COMPROMISE | 02.10.2020
MAPFRE is one of the world leaders most fulfilling their social commitment during the pandemic
“The social responsibility of a business is to increase profits” wrote renowned economist Milton Friedman in an article published by The New York Times in September 1970. These words, together with his work Capitalism and Freedom, served as a guiding principle for companies that have since focused almost exclusively on serving their shareholders. But last year, major companies from around the world publicly pledged to be guided by a corporate purpose that goes far beyond profit and to deliver positive results for society.
In fact, 181 Business Roundtable (BRT) chief executive officers signed a statement committing to leading their companies in a way that benefits all their stakeholders — clients, employees, providers, communities and shareholders. Its main message, backed by giants including JP Morgan, Amazon, Apple and the Bank of America, is to break away from the capitalist model: “Each of our stakeholders is essential. We commit to deliver value to all of them, for the future success of our companies, our communities and our country.”
However, just a few months later a pandemic erupted that has tested the mettle of large corporations — not just the signatories to the document, but others that are also committed to the environment, society and good governance (ESG). This is the backdrop against which the advisory services firm, KKS Advisors, has just published the results of a test it conducted among companies comprising the S&P 500 and FTSEuroFirst indices. With monitoring support from Truvalue Labs, the firm used various publications, news releases and other sources to determine the extent to which companies were operating in accordance with the Sustainability Accounting Standards Board, a non-profit organization that promotes corporate standards on social and environmental issues. It also examined how companies acted on a series of indicators relating to the pandemic, such as workplace safety and inequality, during the months of June and July.
Using this data, it produced a ranking with four quartiles. The first quartile is made up of companies that received the highest score based on these indicators – nearly 150 companies in total, including MAPFRE. “Overall, the way that companies respond when put to the test in times of crisis is highly informative of their priorities and the authenticity of their purpose beyond profits,” explain the report’s authors, Bronagh Ward and Vittoria Bufalari. “Based on our findings, we urge companies to focus on translating their purpose commitments into action. Short of authenticity, companies risk adopting a corporate strategy that lacks focus and generates reputational issues,” they add.
In the ranking, the speed at which businesses responded to the crisis carries a high weighting. MAPFRE launched a coordinated action based on several objectives and made a single commitment covering all countries. Firstly, it chose to protect people — including employees, collaborators and clients — and their health. The company triggered its business continuity plan in all countries and units, enabling approximately 90 percent of employees to work from home, protecting their health and the health of intermediaries and clients. At the same time, essential services were maintained for policyholders via the company’s extensive provider network. Secondly, the Group committed to protecting its business: it assessed the risks arising from the crisis, safeguarding the balance sheet and preserving its capital and liquidity. A total of 115 million euros was allocated to support the SMEs and independent business owners in Spain. Finally, it maintained its firm corporate commitment to helping society. Together with the social welfare projects conducted by Fundación MAPFRE, more than 200 million euros was mobilized in the form of donations, grants and additional funding. Details of all of the measures taken by the Group since the start of the crisis can be found here: https://www.mapfre.com/en/covid-19/
When it comes to sustainability, MAPFRE has been firmly committed to people and the planet for more than 80 years, helping to construct the business fabric of the countries where it operates. In fact, the group included the concept of sustainability in its statutes on June 10, 1965, in what it called Corporate Social Responsibility and today is ESG. MAPFRE’s Chairman and CEO, Antonio Huertas, recently demonstrated his support for the United Nations and inclusive multilateralism by signing an ambitious Statement for renewed global cooperation, a milestone that coincides with the 75th anniversary of the UN and through which he commits to demonstrating ethical leadership, implementing inclusive strategies based on the values of the 2030 Agenda and working in partnership with governments, businesses and civil society in order to contribute to a more inclusive, equitable and sustainable world.
MAPFRE has also turned its attention to socially responsible investment. In 2017, it signed up to the United Nations Principles for Responsible Investment (PRI). For more than three years now, the company has been designing new products for its clients—mutual funds in particular, through its asset management arm, MAPFRE AM—that satisfy these principles and comply with ESG criteria. One of the most recent examples, and related to the implementation of measures to combat COVID-19, is a 50-million-euro fund created at the end of April in conjunction with the Community of Madrid to provide health care assistance. In addition, the Group’s asset manager launched the MAPFRE AM Inclusion Fund at the end of last year, which invests in companies that promote the inclusion of people with disabilities.
Click here to view the full report.