The Social Responsability Model of Spain, from divergence to complicity. by LN Creatividad y Tecnología

ÂŠ Ministry of Employment and Social Security December 2015 Title The Spanish model of Social Responsibility. From divergence to complicity. Project management and content Ministry of Employment and Social Security in collaboration with the Office of the High Commissioner for the Spain Brand. The report has been supported by the research team ForĂŠtica DESIGN: Luisannet Art and Technology

01 EXECUTIVE SUMMARY INTRODUCTION

1.1 THE SOCIAL RESPONSIBILITY MODEL OF SPAIN

FROM DIVERGENCE TO COMPLICITY 1.2 THE STRUCTURE OF THE SOCIAL RESPONSIBILITY MODEL OF SPAIN

1.3 INSTITUTIONS AS THE DRIVING FORCE BEHIND SOCIAL RESPONSIBILITY

1.4 AWARE CITIZENS, GREATER EXPECTATIONS

1.5 COMPANIES, A DRIVING FORCE BEHIND TRANSFORMATION

1.6 THE THREE DIMENSIONS OF THE SOCIAL RESPONSIBILITY MODEL OF SPAIN

1.7 CONCLUSIONS. PRESENT AND FUTURE OF THE SOCIAL RESPONSIBILITY MODEL OF SPAIN

02 APPENDIXES: THE SOCIAL RESPONSIBILITY IN EUROPE 2.1 A GLANCE AT SOCIAL RESPONSIBILITY IN EUROPE

2.2 THE THREE DIMENSIONS

2.2 THE THREE DIMENSIONS 2.2.1 ENVIRONMENT 2.2.1.1 NATURAL CAPITAL FOREST MANAGEMENT PROTECTION OF NATURAL AREAS BIODIVERSITY FROM THE PUBLIC SECTOR OPTIMISATION OF WATER 2.2.1.2 CLIMATE AND ENERGY MODEL RESPONSE TO THE CLIMATE CHALLENGE RENEWABLE SOURCES ENERGY EFFICIENCY 2.2.1.3 SUSTANAIBLE PRODUCTION MODELS AGRICULTURE TOURISM MOBILITY

41 41 42 44 45 47 47 49 51 53 53 54 56

2.2 THE THREE DIMENSIONS 2.2.2 SOCIAL 2.2.2.1 QUALITY OF LIFE UNIVERSAL HEALTH INCLUSIVE WELFARE 2.2.2.2 CITIZEN EXPECTATIONS SOLIDARITY CITIZENS & SOCIAL RESPONSIBILITY DEVELOPMENT COOPERATION 2.2.2.3 GENERATING OPPORTUNITIES TRAINING IN SPECIAL SKILLS DISABILITY AND SOLIDARITY YOUTH ENTREPRENEURSHIP AND EMPLOYMENT FROM SOCIAL RESPONSIBILITY TO USR SOCIAL ECONOMY

60 60 61 62 62 63 67 69 69 71 72 75 75

2.2 THE THREE DIMENSIONS 2.2.3 GOVERNANCE 2.2.3.1 PROMOTION AND SIMULATION OF SOCIAL RESPONSIBILITY

CSR STRATEGY SOCIAL RESPONSIBILITY FROM THE TERTIARY SECTOR COMMUNICATING SOCIAL RESPONSIBILITY SUSTAINABLE ECONOMY ACT SUSTAINABILITY OF PUBLIC PROCUREMENT

80 84 84 85 86

2.2.3.2 INTEGRITY AND FIGHT AGAINST CORRUPTION

TRANSPARENCY GOVERNANCE CORPORATE CRIMINAL RESPONSIBILITY

88 89 91

2.2.3.3 BUSINESS LEADERSHIP

01.

EXECUTIVE SUMMARY

INTRODUCTION Social Responsibility in Spain. From divergence to complicity Over recent years, Social Responsibility and socio-environmental sustainability have been areas of prime interest to social players, business people and politicians in both Spain and worldwide. The success and extensive development of Social Responsibility in Spain is the result of a re-alignment of interests among the main players forming our economic framework, enabling a balance between competitiveness and growth and social welfare and the preservation of our natural heritage. Over the past century, it has been repeatedly seen that a significant divergence between the interests of public and private socio-economic players leads to imbalances and high costs in economic, social and environmental terms. This leads to important reactions in public opinion, the tertiary sector, activist organisations and the media, which often results in a greater boost in regulations and an increase in inspections of the economic activity by the public authorities. This, in short, generates a vicious circle in which the players adopt defensive stances and the pressure ends up making the economic framework less flexible. Social Responsibility, however, arose as a formula to overcome these imbalances through which organisations seek to maximise their contributions to society and minimise the negative impacts related to their activity, re-aligning interests to improve business conditions and the welfare of society and to increase environmental protection standards. Within this process, all of the players forming society find greater value in collaboration than in confrontation. Social responsibility, the option of Spanish society Spain is a country with a long history, yet with a young, dynamic democracy. Over the past 35 years, it has served as an example of inclusive prosperity that proves how sustainable and socially responsible development is compatible with and even improves a strong economic drive. Its economy has been capable of multiplying per capita income by five, while its society has been able to attract and welcome 10% of the foreign population and the Authorities have increased protection standards for its citizens, the environment, workers and the more vulnerable groups. This cohesion is only possible thanks to a high degree of commitment and sensitisation by Spanish society, which has been able to seek international references and adapt them to its own idiosyncrasy. Social Responsibility is a common ground that connects a competitive socio-economic model and even democratic and supportive values with responsibility regarding the environmental heritage. Authorities, Citizens and Companies join hands to build a Social Responsibility Model of Spain.

INTRODUCTION Accepting the challenge: Being sustainable means being competitive Eleven Spanish companies among the 187 world leaders in the fight against climate change

The growing inequality in terms of wealth -both worldwide and nationwide-, or the accelerated ageing of the population -especially in advanced economies- generate greater pressure on the tax situation of the States. Lastly, climate change -nowadays a proven and accepted phenomenon with the utmost scientific consensusâ&#x20AC;&#x201C; is a continual source of shocks that will increase in both frequency and intensity and that will not only affect the natural environment but will also have serious consequences on society and its quality of life, and will affect the production potential of countries and their industries.

The challenges of inclusive and environment-friendly economic development have never been more evident than over recent years. The strong increase in demand, as a result of the emerging economic convergence, and the continuous growth of the population require more efficient and sustainable models for resources.

These elements are a clear challenge to the Welfare State, one of the major conquests of the 20th Century and that requires social innovation, the capacity to adapt and a sense of shared responsibility by the players and decision-makers in a country to ensure a harmonic and inclusive economic development is compatible in an increasingly dynamic and uncertain environment. First and foremost, sustainability and Social Responsibility are and will remain a choice involving the expectations of people and of the impact on the planet, as well as a prime source of competitive advantage. Spain is in the top quartile in terms of sustainability according to the World Economic Forum

Taking responsibility in the change In Spain, companies, governments and public opinion have raised the thresholds of demand in terms of environmental protection and citizen welfare, taking and assuming increasing responsibility regarding the impact of their activities from an environmental and social viewpoint. This has allowed for an inherent model of social responsibility to flourish that has become a worldwide reference.â&#x20AC;&#x192;

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INTRODUCTION The Social Responsibility Model of Spain: three players, three dimensions Over the past fifteen years, Spain has been able to structure a unique, specific model of social responsibility that sets the basis for the promotion and development of a wide range of initiatives that make the country a benchmark. The combination of an institutional framework -which aspires to meet the highest standards of sustainability-, a participative and plural civil society and a business base that operates under the conviction that sustainability boosts competitiveness, could set the foundations for a sustainable present and future in Spain. The Spanish Model of social responsibility lies on three main players- Institutions, Society and Companies which work transversally on three dimensions â&#x20AC;&#x201C; environment (E), society (S) and government(G).

CITIZENS

SPANISH MODEL 3 actors 3 dimensions

Three Players, catalysing social responsibility MP

A NIE S

IN S TI T U TI

Spain has been the world leader in organ donations and transplants for the past twenty three years

Institutions: The Authorities1, at national, regional and local level, have played a central role in promoting Social Responsibility throughout the social and business network. Society: Spanish society is extremely sensitive towards social responsibility and includes, as some reports show, up to twelve million potentially responsible consumers. Citizens are proven to have greater awareness than average in aspects regarding climate change and other social factors and adapt their expectations in terms of institutions and companies. Companies: Spanish companies have taken on board their basic role as an engine of growth and welfare for society. The production network has increasingly incorporated Social Responsibility into its operations and considers sustainability to be a source of competitive advantage. Spanish companies lead the way in areas of sustainability, heading several sectors worldwide.

Organic development: CERSE, LES, National Strategies (Social Responsibility, disability, sustainable mobility, green growth), regional and local participation in Enterprise 2020, cities climate leadership group.

AUTHORITIES

REGULATORY MIX

COMPANY

DIFFUSION

Basic social legislation

National SR Strategy

CERSE

Environmental regulations

Spanish Corporate Governance Code

Challenges Network, Cities Climate Leadership Group

Occupational risk prevention

Green Growth Strategy

Extremadura SR Observatory (ORSE)

Criminal responsibility of companies

Subsidies for the Promotion of Social Responsibility

Enterprise 2020

Pension plan and fund regulation

CITIZENS

PROMOTION

CONSCIOUS CITIZEN

THE VALUE OF SOLIDARITY

SR task force within the Employment and Labour Affairs Sector Conference for the coordination of Public Authorities and Autonomous Communities

TOWARDS RESPONSIBLE

Great empowerment thanks to information technologies

High sensitisation regarding the needs of society

There are 12 million citizens sensitive to social and environmental responsibility

Growing importance of citizens regarding social and environmental aspects

Structured and participative civil society with a strong increase in volunteering

Increase in expectations regarding companies and institutions

High commitment in the support for groups with specific needs, such as disability, equality and the donor community

One of every two consumers develops social responsibility practices in consumption

IMPLEMENTATION OF POLICIES AND TOOLS 9 out of every ten large companies have social responsibility development programmes 1 out of every two companies as a SR management system 1 out of every two companies certified in its SR management is an SME

TRANSPARENCY AND REPORTING Spain is the leader in the number of companies to have joined the United Nations Global Compact

INTERNATIONAL REPUTATION The Spanish stock exchange is the 8th most sustainable in the world thanks to its listed companies

81% of all large Spanish companies produce annual social responsibility reports

The average sustainable score of Spainish companies exceeds the world and European average

Spain is the 4th country in the world in the production of G4 sustainability reports

73% of Spanish companies stand out in the Dow Jones Sustainability Index

INTRODUCTION

IR NV

ONME

N T

Three dimensions, maximising the impact of Social Responsibility

E Public Authorities and other public institutions produce sustainability reports and have included CSR in their training

The Spanish model works on three basic mainstays: Natural Capital, Climate and Energy Model and Sustainable Production Models.

C IE T Y

Citizens are the beginning and the end of Social Responsibility. Building a fair, supportive and inclusive society that calls for a sense of responsibility regarding impacts related to consumption and wellbeing is one of the main objectives of the Spanish model of social responsibility.

It therefore works in three main areas: Responsible Citizens, Quality of Life and Generation of Opportunity.

VE O

RNA N C

The natural environment is the basic asset for building a society and a production network. Therefore, environmental sustainability is vital for economic sustainability.

The most competitive countries are those with stronger governance models. Social Responsibility and governance are elements that are intrinsically united. Therefore, the Spanish model of Social Responsibility seeks to strengthen a framework of governance based on social responsibility, integrity and company leadership.

THE THREE DIMENSIONS

NATURAL CAPITAL

Forest Management

Protected areas

Water optimization

Protection of natural resources, as the main environmental responsibility of the country.

CLIMATE AND ENERGY MODEL

Response to the climate challenge

Citizens & RS

Development cooperation

Citizens constitute the beginning and end of SR. Promoting a supportive culture, integration of SR in consumer decisions and development cooperation are the mainstays of the model.

PROMOTION AND STIMULATION OF SR SR Strategy

Sustainable Economy Act

Sustainability in public procurement

Leadership, coordination and deployment of resources to promote SR are essential in reaching a structure SR model nationwide.

Energy efficiency

Spain makes significant efforts to mitigate climate change. Transformation of the energy model and improving consumption efficiency are critical for success.

RESPONSIBLE CITIZENS

Solidarity

Renewable sources

QUALITY OF LIFE Universal health and social assitance

Inclusive welfare

Social production through health improvement and accessibility tools and the search for an inclusive welfare framework direct public action.

INTEGRITY AND FIGHT AGAINST CORRUPTION

Transparency Act

Governance

Corporate criminal responsibility

Reinforce transparency, governance and the fight against corruption are essential in strengthening the trust of our institutions and companies.

SUSTAINABLE PRODUCTION MODELS

Agriculture

Tourism

Mobility

Development of sustainability policies in the main sectors of our economy with high sensitivity to the scarcity and quality of our natural resources.

GENERATING OPPORTUNITIES

Training in special skills

Entrepreneurship and social economy

Youth employment

The promotion of regulations and specific actions to promote equal opportunities is an essential value. Disability and youth are the main focus. Promoting the social economy favours self-employment and the generating of alternative formulas for work organisation and production.

BUSINESS LEADERSHIP

Policies and management tools

Reporting and accounting

International reputation

Having exemplary and innovative companies in terms of SR generates a virtuous and progressive cycle for a socially responsible production network.

INTRODUCTION Post-2015 agenda. The best is yet to come The National CSR Council was the first CSR management body worldwide.

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Thirteen years of direct investment in promoting CSR throughout Spain by the Authorities

The international community has acknowledged the great efforts being made by Spain in terms of social responsibility and sustainable development. Even more importantly, the multilateral bodies are adopting agreements that underline the basic attributes of the Spanish model. Hence, the Sustainable Development Goals recently assumed by the General Assembly of the United Nations create the need for closer cooperation among governments, society and companies in order to promote and strengthen a sustainable development model on a worldwide scale. The World Climate Summit in Paris in December 2015 also generated significant agreements that may only be reached through joint responsibility between public and private players. In this sense, Spain is faced with a great opportunity. To showcase a model that has proven to be effective when promoting social responsibility nationally and that could strengthen Spainâ&#x20AC;&#x2122;s position as a top player in change in the promoting of a fairer, more sustainable and more competitive world.

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1.1 THE SOCIAL RESPONSIBILITY MODEL OF SPAIN. FROM DIVERGENCE TO COMPLICITY

EXECUTIVE SUMMARY

Social Responsibility, Spanish society’s choice

30.000

7.000.000

25.000

6.000.000 5.000.000

20.000

4.000.000

15.000

3.000.000

10.000

2.000.000

5.000

1.000.000

FOREIGN POPULATION IN SPAIN

2014

2012

2010

2008

2006

2002

2004

2000

1998

1996

1994

1992

1990

1988

1986

1984

1982

1980

Income per capita

YEARS NO DATA AVAILABLE

Since the arrival of democracy in Spain:

Foreign population in Spain

Income per capita in €

Shared Prosperity

Social responsibility is “Spanish society’s choice”. It is the aspiration shared by the main players forming society: citizens, the Authorities and companies. Spain is a young, dynamic democracy that has experienced a significant transformation over the last thirty years, placing a high level of socio-economic development alongside an open, integrating and socially and environmentally concerned society.

Prosperity and shared value Over the past 35 years, Spain has experienced a boom in economic prosperity in support of the progress of society. Per capita income has been multiplied fivefold, life expectancy at birth has increased by seven years, investment in education has almost doubled as a percentage of GDP and its CO2 emissions per product unit have decreased by 45%. Furthermore in this process, Spain has been able to house a significant migratory flow. The ratio of foreign population in comparison with national citizens has increased from 0.5 to 10 foreigners for every one hundred Spaniards, increasing the density of the foreign population twenty-fold. This integration has been harmonised and accommodating.

