Responsible investment in Tunisia

This chapter provides an overview of the Tunisian responsible investment (RI) market with regard to the three RI strategies: ESG screening, shareholder engagement and impact investing. Our main findings can be summarized as follow. First, the Tunisian RI market is very small, in particular with regards to ESG screening and shareholder engagement. Impact investing, in particular microfinance, is more developed in terms of market development and regulatory framework. Second, institutional investors seem to have limited involvement in the Tunisian RI market. Moreover, shareholder engagement is very limited, and this characteristic seems to be common in the MENA region. Finally, the new Tunisian constitution, ratified in January 2014, integrates explicitly ESG issues. This integration coupled with a more active civil society provides a solid basis for more implementation of ESG issues and the growth of the RI market. However, the main challenge for the Tunisian RI market is to encourage institutional investors (local and foreign) to become active investors by integrating ESG issues into their investment decision-making and ownership practices in Tunisian firms. This could be achieved by increasing the financial and fiscal incentives in the Tunisian investment incentives code as well as an improved regulatory framework regarding shareholder activism.