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FINANCE | 11.25.2020

A financial and academic view of the social dividend

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Leading experts from both the financial and academic world participated in the first annual MAPFRE Sustainable Finance Observatory forum.

During the second session, José Luis Jiménez, MAPFRE Group Chief Investment Officer, Santiago Satrústegui, Abante CEO, and Ana Fernández Laviada, Professor of Financial Economics, Executive Director of GEM España and Director of the Cantabria Yunus Center at the University of Cantabria, discussed ‘Financial Profitability and Social Dividend.’

According to the MAPFRE representative, “There are many definitions of what sustainable finance actually is, but to me, it’s about finance that puts people at its center, finance that strives to leave the world in a better place than we found it.” He mentioned that MAPFRE is concentrating on the ‘S’ of ESG, in other words the social aspect. That is why an industry-exclusive fund—MAPFRE AM Inclusión Responsable—was launched. It rewards companies that focus on including people with disabilities in the workplace. Iberdrola was awarded in this year’s event precisely for this reason. “We were able to measure how MAPFRE’s balance sheet is affecting the achievement of SDGs. The fact that we’re moving in the right direction is a sign of our commitment,” he explained.

Satrústegui, meanwhile, influenced investors’ appetite to provide support, but they need to be told how. In that sense, he referred to regulation, but also to self-regulation: “Don’t let it be enforced, but acceptable.” “Sustainable finance has to help guide investors in making their decisions to seek to make the world that little bit better. In this sense, there are two levels of sustainability. The first is to not ruin what’s there, i.e. investors investing in things that don’t cause harm, and the second is impact, i.e. measuring the positive impact of what you’re doing,” he added.

All speakers provided reassurance that sustainable finance is here to stay. “Victor Hugo said there’s nothing more powerful than an idea whose time has come. The time for sustainable investment has come,” said the Abante CEO. Moreover, the pandemic has accelerated this phenomenon. The University of Cantabria Professor provided by way of an example the multitude of events that have taken place in the academic world and internationally in November alone. “Activity is becoming quite hectic. It’s here to stay and there will come a time when it will be seen as normal, something integral to the DNA of companies. Plenty of people are working on sustainable finance and how it relates to the social and environmental impact. It’s a movement that is becoming ever more prevalent,” explained Fernández Laviada.

The speakers also agreed that academia’s role is key when it comes to raising awareness of the importance of sustainable finance. Jiménez explained that “We publish one or two pieces of research every year — these are conducted objectively by third parties in an effort to contribute and transfer this knowledge to society more broadly. We are moving forward so that this knowledge can lead to improved profitability for our clients.”