Life expectancy at birth has increased by 7 years Investment in education has almost doubled as a percentage of GDP

Spain is the fifteenth country in the world that disburses most in terms of official development assistance

45% reduction in its CO2 emissions per unit of GDP Housing of a signif icant migratory flow foreign population density 20 times higher

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EXECUTIVE SUMMARY

1.1 THE SOCIAL RESPONSIBILITY MODEL OF SPAIN. FROM DIVERGENCE TO COMPLICITY

Values of Spain, European values Spain has been able to combine the values and objectives of its European roots with its specific idiosyncrasy. The aspiration to obtain a model of competitive society with high social and environmental standards is reflected by structural and regulatory development and the promotion of inclusive growth policies. This has formed the ideal breeding ground for the development of a business network at the forefront in terms of sustainability.

Supportive and socially responsible citizens Solidarity is one of the distinctive features of Spanish society that is shown in a wide variety of aspects. Up to 10% of the population takes part in volunteer activities through over 15,000 solidarity organisations. An example of great sensibility is the fact that Spain is the world leader in organ donors. From a community involvement perspective, there is an association for every 1,000 citizens in Spain, through which citizens promote values that encourage coexistence and seek the welfare of society. This strong structuring of Spanish society shines through whenever a shock tests the convictions of its citizens in terms of democratic, social and environmental values, such as terrorism or environmental accidents.

A great environmental heritage Spain is the country with most biodiversity in Europe and one of the hotspots in terms of the protection of fauna and flora worldwide. The wide variety of climate and orography contribute to a great number of different ecosystems. Furthermore, the great natural heritage is not free of risks that require a significant response, such as the availability of freshwater and the existence of a large number of endangered species.

Along these lines, there has been significant regulatory development in all administrative areas and a wide variety of environmental protection programmes have been established. Likewise, the private sector has played a significant role in integrating environmental protection programmes into its operations. Hence, Spain is the sixth country with most certificate management systems in terms of quality and the environment (ISO 9001 and ISO 14001) and third if weighted by the gross domestic product.

Sustanaible companies and sectors The Spanish economy and its main companies prove to be highly exposed to the opportunities and challenges linked to social responsibility and sustainable development. Tourism, the agriculture and food sector, infrastructures or renewable energy contribute significantly to economic development and to the degree of sophistication of Social Responsibility in Spain.

Impact or employment The Social Responsibility Model of Spain works towards strengthening the sustainability-employment-competitiveness link in order to promote the development of different mechanisms, such as the Youth Entrepreneurship and Employment Strategy that enables the business network to promote the creation of sustainable, quality employment.

Social Responsability, common ground for Spanish society In short, Social Responsibility is a common ground that connects a competitive and inclusive socio-economic model, democratic and supportive values and responsibility towards the environmental heritage. Authorities, Citizens and Companies join hands to build a Spanish Social Responsibility Model.

1.2 THE STRUCTURE OF THE SOCIAL RESPONSIBILITY MODEL OF SPAIN

EXECUTIVE SUMMARY

Social Responsibility is an adapting, dynamic and complex phenomenon, due to the number of players and issues upon which social responsibility is reflected. Thanks to its nature, Social Responsibility requires the participation of a large number of players or stakeholders in a cause and effect relationship. Stakeholders have an impact on their environment and, in turn, are affected by it and by the actions of other stakeholders.

CITIZENS

ENVIRONMENT

SPANISH MODEL 3 actors 3 dimensions

Furthermore, although the acronym ESG (Environment, Society and Governance) suggests a relatively simple framework, each side includes a wide range of elements that makes the number of interactions between stakeholders and issue virtually endless. In response to its complexity, the Social Responsibility Model of Spain offers an adapting framework to provide a balance between the harmonisation of Social Responsibility policies and actions and the capacity of the main players to promote the sustainability agenda.

SOCIETY

Spain is the seventh best country in which to be a mother according to the Save the Children organisation

MPA

NIE S

IN S TI T U TI

GOOD GOVERNANCE

The public pension system has a net replacement rate of 80% of salaries prior to retirement compared with an average 66% for the OECD as a whole

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EXECUTIVE SUMMARY

1.3 INSTITUTIONS AS THE DRIVING FORCE BEHIND SOCIAL RESPONSABILITY

Fifteen years of stimulation The presence of Social Responsibility on the agenda of the Spanish Authorities begins with the new millennium. Over recent years, the successive governments have progressively sought to accommodate Social Responsibility within State activities. In 2002, the first group of experts on social responsibility was created in the former Ministry of Labour. A later parliamentary term in 2005, following a change in government, created the Forum of Social Responsibility Experts attached to that same Ministry. Proposed by the Forum of Social Responsibility Experts (2005) and the Round Table on Social Dialogue (2007), the National Council for Social Responsibility in Business (CERSE) was created in 2008. This body is attached to the Ministry of Employment, the former Ministry of Labour and Immigration, and is of an “advisory and consulting” nature, seeking to stimulate and promote Social Responsibility policies. Once again, the following parliamentary term and new government designed and approved the Transparency Act and the first Spanish CSR Strategy, the main objective for which is to support the development of responsible practices in both public and private organisations. These practices, in turn, stimulate the country’s competitiveness and promote a more productive, sustainable and integrating society and economy. In addition, the Spanish Securities and Exchange Commission (CNMV) presented a new Corporate Governance Code for listed companies in 2015. Alongside this, development of Social Responsibility was stimulated and encouraged at regional and local level not only through the CERSE, in which all authorities are represented, but through their specific policies. Some more noteworthy initiatives include the ORSE (Regional Government of Extremadura Social Responsibility Observatory), which created a Social Responsibility promotion platform in the Autonomous Community that includes tools, information and helplines. Regional strategies have also been generated, such as in the Region of Murcia, and framework programmes such as Cantabria Responsable [Responsible Cantabria]. The initiatives undertaken by the Regional Government of Galicia or the Regional Governments of Castilla y León, Navarra or the Basque Country, among others, were also relevant. Spanish CSR Strategy

Round Table for Social Dialogue on CSR

First group of CSR Experts

Forum of CSR Experts

State CSR Council

Sustainable Economy Act

2002

2005

2008

2011

Good governance code of listed companies

Transparency Act

2014 20

1.3 INSTITUTIONS AS THE DRIVING FORCE BEHIND SOCIAL RESPONSABILITY

EXECUTIVE SUMMARY

The structural role

By extensively promoting Social Responsibility, the Authorities play a structural role in paving the way for and ensuring the development of sustainability, making the country a benchmark in Social Responsibility. The main differential elements are:

12 12

1 5 8

Mix of “soft” y “hard”laws: Spain has a regulatory mix that combines strong connections in social and environmental issues and adequate flexibility for the innovation and stimulation of social responsibility. Incentives for the stimulation of sustainability: lthe Authorities have invested in Social Responsibility stimulation programmes, generating abilities and skills throughout Spain and scientific support for social and environmental programmes. Likewise, different administrative offices have incorporated social responsibility criteria into public procurement, generating an additional incentive to showcase social responsibility. Difussion and impact: the Authorities promote the creation of coordination platforms and public-private Social Responsibility alliances to encourage the exchange of knowledge and the adaptation of programmes in Spain.

The Authorities as a player in Social Responsibility: The Authorities develop transparency and responsible management initiatives to progress in the social responsibility of the public institutions. A good example of this is the 2014 Guardia Civil Social Responsibility Report Impact Map: skills for employment

Source: CSR Europe

1.3 INSTITUTIONS AS THE DRIVING FORCE BEHIND SOCIAL RESPONSABILITY

EXECUTIVE SUMMARY

Enterprise 2020 is a line of action in European Social Responsibility strategy launched by the European Commission in 2011, which encourages the promotion and diffusion of best Social Responsibility practice structured collaboratively and led by companies. As a result of this project, the Business Impact Maps, platform has been launched to show a map of the best practices taking place in Europe over two areas of action: “Skills for Jobs” and “Sustainable Living in cities”. Spain leads the way in the number of initiatives with 22% of the total, 18 in the first line of work and 15 in the second.

12 9

The result of this structural work by the Authorities generates consistency over time that leads to significant participation by both the public and private sector.

2 1

12 3

Over 950 companies have joined the Youth Entrepreneurship and Employment Strategy promoted by the Ministry of Employment and Social Security, agreeing to encourage youngsters into employment

116 companies employing around 182,000 people have joined the equality label of the Ministry of Health, Social Services and Equality

Source: CSR Europe

Impact Map: Sustainable living in cities

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1.4 AWARE CITIZENS, GREATER EXPECTATIONS

EXECUTIVE SUMMARY

Positive discrimination - Would you be willing to buy a responsible product? 61,3%

59,7%

55,1% 51,4%

21,8%

19,1%

20,0%

17,6%

15,5%

14,7%

4,0%

2,9%

2006

2008

4,8%

3,1%

2010

2014

Always, even a bit more expensive Only if they cost the same Buy cheap do not know, no answer

Half of all Spaniards have purchased products because of the responsible behaviour of the company

Citizens now have a wide range of alternative sources through the internet and social network phenomenon, where other uses add contents from anywhere in the world. The development of applications that streamline the integration of information enable citizens to access public and private information, assess other users and the viewpoint of opinion leaders and participate directly in debates on more pressing aspects from a social and environmental viewpoint. A result of this is the significant increase in Social Responsibility attributes in company assessment. According to the 2015 Forética Report on the state of Social Responsibility in Spain --study that regularly analyses the level of proximity between Spanish citizens and social responsibility- the weight of environmental and social attributes when assessing company contribution to society welfare has almost doubled over the past 6 years.

Source: report Forética 2015

The boom in technologies, with the growing ubiquity and convenience of information and citizens who are increasingly aware of social and environmental aspects, creates a new consumer profile: the conscious consumer. This phenomenon is not only limited to Social Responsibility, although it is here where the growing expectations of citizens regarding the role of companies, governments and other institutions in terms of society welfare can clearly be observed. One of the elements underlining this phenomenon is the increasing amount of information on business sustainability from corporate sources, from the media and specialist analysts and from civil society itself.

27,9% 21,1%

The conscious citizen, a new consumer model

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EXECUTIVE SUMMARY

1.4 AWARE CITIZENS, GREATER EXPECTATIONS

Segmentation of Spanish citizens depending on their propensity towards responsible consumption

These changes in the viewpoint of citizens result in greater expectations for social and environmental action by organisations. On a business level, three out of every four citizens, according to said report, believe that social responsibility should be “a total priority” in terms of their management practice. In terms of institutions, similar levels of demand are observed. 76% of citizens believe that the current political situation is bad or very bad, which shows an expectation for improvement over forthcoming years.

32,5

million of the sample

Lastly, an increasing number of citizens identify themselves as a driving force behind change through responsible consumption. In 2014, 49.9% of the population indicated to have purchased a product or brand because they considered it to be more responsible than its competition, despite being more expensive. On the other end of the scale, 44.6% of consumers indicated to have stopped purchasing products, companies or brands because they considered them to be irresponsible or not very ethica.

segmented as the “responsible consumer” profile

have discriminated in terms of responsible consumption Source: report Forética 2015

Social Responsibility as a priority of companies, institutions and citizens

Twelve million citizens sensitive towards Social As a result of the aforementioned aspects, the 2015 Forética Report estimates that there are 12 million citizens in Spain who are sensitive towards Social Responsibility Y, which is equivalent to 36.2% of the adult population in Spain. This figure is a consequence of combining the following three factors: knowing – showing knowledge on Social Responsibility, wanting –showing a favourable attitude towards Social Responsibility, and being able –developing responsible consumer practices.

1.5 COMPANIES, A DRIVING FORCE BEHIND TRANSFORMATION

EXECUTIVE SUMMARY

Signatories of the UN Global Compact

A business base that supports innovation in Social Responsibility

(G8 + China + Spain)

Spain has a receptive company profile that favours social responsibility policies. In terms of both and SMEs, a significant stimulation of Social Responsibility has been observed over recent years, placing Spanish companies at the top in Social Responsibility indexes and charts. The report Social Responsibility and Marca España: Sustainable Companies, Competitive Country promoted by Marca España –an office attached to the Ministry of Foreign Affairs and Cooperation– analyses the contribution of Social Responsibility towards the competitiveness of Spanish companies and performs a diagnosis of their level of maturity on the matter, highlighting the following elements:

2000 1800 1600 1400 1200 1000 800 600 400 200

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Á AD N

Spain is the country with most signatories of the United Nations Global Compact

Spain created the first worldwide SR certification standard in 1999. 6 out of every 10 companies certified in SGE21 are SMEs

Development of policies and management tools. According to the 2011 Forética Report based on over one thousand Spanish companies, which included the corporate part of Social Responsibility evolution in Spain in the analysis, 88.9% of medium and large companies showed a progressive development of Social Responsibility in their organisations. Furthermore, according to this same report, 54% of them showed leadership when developing policies and measuring and reporting systems. A more recent study produced by the Club de Excelencia en Sostenibilidad in 2013 and based on 147 companies (primarily large companies), showed that 52% had a comprehensive Social Responsibility management system. SMEs are increasingly adopting Social Responsibility management systems. As an example 58% of companies certified in SGE 21 – the first certification standard in the world, created in Spain - are small and medium-sized organisations.

1.5 COMPANIES, A DRIVING FORCE BEHIND TRANSFORMATION

EXECUTIVE SUMMARY

Signatories of the Global Compact in Spain 2500

2000

Big enterprises SMEs

1500

Educational institutions 1000

Third Sector Total

500

Spain also leads the way in the preparation of sustainability reports, the main communication tool for stakeholders. According to the Annual KPMG Report on social responsibility reports, the quality of Social Responsibility reports prepared by Spanish companies exceeds the world average by 34% and the European average by 11%.

10 20

09 20

SR Report (selection of countries)

90 80

In turn, the Social Responsibility report is a widespread, mature practice in Spain. According to the database of Global Reporting Initiative -an organisation that promotes the reporting of sustainability matters - 175 Spanish companies published a sustainability report in 2013, compared with 5050 worldwide. If the most up-to-date version of this methodology is used (G4), Spain is the 4th country with most G4 reports in the worldâ&#x20AC;&#x201C;, after the United States, Taiwan and Brazil, with 4.6% of the total. In line with KPMG calculations, 81% of large Spanish companies regularly publish a Social Responsibility report.

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Transparency and reportability. LSpanish companies lead the way in reporting of their efforts in Social Responsibility in several areas. Spain is the leader in the number of companies to have signed the United Nationals Global Compact, an initiative for commitment toward the basic mainstays of the responsible company (human rights, labour rights, environmental protection and the fight against corruption). Furthermore, unlike other initiatives with greater penetration in large companies, the signatories of the Global Compact in Spain are mostly small and mediumsized enterprises, as can be seen in the figure. However, the companies to stand out. for their capitalisation are also aware of the relevance of this initiative, 30 out of 35 companies listed on the Spanish Stock Exchange are also signatories.

Source: KPMG Global Compact and the United Nations.

1.5 COMPANIES, A DRIVING FORCE BEHIND TRANSFORMATION

EXECUTIVE SUMMARY

600

No of GRI Reports

International analysts. Spanish companies stand out in different forums for their high level of sustainability. Worldwide, there are many different providers of information who analyse companies according to ESG (Environmental, Social and Governance) variables. Opinions agree that Spanish companies are among the most committed towards sustainability in the world. MSCI, one of the key international players in the field of socially responsible investment, grants Spanish companies included in its indices a slightly higher ESG rating than European companies and far higher than those included in the World, US and Emerging Markets categories.

(10 leading countries)

500 400 300 200 100

N LA N

G KI

LI RA

Y AN M

N PA

AZ BR

CA RI

Source: Global Reporting Initiative.

Average of the sustainability index per region

3,60

MSCI MARKETS EMERGING

4,09

MSCI EEUU

5,92

5,23

MSCI WORLD

MSCI EUROPE

6,13

Another case of international analysis, RobecoSAM, publishes a yearbook that includes the most sustainable companies in the world according to its own methodology. The last edition of this study includes 20 Spanish companies, of which 13 are among the leader, gold, silver and bronze categories. In previous editions, around the same number of companies were included in the index, 73% belonging to the aforementioned superior categories (on average over the past 5 years). Another of those highlighted in the sector is the FTSE Group, which develops its family of FTSE4GOOD indices. In 2008, FTSE and Bolsas y Mercados EspaĂąoles created the FTSE4Good IBEX index formed by securities listed on the IBEX 35 and on the FTSE Spain All Cap. Index that meet certain ESG criteria. The existence of this index not only makes the efforts of Spanish companies in Social Responsibility more visible but also promotes the introduction of ESG criteria into the decisions of national investors.

