Between 2018 and 2021, the carbon footprint of the shares managed by the Bank of Italy dropped by 60%, to the point of being 37% lower than the reference market index. The portfolio in question is worth 16 billion euros, equal to over 90% of the investments made by Via Nazionale in private securities. The numbers are contained in the first “Report on sustainable investments and climate risks”, published on Tuesday by Bankitalia following the commitment made with the Charter of sustainable investments of 2021.
The central institute - which has been using ESG criteria since 2019 in the management of its non-monetary policy portfolios - also specifies that the same securities are better than the market average also in other respects: carbon intensity (-24%), waste production (-28%), use of electricity (-21%) And of water (-14%). As far as social indicators are concerned, the share of employed women is 7 percentage points higher than the benchmark, while the injury rate is 9% lower.
Government bonds of the Eurozone
However, shares represent a minority of the securities potentially affected by sustainable management, which at the end of 2021 were worth around 210 billion euros. "For the euro area government bonds, which represent a large part of this amount - specifies Bankitalia - sustainability indicators are currently being monitored, but they do not influence investment decisionsfor various reasons". The exceptions are “the green bonds of sovereign issuers in the euro area and supranational institutions, currently amounting to 1,7 billion euro, the weight of which in the Bank's investments is destined to grow over time”.
Market attention for ESG investments
Meanwhile, the attention of the entire market towards sustainable finance is also growing. According to a report by the Global Sustainable Investment Alliance, in 2020 the ESg investments constituted approximately 36% of global assets under management and their value had reached i 35,3 trillion dollars, more than double compared to 2016.
The criteria for determining the sustainability of investments
However, the criteria for determining the sustainability of investments are not always clear and credible. The Bank of Italy pays particular attention to this problem, choosing the path of maximum transparency: “So far the ESG indicators used to guide choices on the portfolios of instruments of private issuers have been historical type (measurements of certain quantities at a previous date) – continues the report – The use of prospective data is in fact complicated by the uncertainties regarding time horizons and the type of indicators, the probability of events and their seriousness. The information on future plans disseminated by companies however, they represent a basis from which to start, characterized by fewer scenario hypotheses”.
The news coming in 2022
From this year, therefore, “investment decisions are also taken into consideration of the decarbonization commitments and business transition plans; a dialogue will also be initiated with the latter to gather information on sustainability strategies and the results achieved so far - concludes the report - Finally, a a thematic investment stock portfolio intended for companies better able to contribute to the ecological transition, to seize the opportunities linked to technological innovations and favor the structural change of the economic system”.
