TWO STUDIES FROM THE UNIVERSITIES OF SIENA AND CRANFIELD SHOW THAT INVESTMENT IN COMPANIES WITH GOOD CORPORATE GOVERNANCE IS MORE PROFITABLE IN THE LONG TERM
Today in Madrid, Professors Constanza Consoladi of the University of Siena and Sunil Poshakwale of the Cranfield School of Management each presented a study revealing that investment in companies which are socially responsible and have good corporate governance are more profitable in the long term.
Consoladi specifically explains in her treatise (“Focusing on G within the ESG Framework: Does it pay off?”, University of Siena 2016) that companies with high scores in corporate governance rankings tend to display higher rates of return on their assets, net profit and growth and invoicing margins than those with a low qualification in these factors.
Poshakwale, for his part, reaches a similar conclusion in his study “Empirical evidence of good governance and firm performance in Europe” (Cranfield School of Management working paper 2016) after analyzing 357 non-finance companies with market capitalization exceeding 5,000 million euros in 15 European countries. “Companies with good governance and high quality management perform more positively than those lacking in these elements.”
In this context, MAPFRE has taken advantage of this to present its commitment to investment in Environmental, Social and Corporate Governance (ESG) with the launch of its new Good Governance Fund, a mutual fund that combines investment in value and good corporate governance.
“For a company like MAPFRE, which is totally committed to responsible social action, it is important to gear investment strategy toward companies in which governance is also an integral part of their DNA. Furthermore, as these studies show, they are more profitable in the long-term and it is important to make a qualitative selection of the same, it is not enough to simply meet certain requirements” explains José Luis Jiménez, corporate general manager for Investment at MAPFRE.
This is the first fund of its type managed and marketed in Spain. The Good Governance Fund will be available shortly to investors via the Inversis and Allfunds platforms.
MAPFRE INVERSIÓN is MAPFRE’s specialized long-term savings solutions business, with more than 65,000 million euros under management. MAPFRE AM is the Group’s fund management company in Spain. Its investment philosophy combines the creation of long-term value with equity protection. Its main strengths lie in both European variable and fixed income and in asset assignment.