MSCI SPAIN

Source: MSCI ESG Research, Global Reporting Initiative.

EXECUTIVE SUMMARY

1.6 THE THREE DIMENSIONS OF THE SOCIAL RESPONSIBILITY MODEL OF SPAIN

The three dimensions of the Social Responsibility Model of Spain responds to the most significant environmental, social and governance opportunities and challenges in Spain.

Most highly-valued Mediterranean country with regards to its marine strategy

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1st country in the world with most declared biosphere reserves (together with the USA)

ENVIRONMENT Spain depends greatly on its natural attributes included in its production model. In turn, challenges such as climate change and other phenomena such as its orography and its variety of climates make it particularly sensitive. Therefore, the Social Responsibility Model of Spain seeks to manage the following aspects: Natural Capital: the preservation and sustainable use of natural resources requires a great combination of actions in which all players are involved. Forest management, the preservation of large natural areas or efficient and supportive water management are differential elements. Climate y energy model: the continued advance in climate change requires processes to adapt and mitigate this phenomenon and its present and future consequences. The strategy involves moving towards a more efficient energy model and increase the supply based on cleaner and more renewable sources. Spain is at the forefront in adopting sustainable energy production technologies. Sustainable production models: the introduction of production models that are more respectful towards society and the environment is essential, especially in more representative sectors or those with greater impact and improvement potential within the economic framework of the country.

EXECUTIVE SUMMARY

1.6 THE THREE DIMENSIONS OF THE SOCIAL RESPONSIBILITY MODEL OF SPAIN

SOCIETY Two Spanish cities among the top 20 for cycling

Generation of opportunity: lequal opportunities is more than a right, it is an obligation. As such, a wide variety of action is taken in public and private areas to improve and balance the disadvantages of different groups, such as the disabled and unemployed youngsters. Support for alternative production or work organisation models may also be a significant source of competitiveness and stabilisation for the Spanish economy.

Social responsibility is â&#x20AC;&#x153;The choice of Spanish societyâ&#x20AC;?. Therefore, there must be a strong culture that appreciates and encourages the values linked to sustainable development.

Quality of life: : quality of life means being a great country in which to live. Therefore, every effort is made to continuously improve the different standards of life from all levels of management. Generating an inclusive and sustainable welfare state is an explicit mandate of Spanish society.

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Responsible citizens: the expectations of Spanish society involve a high and increasing level of demand. Values such as solidarity and the stimulation of development aid policies form part of the demeanour of the Spanish people. Moreover, the integration of responsible consumption criteria forms a greater incentive for the construction of a competitive and inclusive model of society.

The rate of accidents in the workplace involving sick leave in Spain dropped by 50.24% between 2006 and 2014

Traffic accidents have dropped 76% over the past 14 years, which is the same as saving 3476 lives a year

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EXECUTIVE SUMMARY

Social economy in Spain is more highly developed than in Europe, providing 12.5% of employment in comparison with 6%

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During its first three months of activity, the Transparency Portal recorded over two million sites viewed and more than 1,200 requests to access information

1.6 THE THREE DIMENSIONS OF THE SOCIAL RESPONSIBILITY MODEL OF SPAIN

GOVERNANCE Adequate governance of social responsibility in companies, institutions and citizens is an essential ingredient in the continuous improvement of the Social Responsibility Model of Spain. Promotion and stimulation of Social Responsibility: lthe existence of a comprehensive, balanced model of social responsibility includes the coordinating of activities and policies that ensure Social Responsibility reaches the entire social and business network in all areas and geographies. Integrity and fight against corruption: corruption and the lack of transparency involves a cost that deducts competitiveness and efficiency from democracy and makes it weaker. Therefore, increasing demands in terms of transparency for all players, encouraging corporate governance and strengthening the legal system to eliminate corruption help improve the social and economic environment. Business leadership: a business leadership that uses its drive and potential to innovate in Social Responsibility is felt throughout the socio-economic network of the country. The visibility of Spanish multinationals in Social Responsibility helps improve the image and position of Spain abroad.

NATURAL RESOURCES

Forest Management

Protected areas

Water Optimisation

Protection of natural resources, as the main environmental responsibility of the country.

Response to the climate challenge

Renewable sources

INTEGRITY AND FIGHT AGAINST CORRUPCIĂ&#x201C;N

Transparency Act

Gobernance

Corporate criminal responsibility

Reinforce transparency, governance and the fight against corruption are essential in strengthening the trust of our institutions and companies.

A NIE S

BUSINESS LEADERSHIP Policies and management tools

Mobility

QUALITY OF LIFE

SPANISH MODEL 3 actors 3 dimensions

Tourism

Development of sustainability policies in the main sectors of our economy with high sensitivity to the scarcity and quality of our natural resources.

CITIZENS

Sustainability in public procurement

Leadership, coordination and deployment of resources to promote SR are essential in reaching a structure SR model nationwide.

Agriculture

Universal health and social assistance

Inclusive welfare

Sustainable Economy Act

Energy efficiency

Spain makes significant efforts to mitigate climate change. Transformation of the energy model and improving consumption efficiency are critical for success.

PROMOTION AND STIMULATION OF SR Estrategia de RSE

SUSTAINABLE PRODUCTION MODELS

CLIMATE AND ENERGY MODEL

Reporting and accounting

International reputation

Having exemplary and innovative companies in terms of SR generates a virtuous and progressive cycle for a socially responsible production network.

IN S TI T U TI

RESPONSIBLE CITIZENS

Solidarity

Social production through health improvement and accessibility tools and the search for an inclusive welfare framework direct public action.

GENERATING OPPORTUNITIES

Citizens &SR

Development cooperation

Citizens constitute the beginning and end of SR. Promoting a supportive culture, integration of SR in consumer decisions and development cooperation are the mainstays of the mode.

Training in special skills

Entrepreneurship and social economy

Youth employment

The promotion of regulations and specific actions to promote equal opportunities is an essential value. Disability and youth are the main focus. Promoting the social economy favours selfemployment and the generating of alternative formulas for work organisation and production.

EXECUTIVE SUMMARY

1.7 CONCLUSIONS. PRESENT AND FUTURE OF THE SOCIAL RESPONSIBILITY MODEL OF SPAIN

The Social Responsibility model of Spain is a case built on dialogue, with the capacity to mature towards a successful model. The great complexity of interactions among the different players and the multitude of impacts in social, environmental and governance areas have been reduced thanks to strong consensus between the Authorities and the different political forces, society with its expectations and specific needs, and companies that have been able to value the strategic importance of Social Responsibility as a mainstay in their competitive position. Along these lines and as this study shows, intense, continuous cooperation through public-private partnerships and an open, dynamic model have been key factors in consolidating the model. The international community has acknowledged the great efforts being made by Spain in terms of social responsibility and sustainable development. Even more importantly, the multilateral bodies are adopting agreements that underline the basic attributes of the Spanish model. Hence, the Sustainable Development Goals recently assumed by the General Assembly of the United Nations create the need for closer cooperation among governments, society and companies in order to promote and strengthen a sustainable development model on a worldwide scale. The World Climate Summit in Paris in December 2015 also generated significant agreements that may only be reached through joint responsibility between public and private players. Spain is therefore faced with a great opportunity. To showcase a model that has proven to be effective when promoting social responsibility nationally and that could strengthen Spainâ&#x20AC;&#x2122;s position as a top player in change in the promoting of a fairer, more sustainable and more competitive world.

02.

APPENDIXES

THE SOCIAL RESPONSIBILITY MODEL OF SPAIN

2.1 A GLANCE AT SOCIAL RESPONSIBILITY

IN EUROPE

2.1 A GLANCE AT SOCIAL RESPONSIBILITY IN EUROPE Spainâ&#x20AC;&#x2122;s condition as a member of the European Union has a positive impact on the configuration of Social Responsibility Model of Spain. The EU has played and plays a significant role in the configuration and development of Social Responsibility from a global viewpoint, closely linked to more sustainable and competitive business models. From a European viewpoint, Social Responsibility refers to company responsibility for their impact on society. Its promotion and development is a priority, as it is important for sustainability, competitiveness and innovation of European companies and their countries economy. It generates positive impacts on risk management, cost savings, access to capital, client relations and human resource management.

Evolution of Social Responsiibility in Europe

Europe Strategy 2020

New European CSR Strategy (2016)

European CSR Strategy Renewed EU strategy for 2011-2014

Green Paper Promoting a European framework for CSR (2001)

Comunication CSR, a business contribution to sustainable development (2002)

Communication Making Europe a pole of excellence on CSR (2006)

Lisbon Strategy (2000)

2.1 A GLANCE AT SOCIAL RESPONSIBILITY IN EUROPE

Political agenda of the European Union on CSR Promoting Social Responsibility visibility and the dissemination of good practice Monitoring and improving the levels of trust in companies Improving self-regulation or joint regulation processes Promoting the market reward for Social Responsibility Improving transparency and reportability in social and environmental areal Integrating Social Responsibility into education, training and research Highlighting the importance of national and regional Social Responsibility policies Coordinating different approaches to Social Responsibility in Europe

The EU is a very important agent of Social Responsibility globally, placing Europe at the forefront worldwide. One of the most noteworthy elements of the commitment to Social Responsibility is Europe 2020 â&#x20AC;&#x153;A European strategy for smart, sustainable and inclusive growthâ&#x20AC;?, in which economic growth, social progress and sustainability are linked. In turn, an objective of the European Commission is to promote the fact that EU has an intelligent, sustainable and integrating economy. These three priorities, which support each other mutually, must help the EU and its Member States generate high levels of employment, productivity and social cohesion. More specifically, the EU has established five ambitious projects for 2020 in terms of employment, innovation, education, social integration and climate/energy. In each of these areas, each Member State has established its own targets. The strategy is supported by specific measures by the EU and by Member States. The EU is also developing a series of regulations through which it seeks to strengthen a leading European framework in aspects identified as being of most relevance. Two of the most relevant Directives due to their impact in 2015 and 2016 are: 1. Directive 2014/24/EU on public procurement, in which a clearer legal framework is established on how to integrate Social Responsibility criteria into Public Authority procurement. 2. Directive 2014/95/EU as regards disclosure of non-financial and diversity information by certain large undertakings and groups

2.1 A GLANCE AT SOCIAL RESPONSIBILITY IN EUROPE EU targets for 2020 Employment

75% of the 20-64 year-olds to be employed

R&D 3% of the EUâ&#x20AC;&#x2122;s GDP to be invested in R&D Climate change and energy sustainability

Greenhouse gas emissions 20% (or even 30% if the conditions are right) lower than 1990

20% of energy from renewables

20 % increase in energy efficiency

Education

Reducing the rates of early school leaving below 10%

At least 40% of 30-34-year-olds completing third level education Fighting poverty and social exclusion

At least 20 million fewer people in or at risk of poverty and social exclusion

2.1 A GLANCE AT SOCIAL RESPONSIBILITY IN EUROPE For their part, considering the lines of action of the European Commission and the Parliament, EU Member States are adopting their own policies to promote, disseminate and integrate Social Responsibility. These national policies are greatly influenced, among others, by the economic and social network of each Member State, as well as by the institutional model of the country in question. They therefore have varying degrees of development. Some countries at the forefront in terms of levels of maturity, efficiency and integration of Social Responsibility are as follows:

ALEMANIA - CSR MADE IN GERMANY: a consolidated approach with ESG elements as attributes of the economy and the foreign projection of the country. A series of priority lines are highlighted, including: reflecting the UN Guiding Principles on Business and Human Rights in a Plan of Action, progressing in the sustainability of production and supply chains and reviewing the legal proceedings in terms of conflict-free minerals. DENMARK: four major areas of impact of the 2012 – 2015 plan: strengthening the integration of international Social Responsibility schema, alliances for responsible growth, transparency and use of the public sector as a driving force for Social Responsibility. FRANCE - CSR STRATEGY IN CREATION: the government has promoted a platform (Plateforme nationale d'actions globales pour la Responsabilité Sociétale des Entreprises) that works on different lines (competitiveness, transparency and Social Responsibility in the value chain) to define the national Social Responsibility strategy. A plan has recently been published for the promotion of sustainable public procurement until 2020 (Plan national d’action pour les achats publics durables) HOLLAND: the main activity of Holland is structured around three major areas of development, the National Business and Human Rights Plan (2013), the circular economy as an element for improving the environmental impact of the economy and the promotion and development of corporate transparency in reporting. SWEDEN: work on two fronts: the first to integrate Social Responsibility into the Authorities, institutions, public bodies and companies (where it is one of the leading countries) and the second focusing on developing a environment to promote Social Responsibility in private companies that centres on adopting international mechanisms and tools.

2.2

THE THREE DIMENSIONS

THE THREE DIMENSIONS 2.2.1 ENVIRONMENT

NATURAL RESOURCES

Forest Management

Protected areas

Water Optimisation

Protection of natural resources, as the main environmental responsibility of the country.

CLIMATE AND ENERGY MODEL

Response to the climate challenge

Renewable sources

Energy efficiency

Spain makes significant efforts to mitigate climate change. Transformation of the energy model and improving consumption efficiency are critical for success.

SUSTAINABLE PRODUCTION MODELS

Agriculture

Tourism

Mobility

Development of sustainability policies in the main sectors of our economy with high sensitivity to the scarcity and quality of our natural resources.

ENVIRONMENT

2.2.1.1 NATURAL CAPITAL

Spain is a country of great natural wealth. Thanks to factors such as its geographic position, its geological diversity, its great climate variability, its history or the existence of islands, it is included in the list of the 25 biodiversity hotspots in the world. It can also be considered the most diverse country of the European continent, with around 85,000 species, including more than 50% of the animal species in Europe and 80% of the species of vascular plants, and the 3rd country in the world with most declared biosphere reserves. 50% of the animal species present in Europe can be found in Spain, which is the European country with most endangered species. The Social Responsibility Model of Spain is supported by forest management, the protection of natural areas and water as key elements of an economy that seeks to conserve the biodiversity and natural wealth of the countrye.

FOREST MANAGEMENT Forests take up 55% of the geographic area of Spai, placing the country second in Europe with most woodland- From a natural capital viewpoint, they are a valuable source of wood, paper and other forest products that are particularly relevant for the diversificatio of the economies in rural zones. Hence, the main objective of the forestry policy in Spain poses the strengthening of this economic sector and contributing towards rural development through the forestry activity, maintaining and improving the state of preservation of forests and their economic potential. The Forestry Programme is based on three main. 1. Legislative instruments that are coordinated with existing ones in the different Autonomous Communities.

2. Forestry planning instruments (primarily the Spanish Forestry Strategy, the Spanish Forestry Plan and the Forest Resource Organisation Plan). 3. Instruments for the implementation of sustainable forest management measures and institutional reinforcement from a participative viewpoint.

ENVIRONMENT

2.2.1.1 NATURAL CAPITAL

On a business level, the wood and furniture sector linked directly to timber farming moved a total of 127,200 direct jobs in 2014, generated by the 11,806 companies dealing in the transformation of timber (52,100 jobs) and the 14,167 dealing in furniture production (75,100 jobs), according to data from the CESCE 2014 Wood and Furniture Sector Report. As a result of the good management of this sector, which combines economic operations and sustainability, Spain has increased its woodland at an annual average rate of 2.19% since 1990 (far above that of the European average that stands at 0.51%). At present, Spain is second in the European Union in terms of total woodland -27.7 million hectares, 11 in protected areas. Certificates in sustainable wood are gaining weight in Spain. Between 2012 and 2014, woodland managed under Social Responsibility parameters and certified under one of the strictest models FSC, increased by 32.8% (compared with 19.7% overall).

