Economy

Italy’s sustainable investment market comes of age

Published

11 years ago

November 15, 2013

Contributor

Italy’s second Sustainable and Responsible Investment (SRI) Week finished on Tuesday in Rome. The last event had its key moment at the end of the day, when the first Sustainable Institutional Investor of the Year Awards ceremony took place.

The award went to Intesa Sanpaolo Group’s pension fund, with special mentions to Etica Sgr, the asset management company launched by the Italian ethical bank, Banca Etica in 2003 – whose client base has grown 25% in 2013 – and Generali Group, one of the biggest insurance and financial group at a global level.

Does this mean that something is finally moving in Italy when it comes to SRI? That’s partly true.

The second SRI week, which was organised by the Italian sustainable investment forum (SIF), Forum per la Finanza Sostenibile, almost had double the number of events compared to the 2012 edition. Meanwhile, a growing number of associations signed the Charter for Sustainable and Responsible Investment that the Italian SIF promoted last year.

Some weeks ago, around 40 members of the Italian parliament begun a parliamentary committee focused on sustainable finance.

However, the Italian SRI retail market is still relatively tiny, at just €2.3 billion of the €108 billion across Europe (according to a recent report by Vigeo). In terms of assets under management, behind Italy you can find Denmark (€0.8 billion) and Spain (€0.1 billion), while the UK increased from €14 billion to €18.2 billion in one year.

The most remarkable gap relates to the number of funds: there are only 12 SRI mutual funds domiciled in Italy. In contrast, France – the leading market in Europe – has 238 and the UK 100. Italy completely disappears when looking at the list of the largest SRI funds in Europe: inside the top 10 is France with six funds, the UK with two, both Germany and the Netherlands with one fund.

When it comes to institutional investors, although some show good or even best practices regarding the integration of SRI criteria in their investment process, and others are used to engaging with companies on environmental, social and governance (ESG) issues, the majority still seem not totally focused on ESG.

Looking at the list of Eurosif member affiliates, for example, as François Passant, executive director of Eurosif, said in Milan, just four out of 65 are Italian (and just two Italian asset management companies have signed the Eurosif SRI Transparency Code).

Aldo Bonati, head of research at ECPI, acknowledged that while the first Italian SRI Stock Index (launched three years ago by ECPI and FTSE) had shown good performance, so far engagement had not been so good.

Kris Douma, head of responsible investment and governance at MN – a big pension administrator in the Netherlands, managing assets of more than €90 billion – spoke in Rome at the final event of SRI Week. He launched an amazing video showing what happens when they attend a listed company’s annual general meeting, and the potential impact sustainable and responsible investors could have.

The Italian public listening to him most likely thought, “What a wonderful world this could be…”.

Andrea di Turi (@andytuit and @SriEvent) is an Italian journalist. He started his professional career in the editorial team of one of the first financial web magazines in Italy. He has chaired SRI meetings in the past and written articles and book chapters about sustainable investment. He also manages the Mondosri blog.