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A vibrant moment for Sustainable Finance in Italy

Since the beginning of the new year, economic analysts have been starting to drive their thoughts towards the aftermath SARS COV-2 pandemic. The first country in Europe to end all restrictions is the UK, whose government has just announced a feasible “freedom day” to forgive and forget the pandemic restrictions. But, in a way, this thoughts of “regaining” our previous lives are everywhere. Now, looking at the European economy, if ever there has been a specialty whose long-tem strategies had been already put in place before the pandemic commenced, it was certainly Sustainable Finance. Active in the world of Sustainable Finance since 2004, on february the Sustainability Rating Agency Standard Ethics has released its latest “Big Picture” of 2021 [1], thus analysing the efforts made by worldwide companies to comply with international standards on Sustainability, defined by the EU, the UN and the OECD.


Source: Standard Ethics Research Office (2022) Standard Ethics: The Big Picture

The report traces the main trends underlying the Agency’s rated companies, solicited and unsolicited. The subsequent picture made over Italy is promising. In the so called “Country In-Depth Analysis” section, Standard Ethics Research Office has described analytically the biggest five European Markets: the UK, France, Germany, Spain and Italy.[2]


Now, if ever there were a pattern of correlation between the Bel Paese’ economic and sustainability outlook, it could have been selected as a case-study: after having been positively praised by the European Commission for the management of the pandemic, Italy’s sustainability rating was upgraded by Standard Ethics on 13 March 2020 [3]. Before the rating upgrade, Italy successfully issued its first Green Bond Framework [4], it did implement the first instalments of the Next Generation EU Plan [5] and then it presented the National Resilience and Recovery Plan [6]. The perspectives for growth are somehow underway. Overall, not only did the Country show its awareness of the pandemic but it also did find a feasible way to recover after it. Perhaps, driven by the major wager for future generations and growth that the Italian PM Mario Draghi has underlined recently [7].


Source: Standard Ethics Research Office (2022) Standard Ethics: The Big Picture

If then we wanted to delve into the Italian companies, the SE Big Picture still serves such purpose. Looking over italian companies, Standard Ethics analysts portrayed a positive picture; since the majority (i.e. 55%) of the Standard Ethics Italian Index components currently has a Sustainable Grade. Such trend seems to have been drawn in by the Italian Banking industry, representing more than 35% of the Index components, whose trend is prominent: in fact, analysts state that “(…) Today, the industry presents a very advanced level of alignment on Sustainability” and thus that, numbers at hand, considering the Standard Ethics Rating scale (i.e. EEE-; EE+; EE; EE-; E+; E; E-; F), 61% of Italian Banks has a Sustainable Grade. [8]

Considering all of the above, we can easily hypothesise that this is truly a vibrant moment for Sustainable Finance in Italy. The pathway undertaken by Italy cannot go back now.


By Manfredi Morello



References

[1] Standard Ethics Research Office (2022) “Standard Ethics: The Big Picture – Annual Report 2021”. London, 18 February 2022. URL: https://www.standardethics.eu/component/edocman/the-big-picture-annual-report-2021/viewdocument/640?Itemid=0

[2] Standard Ethics – Press Release (2022) “Standard Ethics publishes The Big Picture Annual Report 2021”. London, 19 February 2022. URL: https://www.standardethics.eu/component/edocman/standard-ethics-publishes-the-big-picture-annual-report-2021/viewdocument/641?Itemid=0

[3] Standard Ethics – Press Release (2020) “Standard Ethics stabilizes Italy’s Rating”. London, 13 March 2020. URL: Microsoft Word - PressRelease_Italia_eng_12.03.2020_final (standardethics.eu).

[4] Ministry of Economics and Finance – Republic of Italy (2021) “Btp Green, the new sovereign bond to finance Italy's ecological transition”. URL: https://www.mef.gov.it/en/focus/Btp-Green-the-new-sovereign-bond-to-finance-Italys-ecological-transition-00001/#:~:text=In%20early%202021%20Italy%20entered,in%20the%20European%20Green%20Deal.

[5] European Commission (2021) “NextGenerationEU: European Commission endorses Italy's €191.5 billion recovery and resilience plan”. URL: https://ec.europa.eu/commission/presscorner/detail/en/ip_21_3126

[6] European Parliament (2022) “Italy's National Recovery and Resilience Plan Latest state of play”. URL: https://www.europarl.europa.eu/RegData/etudes/BRIE/2021/698847/EPRS_BRI(2021)698847_EN.pdf

[7] Ansa – Business (2021) “NRRP 'great wager on future generations' says Draghi. We've turned pandemic into chance to overcome inequities”. URL: https://www.ansa.it/english/news/business/2021/12/09/nrrp-great-wager-on-future-generations-says-draghi_2c095443-a96e-4f6f-8691-a72563f6e54a.html

[8] Standard Ethics Research Office (2022) “Standard Ethics: The Big Picture – Annual Report 2021”. London, 18 February 2022, pp.10-13. URL: https://www.standardethics.eu/component/edocman/the-big-picture-annual-report-2021/viewdocument/640?Itemid=0