Spanish National Parks

Aigüestortes i Estany de Saint Maurici

Picos de Europa

Islas Atlánticas de Galicia

Ordesa y Monte Perdido

Sierra de Guadarrama

Monfragüe

Doñana Timanfaya

Teide Garajonay

Sierra Nevada

As well as the fact that the forests and natural areas are a wealth of production and a source of employment, they provide a wide variety of very important ecological services with regards to sustainability. Among the most noteworthy is the help in protecting water and soil resources or the contribution towards fighting climate change, basically through carbon storage. An important milestone in the preservation of natural areas was the approval of the National Parks Act 30/2014 of 3 December.

Cabaneros Tablas de Daimiel

Caldera de Taburiente

PROTECTION OF NATURAL AREAS

Archipiélago de Cabrera

Two of the new issues in this new text is the establishing of mechanisms to react quickly and effectively in the event of an environmental emergency and the exceptional involvement of the State in the case of the unfavourable conservation of protected areas. It also forbids the extraction of hydrocarbons and aggregates, which will be considered activities that are incompatible with natural areas. Networking is also of great relevance for the sustainable preservation of these areas. For example, the Red Europarc-España is the main professional forum of Protected Areas in Europe that provides a space to exchange professional experience, collaborate in technical projects and progress in common objectives regarding the environment.

ENVIRONMENT

2.2.1.1 NATURAL CAPITAL

Thanks to these initiatives, Spain currently has 15 national parks covering an area that has increased by 10% since 2012 thanks to the incorporation into the network of the Sierra de Guadarrama Park (in the provinces of Madrid and Segovia) and the expansion of Las Tablas de Daimiel (Castilla-La-Mancha). Furthermore, 30% of the land is subject to protection and means of nature conservation, as it forms part of the Natura 2000 Network (15 million hectares), making Spain the country with most land in the network. All of these efforts by the authorities involved are accompanied by an increasing awareness and involvement by citizens. According to the latest Eurobarometer performed between April and May 2014, the Spanish declare to be very concerned for nature and exceed the European average in many of the key issues. More specifically, 56% of the citizens interviewed indicated that environment protection is “very important” and another 40% stated that it is «important». The protection of our marine resources is also key for the economic development and environmental sustainability of the environment. Approval of Act 2/2013 of 29 May for the protection and sustainable use of the coast and amendment of the Coastal Act, meant a giant step forward in environmental protection and the sustainable development of the coast. Its main goal is the environmental protection of the coast, differentiating between the urban and rural sections of beaches, preserving virgin beaches by limiting their occupancy and activities, and increasing their protection in all cases. This reform forbids the construction of new buildings on the coast in the public land maritime domain (shore and beach line) and in its adjoining protective easement area. It also forbids any extensions to existing buildings. Biodiversity is essential for the development of life, key for maintaining our wellbeing and an opportunity for generating wealth and employment.

According to the assessment made at the “Health Oceans, Protective Ecosystems” Conference by the Commission on the application of the Marine Strategy Framework Directive, a body answerable to the European Commission, Spain is the most highly valued Mediterranean country and the second in the Atlantic region insofar as its marine strategy.

ENVIRONMENT

2.2.1.1 NATURAL CAPITAL

BIODIVERSITY FROM THE PUBLIC SECTOR Fundación Biodiversidad is a body attached to the Ministry of Agriculture, Food and the Environment that was created in 1998 to protect our natural capital and our biodiversity. Its mission is to contribute towards the protection and conservation of our natural heritage and biodiversity from two sets of requirements. The implementation of major conservation projects and the channelling of aid and funds – many of which are European funds - for the development of projects by other organisations such as NGOs, research organisations, universities, etc., collaborating each year in more than 300 projects. Within its projects most closely linked to The Social Responsibility Model of Spain are the following: Annual average growth of woodland is four times higher than that of Europe

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Emplea Verde, which includes the “empleaverde initiative” that seeks to push the potential of environmental and sustainability issues to generate jobs and create and consolidate green companies. The “emprendeverde network” is the first platform supporting entrepreneurs to specialise in the green business. Its goal: to encourage the creation and consolidation of companies or new lines of business in activities linked to the environment and to channel investment towards sustainable economic activities Spanish Company and Biodiversity Initiative. Created in 2013 with the aim to integrate natural capital into business policy and management, to showcase the contribution of large companies towards conserving the natural heritage and to channel private funding to conserve biodiversity. The challenge is to include biodiversity conservation and management in the business strategies of the different sectors of the Spanish economy and to identify alternative and innovative opportunities and projects as one of the solutions to the current crisis. The Responsables con la Biodiversidad, project linked to this initiative provides practical information and tools to enable companies to learn and find out how to manage biodiversity, including three infographics (“Biodiversity in Spain”, “The relationship between Biodiversity and business” and “The Path to Biodiversity”) and the paractical guide “The Path to Biodiversity”

ENVIRONMENT

2.2.1.1 NATURAL CAPITAL

OPTIMISATION OF WATER Water is a highly valued asset in Spain for the ecosystems, for society and for industrial production. There is a great variability in the climate of different areas of the country, which means that there are certain rainfall patterns that are relatively imbalanced and irregular. Furthermore, the impact of Climate Change leads to new challenges, such as the management of floods and droughts and water availability. Along these lines, intelligent water management is critical for the countryâ&#x20AC;&#x2122;s competitiveness and wellbeing. Notable differences among the regions of Spain can be seen in river runoff (an indicator used to measure water resources). In some areas, such as the Cantabrian Basin and the main mountains, rainfall easily exceeds evaluation and human and animal consumption, generating surplus water. Others, however, are intensive in the use of this resource and have less favourable conditions, such as the Mediterranean regions and in large sectors of the Canary Islands. The indexes of rainfall and water joining rainwater flows have annual variations of up to 16 times in different points of the Spanish geography. The water joining the cycle is not only used every day in Spanish homes (around 14% of the total) or as input in a great many industrial production processes (where 6% of the total is consumed), but is also used in irrigated agriculture, where almost 80% of total water is used. The irrigated area accounts for somewhat over 3,700,000 ha, which is around 7% of the geography and almost one fifth of the net agricultural land area, despite it including 50% of total agricultural productionl. The efficient use of all of this natural capital is essential to continue with the high level of economic and social development in Spain. It is therefore necessary to combine the satisfaction of the different demands (domestic, industrial and agricultural) with the security of supply. The new challenges posed by the 21st Century: increased demand for water, less provision of resources or increase in quality standards, mean that the Spanish water governance standard permanently continues to adapt.

ENVIRONMENT

2.2.1.1 NATURAL CAPITAL

Spain has been at the forefront in hydrological planning, with the Water Acts of 1866 and 1879 and the National Hydrological Works Plan of 1902. Alongside this, its orography has been highlighted for the use of water and energy to become the fourth country in the world with the most major dams. This plan encourages the increase in the regulation of rivers, bearing in mind the effects of Climate Change, and intensifies the activities to include new, unconventional resources into the water cycle (such as desalination, regeneration or reuse). Furthermore, measures to improve the quality of water are included to ensure the health of the aquatic ecosystems and their associated services, ensuring a balance between the provisions arising from the uses of water and the correct working order of the hydrous system. Also taken into account is the management of extreme weather phenomena - droughts and floods, which are typical in Mediterranean climates - and one of the main threats for ensuring the supply of both and goods and people through Special Plans for the management of droughts and floods included in the Plans. Lastly, the plan also coordinates the different public development policies, from agriculture to land planning and including energy, industry and tourism planning. Water services in Spain are also highly centred on the integration of new technologies. Public programmes supporting R&D+i by MINECO (Ministry of the Economy and Competitiveness) and CDTI (Centre for Industrial Technological Development) have helped position Spanish companies and technology centres at the forefront of European-level know-how. Spain coordinates the Joint Programme Initiative â&#x20AC;&#x153;Water challenges for a changing worldâ&#x20AC;? (Water JPI) throughout Europe through MINECO. Its capacity to attract European funds for research and innovation into water has been a real achievement. 5 of the 11 major innovation projects in water management funded by the European Commission Seventh Framework Programme in 2013 have been coordinated by Spanish organisations. This entire series of initiatives means that the Spanish water management system, together with the combined efforts of the Public Authorities and private companies, has been and remains a source of inspiration to other countries in both the Mediterranean region and in other latitudes where the challenges of water management are similar. Therefore, Spain stands at the forefront worldwide in the use of water for irrigation and in the development of new alternatives for the use of water resources, such as water regeneration, desalination and aquifer recharging. 46

ENVIRONMENT

2.2.1.2 CLIMATE AND ENERGY MODEL

RESPONSE TO THE CLIMATE CHALLENGE There is nowadays scientific evidence that our method of energy production and consumption is generating changes in the global climate that, primarily through greenhouse gases, is intensely affecting climate patterns, temperatures and rainfall all over the world. Climate Change affects everyone. The potential impact is huge, it include shortages of drinking water, great changes in the conditions for food production and an increase in mortality rates due to floods, storms, droughts and heat waves. The phenomenon is not only environmental, but also has severe economic and social consequences. Poorer countries, which are less prepared to tackle fast changes, will suffer the worst consequences, although developed economies are also at serious risk. In the specific case of Spain, there are different scenarios but all of them involve significant overheating and intensification of rainfall patterns. The maximum and minimum temperatures will increase, as so the number of days of intense rainfall, and the decrease in accumulated rainfall. The sea levels and the risk of flooding will also increase. In this new scenario, the natural habitats are at risk and there are species and ecosystems that are seriously threatened. There are, however, also significant social and economic risks. Therefore, Spanish policy has defined a series of priority economic sectors in which this phenomenon may have most impact. These include the farming, fishery and forestry sector, industry, energy, tourism, urban planning and construction, water resources and health. From a global viewpoint, work is underway with regards to preventive action. The latest report from the IPCC (Inter-Governmental Panel on Climate Change) iindicates that to ensure the average global, preindustrial temperature to increase by no more than two degrees, significant changes must be implemented that involve decreasing investments in fossil fuels and significantly increasing investments in key sectors to build a low-carbon economy. It also indicates that the effects of climate change are already visible in all continents and oceans and that emissions must be reduced by 40 to 70% worldwide between 2010 and 2050, decreasing them to zero or negative levels by 2100.

ENVIRONMENT

2.2.1.2 CLIMATE AND ENERGY MODEL

A world pact is expected to be reached to reduce greenhouse gas emissions at the Climate Change Conference (COP21) held in Paris in December 2015. Maximum monthly temperatures Period 2011-2100

At a domestic level, the MAGRAMA (Ministry of Agriculture, Food and the Environment) has deployed several projects to fight climate change. An example of this are the Proyecto Clima for the reduction of greenhouse gases and the Carbon Fund for a Sustainable Economy the aim of which is to guide the economic activity back towards low-carbon models. The national benchmark is the Spanish Climate Change Office, created in 2001, which has different functions such as the national climate change policy, advice for other national authorities, the promotion of training, dissemination and innovation activities and the coordination of networks, among others. Furthermore, Spain has presented the project promoted by the MAGRAMA â&#x20AC;&#x153;One million commitments for the Climate- Towards the Paris COP21â&#x20AC;?, the aim of which is for citizens, institutions and companies to learn of what can be done to fight climate change and act decidedly.

Source: AEMET. Report generation scenarios regionalized for Spain. 2009.

On a local level, commitment is also growing and extremely influential and relevant, positive initiatives are being developed. This is the case of the Cities Climate Leadership Group that has arise for coordinated action from a Council-level viewpoint. Formed in 2005, the Group coordinates and promotes local climate control policies with the support of the Spanish Climate Control Office. Providing technical support to Local Governments to ensure they meet their objectives to alleviate and adapt towards climate control, to cooperate in joint projects among municipalities and to act as a forum in which to exchange experiences are some of the objectives of this initiative.

ENVIRONMENT

2.2.1.2 CLIMATE AND ENERGY MODEL

Evolution of non-renewable energy production GWh

200.000

150.000

100.000

50.000

0 2010 Nuclear

2011

2012

Coal

2013

2014

Fuel / Gas

Combined Cicle

40.000 As a result of this combined activity among all stakeholders, Spain stands fifth in the countries with lower emissions per € of GDP generated among the G20 member states, after France, Brazil, the UK and Italy, and 20.000 among the top 35 in the world. Furthermore, according to Eurostat, emissions in Spain dropped 2.1% in 2014,0 while industrial production grew by 1.4%, proving that economic growth is not necessarily head to 2011 2012 2013 2014 head with 2010 environmental care. Hydraulic (1)

Co-generation and remainder

Evolution of renewable energy production GWh

120.000

Spanish companies are also making every effort to transition towards a low-carbon economy. Thanks to these efforts, eleven Spanish companies are among the 187 world leaders in the fight against climate GWh 120.000 change, according to the “Carbon Disclosure Project” organisation. This index is formed by the 500 top companies worldwide to declare their carbon footprint. This places us as the fifth country with greatest 100.000 representation in the 2014 index, behind the US, Japan, the UK, South Korea and in the same position as 80.000 Germany. In relative terms, Spain heads the index with the greatest proportion of leaders among companies taking 60.000 part in the CDP project.

100.000 80.000

Wind

Photovoltaic solar

Climate change remains one of the greatest world challenges and Spain supports combined action among Thermalstakeholders solar Renewable the different tothermal provide the best possible response.

RENEWABLE SOURCES Renewable energies are vital in the fight against climate change, as not only do they reduce greenhouse gas emissions by not generating CO2 but also ensure an autonomous, safe energy supply. According to the WWF, all world energy could be obtained from renewable energies through a cost-effective, accessible transition by 2050. The use of this type of energy is a great stimulation, especially in a country such as Spain with great dependence on foreign energy supplies, as it enables the country to provide itself with its own sources. It is also a clean energy, as it uses water, wind or sun as its raw materials, producing barely any waste. Lastly, it also generates wealth and competitiveness, as an up-and-coming industry, extensive investment in R&D+i and the creation of highly specialised jobs.

60.000 40.000 20.000 0 2010

2011

2012

2013

Hydraulic (1)

Wind

Thermal solar

Renewable thermal

2014

Photovoltaic solar

ENVIRONMENT

2.2.1.2 CLIMATE AND ENERGY MODEL

However, the promotion and development of renewable energies is faced with great challenges that must be tackled. Two of the most significant are the continuity of supply (difficult compatibility in terms of production peaks and times of greatest demand, primarily due to discontinuity and the dependence on weather with regards to generation) and the funding of the model, which continues to depend on foreign aid in terms of its development and marketing, given that it depends on external premiums for its Business case. In Spain, the transition towards a model with a greater presence of renewable energies has come to fruition over recent years, thanks to the combined action of authorities and companies, making Spain one of the countries to export most renewable energy technology and projects worldwide. In 2014, renewable energies accounted for 42.8% of total electricity production

In 2014, renewable energies accounted for 42.8% of total electricity production, far above the second source of nuclear power, which a weight in the national electricity mix of 21.9%. Total renewable energy consumption stood at 14.6%, increasingly closer to the European target of 20% for 2020, at which time a higher level of 22,7% is expected. This energy source contributed 9.946 billion Euros towards GDP in 2013, 0.93% of the national total, while generating savings of 9.197 billion Euros for the electricity system. During this same year, net exports of goods and services in the sector accounted for 3.073 billion, making it a net tax contributor given that the difference between tax paid and subsidies received amounted to 1.163 billion (1.173 billion provided and ten million in subsidies received). Spain is one of the main international leaders in renewable energies. The country stands firm it both energy generation (European leader in wind power and third in photovoltaic power) and in installed capacity (first in the world in solar thermal power, fourth in wind power and third in the EU in hydroelectric power))2. The number of wind farms installed by 2014 exceeds 1,000 and, according to estimates by the European Wind Energy Association (EWEA), Spain will have almost twice the installed capacity in 2030 compared with what it has today. Furthermore, there are almost 60,000 solar electricity installations, with a capacity of around 4,500 MW.

