The future of humanity is once again a topic of discussion, even if not yet in the ways and forms that the evident state of emergency would require. Politics, first of all, should seriously question the greatest dangers of our time: on the one hand the climate risk and on the other the social one. However, as happens more and more frequently, also in this case, the economy, for better or worse, does without politics and proceeds autonomously discovering new frontiers.
The most evident risk is undoubtedly the environmental one which mainly manifests itself on the question of the climate emergency and it is in fact precisely on this terrain that the greatest innovations in the financial sphere are found. A recent study carried out on 28 monthly observations shows that in companies with a high environmental reputation, the ratio between price and profit is higher than in companies with a low reputation. The financial markets are starting to be sensitive to environmental problems, seeing greater risks and, therefore, lower profits for companies that operate with a stronger and more negative environmental impact, starting with those that invest in or use energy produced with fossil fuels. The most important example in the world of this "sensitivity" demonstrated by the economy is the Montreal Carbon Pledge.
The initiative, launched in 2014 and aimed at institutional investors from all over the world, requires members to undertake to measure, reduce and report the carbon footprint of their equity investments. By measuring the carbon footprint, investors can compare it with that of international benchmarks to identify priority areas and actions in order to reduce their indirect emissions. Today, more than 120 investors worldwide (Europe, United States, Canada, Australia, Japan, Singapore and South Africa), with over $10.000 trillion in assets under management, signed the Montréal Carbon Pledge and over $100 billion have been engaged in this project. Another example is the birth of green bonds, bond issues to finance investments with a high environmental impact, which represent new tools capable of contributing to the creation of sustainable economic value.
Unlike what happens on the environmental issue, it is difficult to take into due consideration the other great risk of our age. The combination of technological revolution, delocalization of production, reduction of wages referring to less qualified work, inequality and consequent massive migratory flows, produces a social risk of the first magnitude for the existence of all humanity. A risk that has as its first effect the clumsy attempt to give answers through populist practices that promise recourse to an increase in debt aimed at increasing consumption. It is evident how big the problem is and how difficult it is to solve and that the attempts of finance, for example through the establishment of issues to finance better projects with a social impact (social impact bond), albeit an excellent intuition, are still too little.
The challenge before us is immense. The Pontiff, through Laudato Si', with an "integral" reading of our world that keeps environmental and social risk closely connected, has sounded the alarm bell loudly. While waiting for politics, having overcome the century of ideological conflicts, to do its part, companies can and must strongly review their models and their idea of development with a clear choice of environmental and social responsibility. Fortunately, we are not at year zero. At least in the credit system - which is the one we know more directly - the Banche del Territorio represent an example of how those dangers can become a commitment and an opportunity for the creation of sustainable value in the real economy.
All this is possible thanks to the consolidated and recognized ability of these banks to invest in the individual territories as much as they collect there. It is a relationship based on the awareness of the mutual interest that binds the banks to their territories, i.e. from the conviction that the environmental and social well-being of a territory can only have a positive impact also on the economic results of the banks themselves in a reciprocal virtuous process and the budget data being approved by the assemblies these days bear witness to it. In our time and, even more so, in the future, there cannot be a viable economy without a credit system which, by adopting the theme of sustainability, is able to accompany and support it, we are sure of that.
°°° The author is the Secretary General of the National Association of Popular Banks (Assopopolari)
