3. MAPFRE AND SOCIAL

RESPONSIBILITY

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3. MAPFRE AND SOCIAL RESPONSIBILITY

OBJECTIVES

MAPFRE has stated its commitment to social responsibility through the following nine objectives:

° Diffusion of and compliance with national and international laws and standards and the obligations deriving from them, particularly the Universal Declaration of Human Rights and

the 10 principles set out in the Global Compact.

° Respect for equal opportunities for employees; the right to privacy and free expression; fairness in labour relations; the fostering of a safe and healthy work environment, in addi-

tion to necessary and adequate training; fair compensation and job security; the avoidance

of any type of persecution or abuse, or discrimination based on ideology, beliefs, gender,

race or condition; and the facilitation of balancing work with family.

° Promotion of a growing sense of solidarity, responsibility and social participation among employees, collaboration in the programs carried out or developed to such effect, support

of MAPFRE’s social efforts and promotion of volunteer initiatives.

° Providing policyholders and customers with quality service during the stipulated period and with honest advice, confidential treatment of information and making complaint resolutions

procedures available that involve the shortest delay.

° Socially responsible management of relationships with suppliers and contractors based on freedom, reciprocal respect and mutual benefit.

° Environmentally conscious policy-making which promotes effective measures to limit, as far as possible, the ecological and environmental impact of corporate conduct.

° Communications policy with all interested groups based on transparency, truthfulness and compromise, in particular with shareholders and investors.

° Maintenance of a continuous working relationship with government agencies based on transparency and honesty.

° Respect for the principles of freedom and fairness in market competition.

MAPFRE’S MODEL FOR SOCIAL RESPONSIBILITY

MAPFRE believes there is no pre-established model for Social Responsibility and that each

company must create its own. To this end, the institutional principle of social responsibility

reflected in the Code of Good Governance sets out three guidelines that have determined the

model followed by MAPFRE:

° Compliance with current laws and the international commitments that have been under-taken (United Nations Global Compact and UNEP Protocol).

° Service to society, adding to its progress and acting with a supportive spirit.

Special Education School nº 20, Rio Negro Province, Argentina, where we finance

the equipment for a wood workshop for young people with special educational needs.

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ANNUAL REPORT 2005 REPORT ON SOCIAL RESPONSIBILITY • MAPFRE and social responsibility

° Integral management of social responsibility by those involved in decision-making at MAP-FRE at any level.

With these guidelines in mind, the MAPFRE model is based on three pillars: good governance

of the Group, social responsibility -understood as maintaining a relationship of fairness with

its stakeholders-, and social action, as part of the activity that MAPFRE carries out through

its private foundations.

° Strict compliance with legal obligations.

° Transparency in management and information.

° Business ethics.

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° Relationship of fairness with stakeholders.

° Environment.° Adherence to Global

Compact and the UNEP protocol.

° Social responsibility report in line with GRI criteria.

° Business resources dedicated to helping underprivileged groups in countries where MAPFRE is present.

° Creation of the Institute of Social Action at the FUNDACION MAPFRE.

° Encouraging volunteer work.

In late 2004 MAPFRE created the Social Responsibility Area within the Corporate Department

of Communications and Social Responsibility with the goal of going further in the planning,

coordination and monitoring of socially responsible conduct by SISTEMA MAPFRE’s entities

around the world. Throughout 2005 this unit worked to conceive and design a commmon policy

of social responsibility for all the entities of the Group, taking into consideration the previous

model.

Following the structure of the model described above, the activities carried out in 2005 were

the following:

GOOD GOVERNANCE

In 2005 the Board of Directors of MAPFRE MUTUALIDAD approved a new document that updates

and modifies in significant ways the Code that has overseen MAPFRE’s corporate governance

since March 2000, with the following objectives:

a) Adapt the text to reflect legislative changes in corporate governance.

b) Adapt the content in chapter I of the Code (SISTEMA MAPFRE) to the current reality of the

Group.

c) Revise thoroughly the structure and areas of competence of the bodies of governance of

SISTEMA MAPFRE and its different entities to enhance the coordination of their conduct and

simplify and streamline decision-making processes.

d) Review and correct those areas in which the Code’s norms were ambiguous or difficult to

apply, or had room for improvement.Doctors from MAPFRE ARGENTINA in El Chaco

18

e) Update the Code’s annexes, eliminating those which are obsolete and incorporating new ones

(such as the Internal Rule on Conduct regarding Listed Shares).