Presence of Spain: Spanish business in the world. Ministry of Foreing Affairs and Coooperation 2013

ENVIRONMENT

2.2.1.2 CLIMATE AND ENERGY MODEL

ENERGY EFFICIENCY Energy efficiency consists of reducing energy consumption, maintaining the same energy services without decreasing comfort or quality of life, ensuring the supply of energy, protecting the environment and encouraging sustainability. 20% of the electrical energy consumed worldwide is from lighting and savings in this area is of great importance. Nowadays, energy efficiency is considered one of the best alternatives for reducing greenhouse gas emissions and other polluting elements that contribute towards climate change, and it is also important for ensuring the supply of energy. As a whole, helping ensure the sustainable growth of the economy. Available technology and responsible habits ensure lower energy consumption, improving the competitiveness of businesses and the quality of life of individuals. Energy efficiency can be covered in 4 major areas:

Buildings. One of the areas with most impact in terms of both lighting and use of energy. Transport: passenger and goods. Industrial companies. City lighting. In 2014, the Ministry of Industry, Energy and Tourism (MINETUR) launched the 2014-2020 National Energy Efficiency Action Plan, the minimal objective of which is to ensure an energy saving of 9% in 2016, with actions divided into 4 areas of impact. The expected savings will be the equivalent of the annual consumption of over 150,000 families and will avoid the annual emission into the atmosphere of over 440,000 tons of CO2.

ENVIRONMENT

2.2.1.2 CLIMATE AND ENERGY MODEL

The measures of the Plan include the following: Support plans for the energy refurbishment of buildings, with different programmes for the funding of architectural constructions and work on all types of building. For businesses, the measures established are along the lines of the technological improvement of equipment and processes and the implementation of energy management systems. Insofar are municipal activities, specific action is taken such as the plan to improve lighting in cities, developed together with the IDEA. The aim is to replace 30% of all traditional bulbs in traffic lights with LED bulbs, providing a saving of 80% in comparison with conventional lights. The measure is to be applied in 584 Spanish municipalities and 27 million people are to benefit from it. Also in the local environment, six Spanish cities have signed the LightScape Cities alliance, which seeks to promote their tourist resources through a lighting strategy that improves their image at night time and that, in turn, contributes towards energy savings and efficiency. On a municipal level, the objectives include increasing support for the environmental certification of buildings in terms of energy efficiency, the PVC Windows Renewal Plan or the Boiler Renewal Plan to ensure greater levels of energy efficiency in the home. In turn, the Spanish are increasingly aware of and implement different activities to reduce their environmental impact, including a reduction in energy consumption -63% of the population. Another initiative to be underlined is the Spanish Energy Efficiency Technology Platform, which combines public organisations, companies and civil society. This organisation seeks to innovate in energy efficiency technology, generating new solutions through the promotion of research and development into new techniques, products and services that help reduce the demand for energy through their energy efficiency. Thanks to all of these efforts and despite the fact that, in terms of energy, we continue to depend on foreign support, energy imports over the past five years dropped from 81.3% of gross energy consumption in 2008 to 70.5% in 2013, thus helping create a more sustainable energy model in Spain.

ENVIRONMENT

2.2.1.3 SUSTANAIBLE PRODUCTION MODELS

AGRICULTURE The Agriculture and Food sector include a very wide value chain and forms one of the key sectors of the Spanish economy. Its contribution towards national GDP amounts to 8.9 % and it generates 2.3 million jobs, representing 10.3% of total employment .With regards to the primary sector (production), in 2013 Spain was the eighth top exporter of agricultural products worldwide, according to the World Trade Organization. The sector is presented in major challenges in terms of sustainability. An example of this is climate change, which has a substantial impact on agricultural productivity, reducing the availability of freshwater due to the salinisation of groundwater and the drop in rainfall in some regions. Demographic growth and the increasing middle class generates a rise in the demand for food from a quantitative (greater amount) and qualitative (more refined products, sometimes with greater environmental impact) viewpoint. One of the solutions posed is the stimulation of agriculture that guarantees world food security, promotes healthy ecosystems and supports the sustainable management of the land, water and natural resources.

European leader in organic agriculture

The growing demand for organic products, estimated at a yearly 9% by experts4, motivated by their higher added value and the excellent foreign demand, generates major business opportunities not only for consolidated producers but also for entrepreneurs, despite their requiring the implementation of new measures to help improve sector competitiveness.

The organic production support strategy launched by the Ministry of Agriculture, Food and the Environment (MAGRAMA) in 2014 seeks to support the evolution and consolidation of organic production, stimulating domestic consumption and improving the marking of organic products and contributing towards sector structuring. The Agrifood Sustainability Network created by MAGRAMA aims to act as a bridge and contact between companies and public organisations related to or involved in the Agrifood Industry and to promote the comprehensive sustainability of the agrifood industry, encouraging contact and dialogue on sustainability among all stakeholders in the food chain.

http://marcaespana.es/es/economia-empresa/internacionalizacion/articulos/240/espanya-sabe-muy-bien

OTA 2012

ENVIRONMENT

2.2.1.3 SUSTANAIBLE PRODUCTION MODELS

World Economic Forum Index on Tourism Source: World Economic Forum

Business Environment Safety and security

Cultural resources business trip

Health and hygiene

Natural resources

Human Resources and labor market

Infrastructure tourist services

infrastructure information and communication

Infrastructure land and ports

infrastructure air transport

Prioritizing Travel and tourism international openness

Environmental sustainability Competitive prices

Organic production in Spain has boomed since the eighties and it is currently the European leader in the production of organic agriculture, with 1.6 million hectares of area, ahead of Italy, Germany, France and the UK, and eighth in the world. As an example is the farming of organic vines, which are growing progressively every year to increase the variety of wines by qualitatively and quantitatively and to increase the number of hectares used in this type of farming in Spain, placing it as a benchmark in the world, ahead of Franceand Italy. This leads to an improvement in the positioning of Spanish wines, supported by the excellence of the product and its production chain. Spain is now the top wine exporter in the world in terms of volume and third in terms of value.

TOURISM Tourism is an activity with great economic and environmental impact. It generates billions of dollars in exports and creates millions of jobs, consumes natural resources and sometimes involves high risks of environmental impact. In 2010, tourism accounted for 9.2% of all world GDP and is currently responsible for around 5% of total CO2 emissions, mostly from land transport, air transport and accommodation, which contributes towards climate change by 4.6%. In Spain, the third country to receive most visitors in the world, the relevance of the sector is even greater than the world average, amounting to 10.9% GDP and 11.9% of employment5.

Spain Europe and the Caucasus

Despite the fact that climate change could have a positive impact on tourism in the short term, such as an increase in holiday periods, the negative effects are much more dangerous. The increase in the sea level, desertification and scarcity of water and deforestation and damage to biodiversity are just some of these consequences. Sustainable tourism is not only a way of covering these risks but is also a business opportunity. Analysts predict that the growth in hotels and resorts included in the “ecotourism” category will increase by around 20% a year.

Spanish Tourism Satellite Account. Series 2008–2012. National Institute of Stadistics 2013.

ENVIRONMENT

2.2.1.3 SUSTANAIBLE PRODUCTION MODELS

Sun and sand tourism is the mainstay in Spain, but it is not alone. The increase in rural tourism, promoted by the Authorities, among other measures, through the Comprehensive Rural Tourism Plan 2014 that seeks to promote geographic areas with a lower tourist or economic flow, adapt the range of tourist activities to the demands of the new tourist environment and to strengthen foreign demand. This type of tourism is currently experiencing certain growth levels in travellers, overnight stays and occupancy that are above other types of tourism (hotel occupancy, tourist camp sites and tourist apartments), having more than doubled in terms of number of travellers and total overnight stays. In terms of associations, it involves different organisations that promote tourist ecology and sustainability. The Hotel Technology Institute is a Spanish organisation that promotes the efficiency and sustainability of companies linked to the hotel and tourist industry According to the 2015 report on competitiveness in tourism by the World Economic Forum “The Travel & Tourism Competitiveness”, Spain is the most competitive country for the first time in the history of this report. Figure shows the performance of the country in the different areas that place us as leaders in comparison with the average of the “Europe and the Caucasus” zone. In 2014, Spain was the third most visited country in the world with 64.99 million tourists and, for the second year running, broke the record in international arrivals, 7.1% greater than in 2013. Spain is the leader in sustainable tourism, according to the almost 40 protected natural areas accredited by the European Charter for Sustainable Tourism (ECST). These are natural areas where companies develop tourist activities that are committed to environmental protection. Garajonay National Park on the Canary Island of La Gomera and La Garrotxa Natural Park in Girona were models of the implementation of the ECST.

No cof certified members of the European Charter for Sustainable Tourism

40 35 30 25 20 15 10 5

IA TV D

AY RW O

KI VA SL O

UA TH

D N LA LI

N FI

Y LL

M AN

H O

O D PO

G N KI

Y AL IT

CE AN FR

Source: Europarc 2014

ENVIRONMENT

2.2.1.3 SUSTANAIBLE PRODUCTION MODELS

MOBILITY Sustainable mobility involves ensuring transport systems meet economic, social and environmental needs, reducing their negative repercussions to a minimum, and is a mainstay in the fight against climate change. The dependence of transport on fossil fuels, which generate a significant imbalance in Spanish trade. Furthermore, atmospheric pollution is an environmental risk for public health and the current urban mobility model has established motor vehicles as the main source of emission of pollutants. The Spanish Sustainable Mobility Strategy of 2009 was created as a framework of national reference to integrate the principles and tools of coordination to guide and give consistency to the sector policies encouraging sustainable, low-carbon mobility. Their implementation requires the involvement of all authorities and coordination instruments are considered, such as: the Cities Climate Leadership Group, the Network of Sustainable Local Development Networks, the National Climate Council, among others. Efficiency in vehicles

Annual CO2 emissions(kt) 120.000

97.540

100.000 80.000

76.361

60.000

The Authorities promote a change in fleet, not only for cars but also for vans, trucks and buses, through â&#x20AC;&#x153;Plan PIVEâ&#x20AC;?. The IDEA (Institute for the Diversification and Saving of Energy) estimates that the energy savings associated to this initiative (implemented for the eighth time now) will stand at around 412 million litres of fuel, which is equivalent to more than 2.6 million barrels of oil. This means a drop in greenhouse gases of 850,000 tons of CO2 a year. The Environment Promotion Plan (PIMA Air 4) for the purchase of commercial vehicles, gas vehicles and electric bicycles forms part of a global strategy that was designed and started by the MAGRAMA and that seeks to improve air quality in Spain.

40.000 20.000

2011

2012

2010

2009

2007

2008

2006

2005

2003

2004

2001

2002

2000

1999

1997

1998

1995

1996

1994

1993

1991

1992

1990

CO2 emissions and other GG emissions generated by road transport doubled in Spain between 1990 and 2007 and then began to drop. Regardless of the crisis, this drop is also related to the improvement in the technology and energy efficiency in new vehicles.

ENVIRONMENT

2.2.1.3 SUSTANAIBLE PRODUCTION MODELS

Efficiency in driving

Growth in vehicle sales January-July 2015 vs 2014

According to a recent study on sustainable mobility in Spain, 82% of all drivers require more information on efficient driving techniques to help them save fuel and reduce pollution. Furthermore, the trend of car sharing is on the rise, especially among youngsters, not only through car sharing platforms, which still only involves a small percentage, but also through relatives, friends or colleagues. This practice is most perceived as a system to help reduce traffic in the cities. According to the Eurobarometer, the Spanish also perform other activities to reduce their environmental impact, including the use of public transport (59%) and the use of more environmentfriendly means of transport (40%). New trends

65%

Hybrid cars

40%

Electric cars

Total Touring

22%

Hybrid cars are one of the solutions with which the private sector has revolutionised the car sector. In Spain, the registration of this type of vehicles over the first seven months of the year grew by 65% in relation to the same dates in 2014. The demand for electric cars, despite not being overly popular due to the few facilities available at present for charging, also increased by more than 40% over this year. The registration growth rates for this type of vehicle are three times and twice as high, respectively, as all vehicle registrations up to July 2015, as can be seen in the figure. Another way of promoting mobility is through the range of public bicycles that an increasing number of local councils provide for citizens and the increase in length of bike lanes. Two Spanish cities, Seville and Barcelona, have been classified among the 20 best cities for cycling (tenth and eleventh), according to The Copenhagenize Index 2015. The number of bicycles and stations never ceases to increase year after year, as can be seen in the following figure published on the website bicicletapublica.es.

ENVIRONMENT

2.2.1.3 SUSTANAIBLE PRODUCTION MODELS

Number of bike-sharing bicycles in Spain at the end of the year

Stations

Systems

3000

120

2500

100

2000

1500

1000

500

Systems

Bicycles (x10) and stations

Bicycles (x10)

2008

2009

2010

2011

2012 CC

2013

2014

Public Bicycle Observatory in Spain www.bicicletapublica.com

THE THREE DIMENSIONS 2.2.2 SOCIAL

RESPONSIBLE CITIZENS

Solidarity

Citizens &SR

Development cooperation

Citizens constitute the beginning and end of SR. Promoting a supportive culture, integration of SR in consumer decisions and development cooperation are the mainstays of the mode.

GENERATING OPPORTUNITIES

QUALITY OF LIFE

Universal health and social assistance

Inclusive welfare

Social production through health improvement and accessibility tools and the search for an inclusive welfare framework direct public action.

Training in special skills

Entrepreneurship and social economy

Youth employment

The promotion of regulations and specific actions to promote equal opportunities is an essential value. Disability and youth are the main focus. Promoting the social economy favours selfemployment and the generating of alternative formulas for work organisation and production.

SOCIAL

2.2.2.1 QUALITY OF LIFE

UNIVERSAL HEALTH The Spanish health system operates according to certain principles and criteria that involve public funding, universality and free access to health services, based on rights and duties defined for citizens and public authorities. The provision of comprehensive health care ensuring high quality levels that are duly assessed, controlled and efficient, but there are some challenges ahead, like the increasingly longevity of the population, or the strong drop in the birth rate over recent decades.

Spain has one of the most efficient health systems with the best results in the world

However, despite these challenges, our National Health System is among the most efficient universal health systems in the world and first in the European Union. It is fully funded by taxes and expenditure in relation to GDP is 22.6% lower than the average in advanced countries. Not only is it more efficient, but it also tends to obtain better results. An example of this is the existence of 3.8 doctors for every 1000 patients, compared with the 3.2 in the OECD and the high life expectancy that is among the oldest in the world, at 82.84 - 2.5% higher that this reference group. Spain holds a prominent position in the development of medical and healthcare products and services. New technologies have a major impact on the healthcare sector, which is also at the forefront in their adoption for both patient treatment and management. A result of this is the great progress involve in the digitalisation of medical records or e-prescriptions, and the inclusion in the public health system of innovative therapies in reproductive medicine or in the treatment of illnesses of all types.

Source: World Health Statistics 2013. WHO.

SOCIAL

2.2.2.1 QUALITY OF LIFE

INCLUSIVE WELFARE Spain has established a model of inclusive welfare over recent decades with very high social protection standards. The “Better Life” index published by the OECD places the country as one of the most highly-valued in different aspects closely linked to quality of life, such as the “Work-Life Balance” (94th percentile, i.e. 94% higher), the “community” aspect (83rd percentile) and the “Health” factor (75th percentile). Socialisation, i.e. the frequency with which we are in contact with the people surrounding us and the quality of our personal relationships, is a determining factor in defining our welfare: A wide variety of actions in public and private areas makes Spain one of the most noteworthy countries in inclusive welfare, such as:

An extensive public pension system: The public pension system has a net replacement rate of 80% of the pre-retirement salary in comparison with the average 66% of the OECD as a whole. A significant network of maternity and family support: The State and autonomous communities have maternity support packages in cases of multiple birth, large families, support for independent mothers and other tax deductions. According to the index produced by the NGO Save the Children, Spain is the seventh best country in which to be a mother. A country open to immigration: over the past thirty years, the density of the immigrant population has multiplied by 20, there now being 10 foreigners for every one hundred Spaniards, without generating friction or marginality. A safer country: The crime rate for every one thousand inhabitants dropped by 11% between 2003 and 2014 to stand at 44.8. A labour market with fewer accidents: The rate of accidents in the workplace involving sick leave in Spain stood at 3,009.2 accidents for every one hundred thousand employees in 2014, 50.24% lower than in 2006. A country with fewer traffic accidents: The reduction in traffic accidents, one of the aspects monitored by the Sustainable Development Objectives, fell by 76% between the year 2000 and 2014. This is equivalent to saving 3476 lives a year in comparison to the start of the millennium, or 4,710 lives since the maximum reached in 1989. 61

SOCIAL

2.2.2.2 CITIZEN EXPECTATIONS

SOLIDARITY Two areas stand way above the rest in terms of the solidarity among the Spanish: organ transplants and donations and the involvement of citizens in NGOs and developing countries.

