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Spain is ready for SRI disclosure regulation

April 2003

Spain is likely to become the latest country to introduce a regulation requiring investment funds to declare their position on socially responsible investment.

Members of Spain’s upper legislative chamber, the Senate, have unanimously approved a motion calling on a government commission to draw up proposals for an SRI disclosure regulation that would require investment and pension funds to state publicly whether they apply social, ethical and environmental criteria when choosing their investments.

The commission, established late last year to look at how Spanish businesses can be encouraged to improve their ethical performance, is not due to report for several months.

But the motion received unopposed cross-party support, making it highly likely that the commission will now recommend such a regulation and that the ruling political party, the Partido Popular, will accept it.

The Senate motion, which called on the commission to support ‘appropriate measures to introduce transparency requirements so that pension and mutual fund managers must disclose whether or not ethical or corporate social responsibility criteria are being taken into account when selecting stock’, was introduced by the minority Convergencia i Unio party, one of the government’s current allies, in consultation with PP officials.

Although any regulation would have to be approved by Spain’s first chamber, the Congress of Deputies, its supporters are optimistic it could be in place within the next 12 months.

‘I would say it’s really a matter of whether it comes in before the next general election, which is in 18 months’ time, or after,’ said Ramon Garcia, director of academic services at the leading Spanish business school Escuela Superior de Administracion y Direccion de Empresas (Esade), which has been gathering support for the measure.

Supporters say the measure will boost SRI in Spain, where the concept has failed to make significant inroads in the investment community.

‘Awareness of socially responsible investment is fairly rudimentary in Spain, and this will help us catch up with other European countries,’ said Garcia.

According to figures compiled by Esade, there were 15 specialist socially responsible investment funds in Spain in 2001, the same number as the previous year.

The most up-to-date estimates from the Sustainable Investment Research International group, a coalition of 11 national SRI research bodies, suggest there was €63million ($67m, £42m) under SRI management in Spain at December 2001, compared with €4.8billion in the UK.

Josep Maria Lozana, director of Esade’s Institute for the Individual, Corporations and Society, which aims to foster social responsibility in Spanish companies, said the disclosure law would address ‘stagnation’ in the country’s SRI market.

IESE Business School in Barcelona has included corporate social responsibility as one of the 13 management topics in its online research area, which includes articles and research findings.




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