Environmental, Social and Governance (ESG) practices are increasingly important areas of focus for each of us and the broader communities of which we are a part, both local and global. As important topics from a societal perspective, ESG progress is an area where the institutional marketplace has demonstrated clear leadership.
Starting in Europe and spreading to other continents, institutional investors and organizations have communicated the expectation that their business partners have a clearly-articulated position on ESG goals and a demonstrated path for achieving progress toward positive outcomes. This collective dialogue has served to help create awareness and momentum for businesses to deliver improvements in all legs of the ESG arena.
To illustrate this effect, per a 2021 Natixis report, 57 percent of institutional investors are focusing on ESG concepts that align their assets to organizational values.1
Similarly, cross-organizational pronouncements like the PARIS Climate Accords and the United Nations Principles for Responsible Investing convey the rallying call around positive changes in business impacts on the environment.2
The concepts around ESG align with a similar term often used in parallel - sustainability. Sustainability implies the ability to exist and thrive across long periods of time to deliver on your mission while contributing to societies and the environment. As we are taught in our youth, focus on leaving the world a better place than when you entered it. Sustainability implies a noble purpose.
MassMutual, as a mutual company, operates under this same intent. The mutual form of structure is about collectively working together to help individuals and organizations meet their long-term financial needs. Sustainability and mutuality have a common focus on improving the lives of people for the long-term. At MassMutual, it’s in our DNA.
Whether to meet our obligations to policyowners for an insurance claim, or to help investors meet long-term investment or risk management needs, often the timeframe extends decades into the future. Hence, we need to think long-term to serve our customers, while at the same time looking to benefit the societies in which we live.
For these reasons, I feel sustainability and mutuality are intuitively linked together. I encourage everyone to view some of MassMutual’s ESG commitments (including the recent net zero carbon emission goals) at MassMutual.com. As a mutual company, we are focused on the long-term financial health of customers and the long-term sustainability of the world in which we live.
Keith McDonagh is Head of the Institutional Solutions businesses for Massachusetts Mutual Life Insurance Co. (MassMutual), which includes Institutional Insurance (BOLI/COLI), Pension Risk Transfer, MassMutual Investments, Stable Value, Funding Agreement Backed Notes, and Guaranteed Interest Contracts.
1Institutional Investors Report That ESG Will Be a Future Focus
2 Major Companies Urge White House to Stay in Paris Agreement