Over the past thirty years, the immigrant population has multiplied by 20 and has become a part of Spanish society, and there are currently around 10 foreigners for every one hundred Spaniards

eet

it!

According to data by the National Transplant Organisation, a rate of 36 donors per million of population (pmp) was reached in 2014, with a total of 1,682 donors leading to 4,360 transplants. In comparison with this, the United States has a donor rate of 25.8 pmp and the EU average is 19.2. In 2014, Spain broke its own record once again by performing a total of 45 transplants from 16 donors, two of whom were alive, in just one day. With these figures, Spain been the world leader in organ donations and transplants for twenty three years. The National Transplant Organisation (ONT), which celebrated its 25th anniversary in 2015, was the first European organization to be directly answerable to the Ministry of Health. This formula and its organisational model have been fully or partially transferred to many countries around the world. Furthermore, the ONT has played an essential role in the development of recommendations and regulations on this matter in the EU. Citizen involvement is reflected by the existence of almost 46,000 supportive associations and 15,000 organisations. The most numerous are those caring for people from a social, psychological, educational or health-related viewpoint. These are followed by those dealing in human rights (6.7%), leisure and free time (5.9%), the promotion of culture (1.6%), cooperation with development (1.6%), the environment (1.2%) and animal rights (0.2%). There are Spanish organisations with a model of support and social action that has become a benchmark for organisations around the world, such as the Food Bank or CĂĄritas. Furthermore, according to the latest report by the Volunteering Platform of Spain (PVE), there are 5 million volunteers in our country. The study indicates that 10% of the population are currently involved in volunteering activities, whereas 8% indicate to have been involved at some time in their lives. Around 2,500 aid workers and 13,000 missionaries work on projects spread over the five continents. With this yearâ&#x20AC;&#x2122;s approval of the 25/2015 Act of 30 July on volunteering and on the encouraging of voluntary work, major progress has been made in the sector, such as the fact that the under-16s can take part in volunteer activities with authorisation and the expanding of the promotion of measures to reduce the working day or the possibility to adapt the working day to include volunteer work, among other measures that also involve corporate volunteering. 62

SOCIAL

2.2.2.2 CITIZEN EXPECTATIONS

The international Give& Gain Day volunteering initiative in companies, which is Spain is led by Forética, had an impact during the 2015 event of almost 1400 volunteers, 7400 hours of volunteering and 14000 beneficiaries in just one week.

CITIZENS & SOCIAL RESPONSIBILITY The past twenty years have experienced the increase in consumer awareness. An informed consumer who seeks and is interested in information related to consumer items, production processes, raw materials used, working conditions in production or environmental impact. The “Forética 2015 Report on the state of Social Responsibility in Spain” explains the current predisposition of the Spanish with regards to responsible consumption and their perception of social responsibility. An informed citizen is a citizen who is more aware of his environment, of the global problems in terms of sustainability and of his possible role in having a positive impact on the building of future society. Given the importance of citizen awareness in the generating of significant changes, one of the lines established in the Spanish CSR Strategy involves the integrating of Social Responsibility into education, training and research as a way of including personal and social contributions into the obtaining of a more sustainable model.

W TH AN

O TH G IN ER IN O N O S T O IN D E V RN SU AT M A AT RA IO N N AG IO N CE N EM A PR L EN EX O P T D UC ROF PAN ES TS SI O SI AN N O N D AL CO RE IS N SP EC M CE O O RN N N S O IB /A LE TT MIC E P P Q N R E UA IC TI RF O ES O LI SU N TY TO RM PP A P O RO N CU W RT C O D RR DUC STO E IS I M T ES AD S / S ERS VA O EN F ER N I TS TA VI V RO EM ICE G E ED N T S P H M LO G IC EN RO Y A EE TA L UP BE S L S, RE H CU GO A SP V O LT IO D O R CO N AN UR SI E M B D ,E I M L D D IT IA UC UN Y LO IC A A TI G T UE O IO N N O /S PE P N O RT TO SO S W O CI RK ER ETY SA RE FE LI AB TY IL H IT O Y UR AN S D TR US T W AG ES

SOCIAL 2.2.2.2 CITIZEN EXPECTATIONS THE ATTRIBUTES OF A GOOD COMPANY

60%

50%

40%

30%

MARKET RS

20%

10%

Source: ForÃ©tica Report 2015

SOCIAL

2.2.2.2 CITIZEN EXPECTATIONS

At present, as this report indicates, the degree of penetration of Social Responsibility in citizens, i.e. recognition by the person interviewed of the term social responsibility without a prior explanation is higher than 50%. Along these same lines, the score obtained from “the attributes of a good company” helps us analyse a more popular definition close to what a responsible company means to society. The attributes that individuals identify with a “good company” can be classified into two market and Social Responsibility groups, and the Social Responsibility attributes come first in the first edition of the report. Furthermore, 49.9% of those interviewed indicate to have occasionally or frequently purchased a product due to the good behaviour of the production company, compared with punishment or boycott that 44.6% state to have used at some time. In turn, six out of every ten citizens (59.7%) indicate that, when faced with two products with similar characteristics, they would always by the most responsible, despite it being more expensive, compared with 20% who would only make this decision if the price of the two were the same. Contrary to popular belief, the implementation of Social Responsibility in citizens is not an inexorably growing trend. The impact of the crisis is notable, as can be seen in the number of active and involved consumers, which dropped from 2008 to 2011 and has increased again with the incipient recovery in 2014. There is also a positive relationship between certain macroeconomic variables and the increased degree of involvement by consumers in sustainability.

120

2,5% 2,0%

38,6%

100

1,5% 33,8%

36,2%

28,3%

1,0% 0,5%

DEVELOPMENTS POPULATION COMMITTED

0,0% 40

0,5%

(% Assets + involved)

1,5% 0 I 20 I 09 TI 20 10 TI 20 10 TI II 20 11 T 20 I 11 TI II 20 12 T 20 I 12 TI II 20 13 TI 20 13 TI II 20 14 TI

TI 20

II TI

TI 20

III

07 20

20 0

2,0% 20 0

Source INE e Informe Forética

1,0% 20

CIS - GOVERNMENT/OPPOSITION SYSTEM

CONFIDENCE IN THE ECONOMY

INVOLVED + ACTIVE

GDP

SOCIAL

2.2.2.2 CITIZEN EXPECTATIONS

SEGMENTATION OF THE POPULATION ACCORDING TO THEIR ATTITUDE TOWARDS RESPONSIBLE DRINKING

2006

2008

2010

2014

Active

They know the SR concept, they have a favourable attitude to it and practice responsible, consumption (discrimination of products according to ethical social and environmental aspects).

23,10%

20,50%

21,00%

31,10%

Involved

They have a lesser degree of knowledge of SR, althoygh they have a clearly favourable attitude to it. They practice responsible consumption but to a lesser extent than in the case of those active.

15,50%

13,30%

7,20%

5,10%

Not involved

They tend to consider SR as a business matter. They have not personally acted as a result or show any tendency to do so.

57,10%

59,80%

63,30%

58,80%

They give no importance to corporate social responsability.

4,30%

6,40%

8,40%

5,00%

Unrelated

SOCIAL

2.2.2.2 CITIZEN EXPECTATIONS

DEVELOPMENT COOPERATION According to a recent report by the OECD, a positive aspect to highlight is Spanish Development Cooperation in its use as a tool to favour sustainable development, given that: It promotes cooperation to improve trade in developing countries and their integration into the world economy. Investment is made into improving information and statistics systems so that their efforts in development objectives can be monitored. Funds are devoted to lessen the effects of climate change, underlining access to energy, the promotion of renewable energy, the sustainable management of forests and sustainable tourism. The adaptation of crop diversity and the increase in its strength and resilience is supported.

Social Responsibility and development cooperation support each other mutually, especially when Social Responsibility assumes the contribution towards the Millennium Development Goals and the Sustainable Development Goals and towards other agreements and international pacts as its own, and when Development Cooperation involves companies in the International Development Agenda. In July 2012, the Ministry presented the report titled â&#x20AC;&#x153;The socially responsible company in development cooperationâ&#x20AC;?, which establishes a series of recommendation to effectively link the cooperation system and the private business sector in Spain. An example of this is the application of Social Responsibility criteria so that the Authorities can identify companies with which to work in development cooperation or the promotion of Social Responsibility in Southern countries. As the MDGs show, the best ally for development is to promote inclusive growth policies in developing countries, and although there is still a great deal of work to be done worldwide until the commitment promoted by the United Nations of devoting 0.7% of GDP to development cooperation is reached, great efforts are being made in this direction.

SOCIAL

2.2.2.2 CITIZEN EXPECTATIONS

The AECID (Spanish Cooperation and Development Agency) is the main Cooperation management body in Spain that is involved in sustainable human development and the fight against poverty. To do so, it follows the directives of the 4th Spanish Cooperation Master Plan, in line with the international agenda established by the Millennium Development Goals (MDG). Furthermore, Spain promotes the efficient use of resources for sustainable development, enabling countries to appropriate the aid through collaboration between companies from both countries (provider and recipient of aid) due to the way in which this type of aid is “delivered” and making its aid predictable. Another example of how development cooperation is incorporated into The Social Responsibility Model of Spain is the COFIDES organisation, Compañía Española de Financiación del Desarrollo [the Spanish Development Funding Company], a public company created in 1988 in which the public bodies ICEX, ICO and ENISA have a 53% share and act together with the BBVA, Banco Santander, Banco de Sabadell, Banco Popular and CAF (which control the other 47%). Its aim is to providing medium and long-term funding for feasible private investment projects abroad in which there is a Spanish stakeholding, in order to contribute towards the development of the countries receiving the investments and the internationalisation of the economy and of Spanish companies, all under criteria of profitability.

PROPORTION OF OFFICIAL DEVELOPMENT COOPERATION PER SECTOR, AVERAGE 2012-2013, SPANISH COMMITMENTS

16 Educatión, health and population

Economic infraestructures Other social infrastructures

Production

Multi-sector Support programmes

15 Debt relief

Humanitarian aid

22 Not specified

Source: OCDE

SOCIAL

2.2.2.3 GENERATING OPPORTUNITIES

TRAINING IN SPECIAL SKILLS The most easily identifiable disabilities are physical and sensory-related, although there are other types of less visible but no less important disabilities, such as mental illnesses, brain damage and rare diseases, among others. The disabled are at greater risk of social exclusion, have more difficulties in their day-to-day lives and are more likely to be unemployed. Therefore, in most situations, for the life and work of the disabled to develop correctly, there must be an adaptation between the environment designed for the majority and the disabled individual. More specifically in Spain, there are more than 3.8 million people with some kind of disability, 8.5% of the total population, of whom over 2.5 million have a recognised disability level that is equal to or over 33% (limit for legal recognition of a disability). According to the State Disability Observatory, the risk of poverty affects 32% of the disabled population, which is almost 5 points above the general population. Severe poverty affects around 14.7% of the disabled population, compared with 9.6% of the non-disabled population The environment and institutional support play a very important role in decreasing this gap. The active participation of the institutions is necessary to ensure their rights and practically applied and to ensure equality through different initiatives. In Spain, relevant regulatory measures and public policies have been implemented aimed at guaranteeing equal opportunities and the full exercising of disabled rights. Most noteworthy among the existing national regulations is the General Law for the rights of the disabled and their social inclusion, given that it recognises the disabled as having a series of rights and the public authorities as the guarantors of the actual and effective exercising of these rights, according to the provisions of the Convention. This law merges, clarifies and harmonises in to one text the main laws regarding disabilities that previously existed

http://www.imserso.es/imserso_01/documentacion/estadisticas/bd_estatal_pcd/index.htm

SOCIAL

2.2.2.3 GENERATING OPPORTUNITIES

The institutional framework also includes the 2014 – 2020 Spanish Disability Strategy, established as a benchmark and long-term directive for Spanish public policies regarding disabilities and that is in lie with the European Disability Strategy and the Europe 2020 Strategy. The current 2014 – 2016 Plan of Action, with 96 specific measures and a budget of over 3 billion Euros, completes the institutional framework indicating 5 major goals to be met: 1. To guarantee complete equality of the disabled in the exercising of all of their rights with regards to all other citizens. 2. To promote the right of the disabled to work under conditions that guarantee the application of equal opportunity and non-discriminatory principles. 3. To reduce the rate of school leavers and to increase the number of disabled people in higher education. 4. To promote accessibility to goods and services. 5. To ensure disabled assistance resources form a factor of economic drive.

This stimulation by the public institutions is supported greatly by other leading disabled organisations worldwide, such as ONCE or the Spanish Committee of Representatives of Persons with Disabilities (CERMI). The work of these organisations is essential for promoting and making the social integration of people with special needs visible and for helping in the effective integration of these people. Another of the initiatives most widely recognised due to its link with Social Responsibility are the Telefónica Ability Awards, which seek to publicly recognise the companies and institutions that develop sustainable business models with the inclusion of disabled people in the value creation chain as employees, suppliers and/or customers. These awards seek to honour private and public organisations working in Spain that have improved their business through the implementation of activities with this group of citizens.

SOCIAL

2.2.2.3 GENERATING OPPORTUNITIES

The international vocation of Spain’s commitment towards promoting environments that respect and promote the rights of these groups led it to becoming one of the first countries to sign the United Nations Convention on the Rights of Persons with Disabilities and its Optional Protocol in 2007. Hence, in 2013 Spain was given the Franklin D. Roosevelt International Disability Right, Award, the best distinction that a country can receive in terms of disability, and that seeks to encourage the progress of countries in the area of Human Rights, with special reference to the inclusion of the disabled to ensure the full and equal participation of the disabled in all areas of society.

DISABILITY AND SOLIDARITY Award, the best distinction that a country can receive in terms of disability, and that seeks to encourage the progress of countries in the area of Human Rights, with special reference to the inclusion of the disabled to ensure the full and equal participation of the disabled in all areas of society

The civil society organizations in Spain have placed a decisive role when placing disability as one of the central elements of social responsibility in Europe. Organizations such as ONCE or CERMI (Spanish Committee of Representatives of Disabled Persons) have had a decisive impact on the European agenda, thus completing public efforts in this area. The promotion of ONCE and its Foundations has been essential in obtaining an overview of disability in Social Responsibility, primarily in 3 main areas:

Active policy player. The ONCE Foundation promotes the Network of Corporate Social Responsibility and Disability (CSR+D). This Network promotes sensitisation towards and integration of the disabled in the political and business agendas of Social Responsibility under a collaborative and multi-stakeholder approach in order to encourage the social and labour inclusion of the disabled in Europe while contributing towards the development of the responsible competitiveness of companies and public authorities. Supported by the European Social Fund, it includes companies such as Telefónica (Spain) or L´Oreal (France) and Authorities such as the Italian Ministry of Work and Social Policies as founder members.

SOCIAL

2.2.2.3 GENERATING OPPORTUNITIES

An inclusive labour market. Convinced that employment is an essential factor for social integration, the ONCE Foundation has started the Inserta Programme that collaborates with the Public Authorities, businesses and social agents in the creation of stable jobs for the disabled. This organisation has favoured the creation of 97,000 jobs to date8. Transparency and reporting. Disability in Sustainability Reports is a publication from 2015 produced with Global Reporting Initiative (GRI) in order to create a practical tool that helps organisations public disseminate their commitment towards respecting and promoting the rights of the disabled.

