Socially responsible investment (SRI) is advancing in Spain, ‘ma non troppo’


In Spain, Socially Responsible Investment (SRI) (which focuses on criteria such as environmental sustainability, social justice or corporate governance) now stands at 170 billion euros, about 40% of total collective investment – investment and pension funds. Compared with the rest of Europe, the country is faring well in terms of progress in this area, but there are not many funds with 100% SRI, nor is the demand for this consolidating.

“SRI is growing in Spain, but it has long way to go compared with France – the leader in Europe – or the UK, which has been selling this kind of product for 25 years,” says  Adrián García, head of Analysis and Research at Spainsif. This is a Spanish association which is on a mission to boost the application of environmental, social and good corporate governance criteria in investment in our country. According to data provided by Spainsif, SRI assets under management have gone from zero to 169.359 billion euros in Spain in the last 15 years.

The reality is more mundane taking into account that an SRI fund only needs to account for one of the multiple principles included in this investor focus: the protection of human life, the respect for human rights, defending the peace, health protection and promotion, corporate social responsability and looking after the environment.

In practice, “almost all banks’ fund management companies have what they called negative ‘exclusion filters’ or those based on international regulations. That means they don’t invest in companies which are involved in the arms industry, or those connected with gambling or alcohol, to give some general examples,” says the Spainsif spokesman.

Robeco highlights one reason why these SRI investment figures need to be interpreted with caution. This Dutch fund manager claims that “the majority” of investment funds distributed in Spain – with assets under management totalling 5.4 billion euros – apply SRI criteria to the stocks chosen for portfolios. But investment vehicles which are 100% SRI focused only account for 90 million euros. Robeco has been working in this area since 1990 via RobecoSAM, and investment specialist firm, and it created the Dow Jones Sustainability Index. Over 3,000 companies across the globe participate in the index’s sustainability questionnaire.

Morningstar, the distributor of financial services and products, which has just acquired 40% of Sustainalytics – the leading global provider of environmental, social and governance (ESG) analysis and produces indices and ratings on sustainability – has found that only 2% of total assets under management in the world is invested completely respecting SRI criteria.

The drive for SRI investment across the world is due to the fact that investors are more sensitive to environmental, social and governance problems. “Private investors are jumping on the sustainability bandwagon as they are increasingly more demanding in this sense. In fact, if we look at the assets which are managed with these policies in mind, we have to say that the trend is very encouraging. Now 22% of all these assets comes from private clients, when just four years ago it was less than 4%. All this shows that there are some radical changes taking place in portfolio management. Sustainability is starting to become essential for many investors,” says Robeco.

And this apparently holds a special attraction for Spain: “The conclusion drawn from a variety of studies is that Spaniards value enviromental, social and corporate governance factors more than investors in the majority of our neighbouring countries. This concern heightened during the financial crisis of the last few years,” according to a report by financial firm Tressis.

Another reason for this increase is the emergence of academic studies which pull apart the classic thesis that investment based on SRI criteria offers a lower return than that based on just financial criteria. Taking data from July and analysing the three previous years, Lipper Global has shown that European SRI equity funds have obtained a return of 7.18% with volatility of 16.9% over the period. Meanwhile, all the funds in this category have obtained a return of 6.24%, with volatility of 17.8%.

In Spain’s case, companies’ increasing concern about how they manage employees’ pension plans has contributed to this rise in responsible investment. Many steering committees – the organisations which manage these pension plans – have systematically established that SRI criteria must be considered in any investment decision.



About the Author

Fernando Rodríguez
Fernando Rodriguez is in charge of PR and Development at The Corner. He has worked for over 30 years for financial publications like Expansion, El Economista, Dossier Empresarial, Ciudadano and Afa Press-Worldfolio and has been a contributor to El Pais-Negocios, Emprendedores, Época, Sector Ejecutivo and Consejeros. Fernando holds a degree in Journalism from CEU-San Pablo (Complutense University) and a master’s degree in Strategic Communication from CESMA business school. As a communication consultant, he has developed PR projects for firms like Grupo Bancaja, JP Morgan, GBS, Corpfin, QBE, Howden, Asociación Española de Leasing y Renting (AELR) or Asociación Española de Accionistas Minoritarios de Empresas Cotizadas (AEMEC).