SOCIAL RESPONSIBILITY

Fairness in relations with stakeholders is the foundation of social responsibility. For this reason,

in 2005 MAPFRE’s stakeholders were defined, setting out two levels depending on how closely

they are linked to our organisation.

° Level 1: includes all those who are linked to MAPFRE through a direct contractual relationship, as well as

partners, shareholders and investors. These are the

first ones affected by the organisation’s strategic

decisions.

° Level 2: covers those interest groups not linked to MAPFRE through a contractual relationship and not

affected directly by strategic decision, or affected to a

limited extent.

° In 2005 MAPFRE’S environmental policy was approved. It seeks to limit as much as possible the ecological and

environmental impact of the risks stemming from its

business conduct and improve the environment with

positive action.

° By signing on to the Global Compact in 2004, MAPFRE committed itself to spreading its 10 principles. In

2005 a campaign was waged through the usual

internal communications channels to make MAPFRE

employees and contractors in Spain more aware of

the Global Compact.

Carried out in November and December of 2005, the

campaign consisted of weekly publication of each of the

ten principles of the Compact, with thorough commen-

tary and an introductory article on MAPFRE’s adher-

ence to the Global Compact. While it was under way, the

campaign occupied 20 percent of the communications

space on MAPFRE’s internal portal. In 2006 the initia-

tive will be extended to the rest of the countries where

the Group is present.

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TEN PRINCIPLE

HUMAN RIGHTS

1. Businesses should support and respect internationally proclaimed human rights within their sphere of influence.

2. Avoid complicity in human rights violations.

LABOUR RIGHTS

3. Uphold freedom of association and the effective recognition of the right to collective bargaining.

4. Uphold the elimination of all forms of forced and compulsory labour.

5. Uphold effective elimination of child labour.

6. Uphold elimination of discrimination with respect to employment and occupation.

ENVIRONMENT

7. Support a precautionary approach to environmental challenges.

8. Undertake initiatives to promote greater environmental responsibility.

9. Encourage development and diffusion of environmentally friendly technologies.

CORRUPTION

10. Work against all forms of corruption, including extortion and bribery.

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ANNUAL REPORT 2005 REPORT ON SOCIAL RESPONSIBILITY • MAPFRE and social responsibility

SOCIAL ACTION

For more than 20 years MAPFRE has earmarked part of its annual net profit to financing non-

profit activities that are of general interest to Society through its six private foundations.

In 2005 these foundations spent a total of 23.1 million euros on their activities. In line with the

proposals that will be submitted to the adecuate assemblies or general meetings, the various

entities of SISTEMA MAPFRE will donate a total of 25.4 million euros to these foundations in

2006, chargeable to 2005 profits.

Furthermore, it is worth pointing out that in 2005 a restructuring plan was approved for MAP-

FRE’s foundation activities, meeting one of the goals set out in Strategic Plan1. This plan merged

all the foundations of a national scope that were promoted by SISTEMA MAPFRE into the FUN-

DACIÓN MAPFRE, which will carry out its activities through five specialised institutes: Preven-

tion, Health and Environment; Road Safety; Insurance Sciences, Culture and Social Action.

With the creation of the Institute of Social Action, SISTEMA MAPFRE aims to boost its contribu-

tion to society’s development and progress, contributing business resources for direct or indi-

rect improvement of the living standards of the most highly underprivileged people and groups

in the countries where MAPFRE is active. This institute’s activities will center mainly on promot-

ing social integration projects for handicapped people in Spain and children in Latin America.

In both places the institute hopes to take on a leadership role. It will also encourage volunteer

work as a way for MAPFRE employees and contractors to participate in solidarity-minded social

action projects.

Furthermore, as member of the Business and Society Foundation, MAPFRE takes on the

responsibility of reporting adequately on its activity in this area and supporting the institutional

activities of the Foundation to promote social action in the business sector.

Finally, as a complement to this foundation activity, MAPFRE has made donations to social,

cultural and sports projects amounting to 2,843,446.2 euros.

1 Detailed information on this is available in the Annual Report for 2005 on MAPFRE’s foundation activity.