YOUTH ENTREPRENEURSHIP AND EMPLOYMENT Youth unemployment is a structural problem that has worsened with the crisis and jeopardises not only the future of these youngsters but the potential long-term growth of the Spanish economy. As well as the circumstances arising from the current economic situation, there is a set of structural weaknesses that have direct impact on youth unemployment figures, including a high rate of school leavers, short duration of contracts and little relative weight of intermediate level Professional Training. To tackle this problem and reduce current unemployment levels, almost 50% of the population aged between 18 and 25, the Government has launched a 2013-2016 Youth Entrepreneurship and Employment Strategy, in line with the objectives of the European â&#x20AC;&#x153;Youth Guaranteeâ&#x20AC;?. This is an initiative by the Ministry of Employment and Social Security that was approved in February 2013 following a process of dialogue and participation with the social partners to provide a response to the labour situation of many youngsters in Spain, either through employment by others or through self-employment and entrepreneurship.

Further information on Disability and the labour Market in Spain here.

SOCIAL

2.2.2.3 GENERATING OPPORTUNITIES

The objectives of the Youth Entrepreneurship and Employment Strategy are as follows:

1. To help improve the employability of youngsters

2. To increase the quality and stability of youth employment

3. To promote equal opportunities

4. To encourage the enterprising spirit

The Strategy includes 100 measures, 15 of which are short-term shock or impact measures and 85 are long-term. Interested organisations can join the Strategy and the Authorities will assess each case and will grant the possibility of using the â&#x20AC;&#x153;member companyâ&#x20AC;? stamp for the strategy, in exchange for updating the state of implementation of the proposed measures at least every year. The Ministry of Employment and Social Security may also grant special recognition to any specific organisations or initiatives that, due to their repercussions, innovation or efforts, are especially significant in meeting the objectives of the Strategy. At present, over 950 companies have joined the initiative. The perspective of the promotion of youth employment also includes the promotion of Dual Training, aimed at encouraging the employment and training of youngsters in a system that alternates remunerated work in a company with training received within the framework of the professional training system for the job or of the educational system. Royal Decree 1529/2012 lays the foundations for the progressive integration of this form of training in Spain, encouraging a single legislative framework to encourage the collaboration and participation of companies in professional training systems, promoting the coming together of companies and professional training centres and encouraging increased employment by students during the training period. Both initiatives are generating very positive impact, as proven by the contract statistics published in February 2015 by the Public National Employment Service, as 85% more work experience contracts were recorded as in the same period of 2013 and 88% more contracts with linked training.

SOCIAL

2.2.2.3 GENERATING OPPORTUNITIES

SUPPLY PERSPECTIVE

DEMAND PERSPECTIVE

EDUCATION

STIMULATION FOR CONTRACTS

TRAINING IMPROVEMENT OF LANGUAGE KNOWLEDGE AND THE HANDLING OF TECHNOLOGICAL TOOLS

Lines of Action of the Strategy

JOB FLEXIBILITY PUBLIC-PRIVATE COLLABORATION IN THE SEARCH FOR WORK

PROMOTION OF ENTREPRENEURSHIP AND SELF EMPLOYMENT

EQUAL OPPORTUNITIES

INSTITUTIONAL PERSPECTIVE MANAGEMENT OF THE PUBLIC AUTHORITIES GUIDANCE AND SUPPORT

SOCIAL

2.2.2.3 GENERATING OPPORTUNITIES

FROM CSR TO USR University interest in social responsible can be seen in the heart of the institutions and in the forums, networks and associations of which they form part. However, social responsibility has not only been transferred to the management of universities but to the training they offer. Many different centres and business schools have masters and courses specialising in CSR, such as the IESE Business School, ICADE, ESADE, the Instituto de Empresa, the Universidad Complutense or the EOI. Furthermore, in some cases the companies themselves promote CSR Lectures, such as Santander, Inditex, La Caixa or Telefรณnica.

SOCIAL ECONOMY The Social Economy is yet another example of how business efficiency and competitiveness can coexist perfectly with Social Responsibility, social cohesion and solidarity. The future business leaders trained in Social Responsibility and sustainability will include ESG risk and opportunity management at the highest strategic level of companies.

The principles behind this production system that are so characteristics of The Social Responsibility Model of Spain are: the precedence of people and corporate purpose over capital, which is specified by autonomous and transparent, democratic and participative management, which prioritises decision-making rather more according to people and their contributions to work and services provided to the organisation or according to the corporate purpose than in relation to their contributions to capital stock. Application of the results obtained from the economic activity primarily according to the work provided and service or activity performed by its partners or by its members and, where applicable, for the corporate purpose of the organisation. Promotion of in-house solidarity and solidarity with companies favouring commitment towards local development, equal opportunities between men and women, social cohesion, the insertion of persons at risk of social exclusion, the generation of stable, quality employment, the work-life balance and sustainability. Independence regarding the public authorities.

SOCIAL

2.2.2.3 GENERATING OPPORTUNITIES

These production models are developed in response to faults or inequalities in the market economy system and generate new business models such as cooperatives, mutual benefit societies, special employment centres or social insertion companies. At present, the social economy in Spain covers over 44000 companies with a turnover of over €150 billion, almost 12.5% of the country’s GDP. These production models currently enjoy special protection by the public authorities and are especially regulated by an avant-garde law in its fields, the Social Economy Act 5/2011 of 29 March, that seeks the recognition, visibility and development of the sector.

The Spanish Business Confederation of Social Economy (CEPES): It represents the interests of+ de 44.000 business They account for 12.5% of GDP + Bill of € 150,000 million 2.2 million jobs (12.8% of total) Benefiting more than 16.5 million people indirectly Companies> 250 workers have increased 10% since 2007 Companies> 5 years increased by 8% since 2007

SOCIAL

2.2.2.3 GENERATING OPPORTUNITIES

The 31/2015 Act of 9 September, that amends and updates regulations regarding self-employment and adopts measures to stimulate and promote self-employed work and the Social Economy. In order to streamline the incorporation of new members to the organisations forming part of the Social Economy, the Law extends the allowances to include all age brackets. It also recognises Special Employment Centres and Insertion Companies as service providers of general economic interest, which will mean that the subsidies they can receive may be increased. Furthermore, the Law also introduces the participation of insertion companies in contract tender procedures with reserved participation in the public sector (market reserve), something that until now was limited to the Special Employment Centres. Great efforts are being made by the Ministry of Employment and Social Security, especially the Directorate General for Self-Employed Work Economy from different levels, such as the 2015-2016 Social Economy Stimulation and Promotion Programme with four priority areas:

Promoting the creation and strengthening of social economy organisations with financial support instruments for the incorporation of partners into cooperatives and employee-own

Reviewing and updating the legal framework of the organisations forming the social economy for greater legal security

Supporting internationalisation and innovation, to improve their competitiveness and for their launch into new markets

Promoting the European Agenda, where the first Operational Programme for Social Inclusion and the Social Economy will be started, funded by a total investment of almost 1.1 billion Eur

SOCIAL

2.2.2.3 GENERATING OPPORTUNITIES

The Directorate also has a line of subsidies that provide direct support for initiatives and projects involving the social economy each year. The business response is channelled globally through the Spanish Business Confederation of the Social Economy(CEPES), formed in 1992 and the nationwide business confederation that represents the Social Economy in Spain, forming a platform of institutional dialogue with the public authorities. This organisation works on the relationship between Social Responsibility and the social economy and, along these lines, the â&#x20AC;&#x153;CEPES Manifesto regarding Social Responsibilityâ&#x20AC;?, is especially relevant and consolidates its vision of Social Responsibility and indicates the way for social economy companies to adopt Social Responsibility as an organisational model. The manifesto also indicates the need to establish indicators and methodologies to measure and communicate the impact of Social Responsibility activities. The social economy currently provides around 2.2 million jobs (around 12.8% of the total) and indirectly benefits more than 16.5 million people. The promotional policies supported by the Public Authorities are taking effect and there is an increasing number of social companies. Not only have more companies been created (since 2007 the 250-plus workers have increased by 10%), but also the number of consolidated companies established more than 5 years ago, which has also increased by over 8%.

THE THREE DIMENSIONS 2.2.3 GOVERNANCE

PROMOTION AND SIMULATION OF SR

SR Strategy

Sustainable Economy Act

Sustainability in public procurement

Leadership, coordination and deployment of resources to promote SR are essential in reaching a structure SR model nationwide.

INTEGRITY AND FIGHT AGAINST CORRUPTION

Transparency Act

Gobernance

Sustainability in public procurement

Reinforce transparency, governance and the fight against corruption are essential in strengthening the trust of our institutions and companies. .

BUSINESS LEADERSHIP

Policies and management tools

Reporting and accounting

International reputation

Having exemplary and innovative companies in terms of SR generates a virtuous and progressive cycle for a socially responsible production network.

BEGINNING

IL I T

VOL

O I TI

2.2.3.1 PROMOTION AND STIMULATION OF SOCIAL RESPONSABILITY

SOCIAL RESPONSABILITY STRATEGY

VAL UE SH CRE AR E

NSPARENC TRA Y

IAL COHESI ON SOC

NESS IVE TIT E P M

N IO AT D

GOVERNANCE

The Directorate General for Self-Employed Work, Social Economy and Corporate Social Responsibility, answerable to the Ministry of Employment and Social Security, is the public body responsible for managing the preparation and promotion of regulatory projects, Social Responsibility promotion - especially in small and medium-sized enterprises - and the design, management and monitoring of programmes and aid for the diffusion and promotion of Social Responsibility, among others. Its greatest challenge is to promote a system that, from the public sector and at legislative level, structures The Social Responsibility Model of Spain as leverage for the other two main players: civil society and companies. A great advance has been the launch of the CSR Strategy. Based on 6 principles, 4 objectives are established and 10 lines of action proposed over a time frame up to 2020. These principles, which are listed below, are reflected in the public and private sectors and establish a short and long-term framework to generate paths to improvement in both types of institution

STRATEGIC OBJETIVES Stimulate and promote SR in Spain

Lines of action 1. Promotion of SR as a driving force for more sustainable organisations 2. Integration of SR into education, training and research

Identify and promote SR as an attribute for competitiveness, sustainability and social cohesion

3. Governance and transparency as instruments to increase trust 4. Responsible management of human resources and promotion of employment 5. Socially responsible investment and R&D+i 6. Relationship with suppliers

Disseminate the values of SR in society as a whole Create a framework of common reference for the entire country in terms of SR

7. Responsible consumption 8. Environmental respect 9. Development cooperation 10. Coordination and participation 80

2.2.3.1 PROMOTION AND STIMULATION OF SOCIAL RESPONSABILITY

GOVERNANCE

Competitiveness and sustainability, two key attributes for the development of a country, they have a direct and positive relationship. This phenomenon can be seen in Figure xx, in which the competitiveness index prepared each year by the World Economic Forum (WEF) is crossed with that analysing the situation of each country in terms of sustainability. This indicates that the more efforts invested in improving the sustainability of a country and its companies, the more advantages will be obtained in terms of competitiveness and vice versa. Social cohesion: there is a two-way relationship of dependence between it and the company. The impact of the company on the labour market in terms of training or job creation is essential to decrease the exclusion suffered by a sector of the Spanish population. Furthermore, a cohesive and inclusive society generates greater productivity and growth. Creation of shared value: the business case of Social Responsibility includes this principle perfectly. Whereas Social Responsibility helps strengthen company strategy and positioning, society is benefited by these practices while rewarding those performing them. Transparency: according to GDP growth estimates by the International Monetary Fund, the advanced economies will grow between 2.3 and 2.4% a year from 2015 to 2019. If the 10 countries with best institutions and least corruption according to the World Economic Forum are selected, these will experience a higher growth on average of between 2.7 and 3% a year over the same period. Volunteering: above all, note that the implementation of Social Responsibility in organisations in voluntary, requires commitment and provides added value to compliance with current regulation.

Sustainability and Competitives Link % Sustentibility percentile

Source: World Economic Fundico Mundial

100 80 y=0,7932x + 0,1946 R2= 0,9489

60 40 20

Spain

100

% Competitiveness percentile 81

2.2.3.1 PROMOTION AND STIMULATION OF SOCIAL RESPONSABILITY

GOVERNANCE

GDP growth estimates

Ge. You advanced

2,3

2,4

2,3

Ge.You advanced

2,3

2,4

2,3

Ge. Best institutions

2,9

3,0

2,9

Ge. Less corrupt

2,8

2,9

2,8

2,7

2018

2019

2018

2019

Best institutions

2015 2016 2017

Corruption

2015 2016 2017

New Zealand

2,8

2,5

New Zealand

2,8

2,5

Finland

0,9

1,6

1,7

1,8

Singapore

3,0

3,1

Singaporer

3,0

3,1

Qatar

7,7

7,8

6,6

5,7

5,3

Qatar

7,7

7,8

6,6

5,7

5,3

Finland

0,9

1,6

1,7

1,8

Norway

1,9

2,0

2,1

U. Arab Emirates.

4,5

4,4

4,5

4,6

Luxembourg

1,9

2,1

2,2

Norway

1,9

2,0

2,1

U. Arab Emirates

4,5

4,4

4,5

4,6

Luxembourg

1,9

2,1

2,2

Hong Kong

3,3

3,5

3,7

3,8

Switzerland

1,6

2,0

1,8

Switzerland

1,6

2,0

1,8

Denmark

1,8

1,9

2,0

Holland

1,4

1,6

1,7

1,9

2,0

Holland

1,4

1,6

1,7

1,9

2,0

Source: International Monetary Fund and World Economic Forum

GOVERNANCE

2.2.3.1 PROMOTION AND STIMULATION OF SOCIAL RESPONSABILITY

The CSR Strategy is implemented, among other tools, over a series of aid that is called every year by the Directorate General for Self-Employed Work, the Social Economy and Corporate Social Responsibilities. These are subsidies for activities promoting self-employed work, the social economy and social responsibility to pay for the operating expenses of associations of self-employed workers, cooperatives, employee-owned companies insertion companies and other bodies representing the social economy nationwide. Their aim is to contribute towards the funding of expenses arising from activities to support and promote these organisations and the partial funding of their operational expenses to ensure their purposes are met. Since 2012, over 8 million Euros has been granted9 in direct aid for training programmes, promotion and diffusion of Social Responsibility in this type of announcement promoted by the current Ministry of Employment and Social Security. This type of aid is not only granted by the Central Authorities but also by the Autonomous Communities who play a significant role in its promotion. An example of this is the case of Extremadura, which has implemented a line of aid to encourage the contracting of specialists to diagnose and integrate social responsibility into companies and, therefore, promote â&#x20AC;&#x153;innovativeâ&#x20AC;? projects and activities in small and medium-sized enterprises. The initiatives promoted by the Government are not only in the form of aid but also in the general promotion of Social Responsibility. Challenges this is a national network led by the Ministry of Employment and Social Security through the Directorate General for Self-Employed Work, the Social Economy and Social Responsibility. It is formed by local regions (municipalities, provinces, consortiums) in a network, the mission of which is to structure, integrate and implement different strategies for the development of Socially Responsible Regions that improve the quality of life of their inhabitants.

Amount calculated for the 2012, 2013, 2014 y 2015 announcements and only exclusively counting the lines of action specifically linked to CRS.

GOVERNANCE

2.2.3.1 PROMOTION AND STIMULATION OF SOCIAL RESPONSABILITY

Alongside this, on an autonomous community level, almost all Autonomous Communities have developed initiatives to promote SOCIAL RESPONSIBILITY, including: the approval of the Corporate Social Responsibility (Act of Extremadura), the construction of the Cantabria Responsable and Xunta de Galicia portals, the Castilla y León Corporate Social Responsibility Plan and the Regional strategy of Murcia for encouraging Corporate Social Responsibility, or the Navarra Innovarse Management System, among others. The existence of a network of independent organisations who generate knowledge and trends promotes the Social Responsibility SOCIAL RESPONSIBILITY agenda between the business network and the Authorities

SOCIAL RESPONSIBILITY FROM THE TERTIARY SECTOR From the viewpoint of the private sector, there are many different tertiary sector organisations seeking to promote sustainability and stimulate the ethics management culture nationwide. In their work supporting and recognising the efforts that companies make in the field of Social Responsibility, they generate reports on different subjects, include international trends and organise awards and events.

