“ESG funds are outperforming traditional indices during this crisis”
Institutional investors already understand this; hence the flows we have been seeing lately. However, he explains that the challenge now is “to convince private investors of the need to incorporate these criteria into their investment decision-making, so that they no longer view ESG as a purely thematic investment, but something that will be part of any traditional portfolio investment decision.”
The last foray of MAPFRE AM was the launch of the Fondo Compromiso Sanitario fund to fight the pandemic, and this very week the company reached an agreement with Global Social Impact (GSI) to launch a social impact fund to finance companies from frontier and emerging markets. “What this period has done is reaffirm that we are on the right track and that thematic funds that follow an ESG approach are here to stay with a long-term vision. Now, the challenge—which we have already embraced at MAPFRE AM—is to be able to offer thematic investments that are in line with social and investment needs,” adds Ripollés.
At MAPFRE AM, the “three big letters” are already covered, with MAPFRE AM Capital Responsable (E), MAPFRE AM Inclusión Responsable and MAPFRE Compromiso Sanitario (S), and MAPFRE AM Good Governance (G). “Beyond the environmental or good governance solutions that are working well and growing, we believe that, on the SOCIAL front, we must delve into the development of ideas related to health and well-being to further complement our commitment to social inclusion,” he explains.
Rest assured that qualified investors are going to demand more and more information on the impact of investments. MAPFRE AM has been working on this for some time and aims to continue developing its own methodology and impact measurement tools for both liquid and alternative assets. “Measuring the impact of an investment will soon be a requirement that will complement the profitability equation by making sustainable profitability (environmental and social) an additional consideration beyond purely financial profitability. We are working not only in-house, but also through an academic partnership with the University of Siena, in Italy,” concludes Ripollés.