Savers are betting more and more on sustainable investments, i.e. companies committed to respecting the environment and social values. In 2020, according to a Morningstar report, savers poured over 223 billion in European investment funds dedicated to "sustainable" companies. Almost double from 2019, when subscriptions reached 126 billion. The heritage managed by approximately 3.200 European sustainable funds has thus exceeded the 1.100 billion euros.
“Sustainability is good for the environment but it also rewards virtuous businesses,” he observes George Vittadini, president of the Foundation for Sustainability, which produced a report on sustainable finance. “In ten years the share value of companies committed to sustainability has tripled”.
THEMSCI KLD 400 Social Index, which measures the value of the 400 shares included in the basket, went from 477 at the end of February 2011 to 1.469 as at 26 February 2021 (+300,1%). The index brings together the 400 largest companies with high commitment to sustainability (ESG).
Escalation of sustainable actions
Now a little one is coming green revolution for the investment products and services of banks, funds and insurance companies. From 10 March 2021, in fact, it also enters into force in Italy the European regulation 2019/2088 which introduces a series of obligations in communication to the market and to customers on the "sustainability" of products and services and the related risks.
"It is a decisive step to encourage companies' commitment to sustainability and evaluate the impact of their activities", comments Vittadini.
The EU regulation introduces a new type of risk for financial products to be communicated to customers: sustainability. These are environmental, social or governance (ESG) events that can have a negative impact on the value of your investment.
In line with the push towards digital, the channel chosen by Brussels to inform the public are the websites of financial operators. Intermediaries will have to publish on their website "information about their respective policies on the integration of sustainability risks in their investment decision-making processes".
A similar obligation also arises for those who place financial products or services, who will have to provide, again via the Internet, information on the sustainability risks associated with the consultancy provided.
The EU regulation requires operators to draw up a "declaration" certifying the analysis of the main ones negative effects of investment decisions on sustainability factors.
Another key point concerns the “remuneration policies“. Operators will have to explain on their website how these policies "are consistent with the integration of sustainability risks".
The transparency introduced by the EU regulation then extends to the way in which sustainability risks are integrated into "investment decisions". Operators are also required to publish on their website "the results of the assessment of the probable impacts of sustainability risks on the performance of financial products".
Financial products, in short, from now on will have been X-rayed. In addition to describing the "environmental or social characteristics of the sustainable investment objective", operators will have to indicate "information on the methodologies used to evaluate, measure and monitor the environmental or social characteristics or the impact of sustainable investments”.