COMUNICANDO RS

Having an informed public opinion on the work performed regarding Social Responsibility promotes the building of a more aware, responsible society

In Spain there are specialist media that seek to disseminate best practices, behavior and impacts of the activities of companies in terms of Social Responsibility in order to generate social awareness and public opinion on its importance. The following agents given in alphabetic order are most noteworthy at present: Compromiso Empresarial, Compromiso RSE, Diario Responsable, Ethic, Forum Calidad and MediaResponsable. Furthermore, the news agencies also include specific sections on SOCIAL RESPONSIBILITY, such as Europa Press, Servimedia, Efe or Bloomberg. The subject is also covered by economic media such as Expansión and Cinco Días, as well as general media - particularly in specials - such as El País, El Mundo or La Razón, among others.

2.2.3.1 PROMOTION AND STIMULATION OF SOCIAL RESPONSABILITY

GOVERNANCE

Observatory CSR

SPAINSIF

Ecology and Development Foundation

EBEN

ETNOR

1987

1991

Covenant network World Spain

Club of Excellence Sustainability

Foundation SERES DIRSE

Forética

1993

1999

2002

2004

2009

2013

In the study ‘‘Social Responsibility in the media, the challenge of communicating in a more interactive way’’, it is confirmed that on-line environments are progressively replacing the paper media and there are currently 75 times more than the latter. Given that, in 2014, there were 1,408 hits in the written press -bearing in mind key words such as corporate social responsibility or its initials Social Responsibility, using the “number of on-line news articles/number of paper news articles” it is possible to estimate that there were almost 300 on-line hits every day during that same year.

SUSTAINABLE ECONOMY ACT

The Social Economy Act 5/2011 of 29 March is a tool that has enabled the rhetoric of Social Responsibility to be included in both companies and public sector organisations. This act establishes the approach of the Authorities with regards to what can be considered sustainable economy: “… a standard of growth that balances economic, social and environmental development in a productive and competitive economy, that favours quality employment, equal opportunities and social cohesion and that guarantees respect for the environment and the rational use of natural resources in such a way that meets the needs of the present generations without jeopardising the possibilities of future generations to meet their own needs”. The Act sought to introduce the necessary structural reforms into the legal system to create conditions favouring sustainable economic development. The main issues discussed in the scope of this act are:

Improvement of the economic environment (regulatory quality, financial markets, sustainability of the public sector, Social Responsibility, etc.) Competitiveness (administrative simplification, science and innovation, internationalisation, etc.) Environmental sustainability (sustainable energy model, reduction of emissions, sustainable mobility, etc.)

This Act was the starting point of the new approach reflected in the Spanish Social Responsibility Strategy. 85

GOVERNANCE

2.2.3.1 PROMOTION AND ENCOURAGEMENT OF THE RS

SUSTAINABILITY OF PUBLIC PROCUREMENT Spain is the 4th largest producer of G4 reports globally

t it!

Public procurement is a potential for facilitating changes in non-sustainable production and consumption models. From this perspective, the European Union has encouraged the implementation of sustainable procurement and tender policies since the start of the 21st Century. For the first time in 2003, the EU included the recommendation to establish Green Public Procurement Action Plans by the Member States and in 2004 it implemented two European Directives for the integration of environmental criteria in public procurement. The latest directives by the European Parliament that update the criteria for awarding public tenders establish the need to seek a balance between economic efficiency and the promotion of social and environmental objectives, i.e. the preponderance of the concept “most economically advantageous tender” or “best price/quality ratio” with the inclusion of social, environmental and innovation-related aspects and the cost calculation of the life cycle. On a national level, the incorporation of the first Directives produced the Public Sector Tender Act (LCSP) 30/2007 and the 31/2007 Act on procurement procedures in the water, energy, transport and postal services sector. At the time of going to print, these remain valid while the recently published laws are transposed by a task force assigned to the Under-Secretariat for the Inland Revenue and Public Authorities.

The Spanish stock exchange is among the ten most sustainable markets worldwide in 2015

i et

twe

The Green Public Procurement Plan published in 2008 primarily seeks to implement environmentfriendly practices in public procurement. It establishes the conditions in which the awarding authorities can introduce environmental and social requirements into the different phases of the public tender and establish specific objectives for the groups of products and services prioritised by the European Commission, including construction and maintenance, transport, energy, office equipment, paper and publications, furniture, cleaning and events. The Preliminary Draft of the new LCSP seeks to design and implement a new public procurement system that is more efficient, transparent and comprehensive and ensure that public procurement is used as an instrument to implement European and national policies regarding social, environmental, innovation and development and SME promotion issues.

GOVERNANCE

2.2.3.1 PROMOTION AND ENCOURAGEMENT OF THE RS

Moreover, through Royal Decree 163/2014, the Carbon footprint register, carbon offsetting and carbon dioxide absorption projects has been created to include the carbon footprint as a criterion of public procurement. Other measures implemented, such as the development of the Procurement Platform of the Ministry of Health, Social Services and Equalit that, apart from offering great savings for member Autonomous Communities by generating economies of scale and synergies, means the putting into practice of a framework and conditions for public procurement that are favourable to the increased sustainability of public tenders.

Spain is the sixth country with highest adoption of quality and environment management certifications

The 2nd general Report on the state of green public procurement in the General Public Authorities, its public bodies and the management organisations of the social security, published in June 2015, provides a detailed review of the advances made and those currently being implemented. The promotion of green public tenders may be decisive in the increase of sustainability nationwide, given that over 10% of GDP is managed by the Authorities in procurements and tenders.

SECTOR t!

i et

twe

STATUS

Construction and maintenance

VERYWIDESPREADTOTALIMPLEMENTATION

Transport

WIDESPREAD IMPLEMENTATION

Office equipment

MODERATE IMPLEMENTATION

Paper and publications

MODERATE - LOW IMPLMENTATION

Cleaning products and services Furniture Events Energy and other activities

INCIPIENTE IMPLEMENTATION NO IMPLMENTATION

Source: II GENERAL REPORT ON THE GREEN PROCUREMENT IN THE AGE, THEIR PUBLIC AND MANAGING BODIES THE SS

Government at a Glance, OECD 2015.

GOVERNANCE

2.2.3.2 INTEGRITY AND FIGHT AGAINST CORRUPTION

TRANSPARENCY The importance of transparency has been growing in recent years.. Two trends have promoted this. The development of new technologies that, on one hand, facilitate accessibility, ubiquity and permanence of information, making any error very difficult to delete. On the other, the serious economic crisis in all of its areas, which has shown a growing interdependence among economy, politics, international relations and natural resources. From a mere risk management viewpoint, transparency has great value in itself. Not only this, on a public level it also has a legitimating effect that generates great doses of trust and development. Spain is a country in which the perception of corruption levels has increased over recent years, as can be seek in the international transparency index. However, it is in the first percentile of its Corruption perception index in position 37, together with countries such as Denmark or Germany. The Public Authorities, in response to this growing sensitivity of the civil society and the population, has strengthened its commitment with such noteworthy initiatives as the 19/2013 Act of 9 December, on Transparency, Access to Public Information and Governance. This Act seeks to expand on and reinforce the transparency of the public activity, regulate and guarantee the right to access information and establish obligations of governance that must be met by the public authorities. The Law applies to all Public authorities and to the entire public sector, as well as to other institutions such as the Royal Household, the General Council of the Judiciary, the Constitutional Court, the Congress of Deputies, the Senate, the Bank of Spain, the Ombudsman, the Court of Auditors, the Economic and Social Council and similar autonomous institutions, in relation to activities subject to Administrative Law. The Law establishes the publication obligations involving public bodies to ensure transparency in their activity and regulates the right of citizens to access public information.

GOVERNANCE

2.2.3.2 INTEGRITY AND FIGHT AGAINST CORRUPTIONw

It is important to note the additional efforts of some of these authorities with regards to the transparency of their internal social responsibility. Hence, the General Public Authorities have published sustainability reports over recent years. Also of note is the fact that the Law has created a body of reference on the matter, the Transparency and Governance Council, which has the following duties, among others:

1. To adopt recommendations for better compliance with the obligations contained in the Law and assess their level of compliance.

2. To advise on transparency, access to public information and governance.

3. To bindingly inform of state regulatory projects implementing the Law.

4. To promote the preparation of draft recommendations and directives, training and sensitisation.

GOVERNANCE The little over 150 listed Spanish companies (not including SICAVs) represent 0.1% of all Spanish public limited companies, but account for the value of 40% of the total market and their capitalisation is equivalent to almost 70% of GDP, with 63% of their turnover coming from outside Spain. Furthermore, 8 of them are present on the Fortune 500, the index measuring the largest companies in terms of revenues in the world. Highlighting governance in organisations is a strategy of great potential to strengthen the competitive position of Spain. An exercise of analysis published in the Marca EspaĂąa Report indicates that companies with the highest quality in corporate governance generate greater value from a financial viewpoint. The application of social and environmental valuation factors enhance the analysis of organisations and tend to reduce the risks and improve the business results. Therefore, Spain has a legislative infrastructure that is increasingly aimed at consolidating governance as a relevant tendency in a more participative, transparent and democratic model of society. As well as the Transparency Act, the recently approved Code of Governance for Listed Companies, by the National Securities Market Commission must be noted for its great importance and relevance.

GOVERNANCE

2.2.3.2 CORPORATE CRIMINAL RESPONSIBILITY

incremental profitability

Optimal Corporate Governance

5% Optimum ASG

3% Optimum Environmental

1% -1%

-4%

-2%

Sesgo 0% ASG

Neutral

Social optimum

-3% -5%

Incremental volatility

Source: Foretica Report 2015

The CNMV Model of Governance included in 63 recommendations (under the comply or explain principle) is in line with the most demanding governance levels at both European and world levels, forming a very favourable framework for implementing governance in Spanish companies. It is also the first Code of its nature that includes a series of aspects directly related to the inclusion and integration of Social Responsibility in the governing bodies of listed companies. It therefore becomes a unique reference on the subject and, anticipates future lines of development that include raising the level of Social Responsibility to the most senior decision-making bodies of companies. Especially relevant due to their contents are the Principle 24 and Recommendations 53, 54 and 55 relating to the integration of Social Responsibility in Boards of Directors: Principle 24: The company will promote a suitable policy of corporate social responsibility as a non-delegable power of the board of directors, transparently offering sufficient information on its implementation, application and results. Recommendation 53: Supervising compliance with the rules of governance, of the internal codes of conduct and of the corporate social responsibility policy should be allocated to one or is distributed among several committees of the board of directors. Recommendation 54: The corporate social responsibility policy should include the principles and commitments that the company assumes voluntarily in its relationship with the different stakeholders (â&#x20AC;Ś)

â&#x20AC;&#x153;Establishing new frontiers in Social Responsibility for listed companiesâ&#x20AC;?

Recommendation 55: In a separate document or in the management report, the company should inform of matters relating to corporate social responsibility, using any internationally-accepted methodology.

GOVERNANCE

2.2.3.2 CORPORATE CRIMINAL RESPONSIBILITY

CORPORATE CRIMINAL LIABILITY The criminal responsibility of legal entities, together with the transparency and governance mechanisms, define the new era of compliance in Spain that is to be promoted from the public institutions. Under this new model of compliance, adopting mechanisms and tools that allow for a greater level of control and management of legal risks in companies is essential. These legal compliance mechanisms must seek to detect and prevent criminal conduct in the organisation while lessening any risks regarding the committing of crimes by its employees/directors that could be transferred to the legal entity. In practical terms, the internal mechanisms range from general company policies (that must consider the legal risk map of the organisation) to specific measures such as the implementation of certain controls, training and employee sensitisation. Especially relevant in these cases are the speak-up systems, internal protocols that enable employees or other stakeholders to take complaints, claims and suggestions to the management so that the necessary measures can be adopted. One of the most relevant recent milestones on the subject has been the approval of the 1/2015 Act of 30 March, amending the Criminal Code Act 10/1995 of 23 November. Thanks to this amendment of the Criminal Code, certain exemptions in the criminal responsibility of companies are permitted, i.e. the event of offences committed by those holding organisational or controlling powers or by directors, or by employees answerable to them. The exemptions may only be activated in cases where the company, prior to the committing of the offence, has effectively adopted organisation and management models that include surveillance and control measures to prevent crimes, i.e. effective compliance systems. This Law, applicable to all types of company regardless of its size and turnover, has meant that the implementation of compliance systems or speak-up systems have grown exponentially. However, beyond the compliance systems highlighted in criminal prevention, it is important to note that Spain was one of the first countries to adapt the ISO 19600 on Compliance Management Systems (CMS) to the national standardisation model, which led to the UNE-ISO 19600:2015 establishing the internationally-recognised directives to structure a function of compliance or improve a model on a specific area of compliance.

GOVERNANCE

2.2.3.3 BUSINESS LEADERSHIP

Some of the most relevant Spanish companies are world leaders in sustainability. Proof of this leadership is the index published by the fourth year running by Corporate Knights: “Measuring Sustainability Disclosure. Ranking the World’s Stock Exchanges 2015”. This analyses the sustainability of 45 world stock exchanges depending on the degree of disclosure of the corporate information on listed companies - corresponding to a bank of seven indicators based on GRI methodology (employee rotation, consumption of energy, GG emissions, injury rate, salaries, waste and water). Despite losing positions in relation to 2013, a year in which BME Bolsas y Mercados Españoles was the most sustainable according to this same study, in 2015 it remained among the top ten markets in terms of ESG. However, using the classification granted by the Corporate Knights study and the average ESG score by Bloomberg11 (also mentioned in the study), the Spanish exchange rises to third place, equalling the Euronext Paris Index.

Stock Exchange

Capital Knights Position

Capital Knights score

Average Bloomberg Average ESG score score

Helsinki Stock Exchange

89,1

49,2

69,2

Euronext Amsterdam

85,5

41,6

63,6

Euronext Paris

72,9

49,1

61,0

BME Spanish Exchanges

61,0

Oslo Stock Exchange

71,9

43,9

57,9

Copenhagen Stock Exchange

75,6

40,1

57,9

Australian Securities Exchange

73,6

41,5

57,6

Stockholm Stock Exchange

70,4

44,1

57,3

BM&FBOVESPA

55,4

57,4

56,4

73,2

37,4

55,3

10 London Stock Exchange

Source: Corporate Knights 11

Bloomberg is a company that offers financial services including the ESG analysis of listed companies

GOVERNANCE

2.2.3.3 BUSINESS LEADERSHIP

Furthermore, management systems provide companies with a framework in which to work more efficiently and structurally, which involves establishing internal policies, targets and procedures, improving employee training and the monitoring and traceability of the work completed, encouraging the achieving of excellence. Spain is the sixth country with most certified management systems in terms of quality and the environment (ISO 9001 and ISO 14001) and third in proportion to its GDP, which help ensure that the “Made in Spain” brand product is seen as being more sustainable and competitive by consumers and businesses. In terms of Social Responsibility there is the SGE 21 certification standard in Spain that establishes the requirements to be met to integrate social responsibility into the strategy and management of organisations. This standard, created by Forética in the year 2000, already includes 112 certified companies. The central and regional authorities are one of the main promoters of company certification, as the certificates are taken into account when prioritising one company over another in tenders and contracts for the procurement of goods and services.

Number of companies certified in SGE 21

112 91

66 73

11299

BIG

810

1012

20 12

22 20

BIG COMPANY COMPANY

0 1 1 5 7 8 089 009 10 6 3 4 2 1 312 413 5 14 00 10 1021 010 10 000 0020 0300 0400 05 00 06 00 1 07 00 0 000 0 0011 2 0 0 0 0 0 0 0 0 0 0 0 2 2 2 2 2 2 2 2 2 2 2 22 202 2 2 202 2 2 2 2 2 2 2 2 2 2 2

SMEs