pandemic that triggered market volatility and was taking action in a relatively unknown space. There is an abundance of funds making investments based on environmental, social and governance (ESG) criteria, but there wasn’t one exclusively focused on the S, namely social, and more specifically on the inclusion of people with disabilities on workforces. It was precisely this differentiation that earned the fund inclusion a few weeks later in a report from the United Nations Global Compact as an example of best practice. “Investor acceptance has been very positive. It is a very novel issue, with a very clear and specific investment thesis and social impact”, points out Alberto Matellán, chief economist at MAPFRE Inversión.
This fund is unique not only in its focus, but also in the methodology it employs. MAPFRE AM acquired 25 percent of LFR in 2017, based on the experience of the French boutique in socially responsible investment. The methodology is based on seven themes with 40 variables, such as Commitment, representing the disability policies applied by companies; Inclusion and Integration; Projects or specific initiatives; Accessibility or architectural barriers; among others. As a result of the analysis, which includes continuous contact with the companies, four levels of compliance are identified: emerging, promise, committed or leading. “It has been a great example of the coordination between the LFR and MAPFRE teams. The future objective is to work with an almost total integration. But when we partnered with them, we understood the challenge of coordinating such disparate teams. The MIR has shown how we have been able to design and build a totally new investment product and methodology from scratch, which is something we can build on in the future and work as a unified team”, adds Matellán.
The launch of this fund was accompanied by the creation of an award. MAPFRE wanted to recognize the efforts of the companies included in its portfolio for their work in enhancing workforce inclusion for people with disabilities. On November 24, as part of the first Annual Forum of the Sustainable Finance Observatory, an award was presented to Iberdrola for the leadership it has shown in its firm commitment to people with disabilities, specifically in relation to the development of projects, policies and workplace adaptability. Recognition was also given to the Centro San Juan de Dios for its more than 60 years in comprehensive care and job integration for people with disabilities and its leadership in Bioethics research.
These initiatives undoubtedly contribute, according to the economist, to greater awareness on the part of companies: “The most satisfactory thing for us, in the social sphere, is awareness – seeing how companies that didn’t previously take disability seriously now ask us what to do so they can improve in that respect. The fund analysis methodology generates added knowledge that we didn’t have at the beginning, but which is very valuable for business management, mainly in terms of eliminating fear on the part of business managers with regards to the world of disability.”
One of the most important milestones achieved by the MIR occurred just a few days ago, when the fund received the SRI Label, a seal created and endorsed by the French Ministry of Finance. MAPFRE AM is the first Spanish fund manager to achieve this distinction for some of its investment funds. The internationally recognized seal is a useful tool for investors seeking to select responsible and sustainable investments. In fact, the goal is to make sustainably responsible investment products more visible to savers in France and beyond in Europe. MAPFRE AM Capital Responsable, another of MAPFRE AM’s ESG products, also received the label. “Having received the French label, possibly the most prestigious in the world, is a testament to the quality of the work done to date and brings us great satisfaction. Truth be told, we were less than surprised when we received the news – we knew ourselves the work that the fund had done, it was just a question of proving it to the French auditors,” says Matellán.
Arriving as it did, in the middle of a pandemic, which has made asset management difficult, has not hindered the MIR fund from achieving a financial return on top of a social one. In fact, such funds have shown greater resilience in times of volatility. “It is important to note that the principal objective of stock selection is to seek out a financial return,” said Matellán, pointing out that “the greatest difference between this and other funds is that we have demonstrated in practice how social-oriented indicators, apparently far removed from financial criteria, can in fact serve as a very good indicator of a company’s performance.” “In particular, if the analysis of commitment to disability is done well and in sufficient depth, it can shine a light on numerous forward-looking companies that are properly equipped to solve problems and thrive in an uncertain world and which can exploit competitive advantages that go unnoticed by the majority,” he adds.
The results are there to be seen: the fund is positive in 2020, exceeding its benchmark by more than five percentage points, a feat made all the more impressive when one considers that that the target companies are all based in Europe, where markets have taken a battering this year. “Rolling out a fund like this just before the pandemic would have been a death sentence under other circumstances, but with this being such a specific fund, it allowed us to demonstrate clearly that companies that operate at their best in uncertain environments are the most sustainable and most likely to survive,” Matellán concludes.