Are Spanish ethical companies really ethical?

Abstract

Ethical behavior of large companies has become a key issue for the public. As a result, concerndsinvestorsprefer investing in companies that have an ethical and social responsible behavior. In this context, ethical investment funds can be a proper solution, as they only invest in firms which comply with certain requirements. This research analyses which conditions must be met in Spain in order to be defined as “ethical company”. Then, we check whether the companies included in the IBEX-35 index can be defined as “ethical following the ususal standards”. Next, we introduce a new criteria to identify non ethicalcompanies: those which do not comply with the European legislation on competition. The result of the study shows that many compnies which do not comply with this specific legislation can nevertheless be included in ethical funds’ portfolios. This fact reflects the gap between what is defined as ethical by investment funds and what is perceived as ethical by the public.