SMEs and sustainability: the MEF document

The Table for Sustainable Finance, promoted by the Ministry of Economy and Finance (MEF), has drafted an essential document for Italian SMEs. This tool aims to facilitate the production of information on environmental, social and governance impacts (ESG), thus promoting a more effective dialogue with banks on sustainability issues. The objective, as reported in the Press Release issued by the MEF, is 'to foster coordination between institutions and the country's economic system in order to develop and implement sustainable finance strategies and thus mobilise private resources through the capital market at the service of the green and digital transition of the real economy'.

From 24 June to 2 August 2024, the document is in public consultation on the site of the Treasury Department. This includes a reference template for the standardisation of 'Sustainability Reporting from SMEs to Banks' and a detailed methodological guide with annexes. This initiative is crucial for achieving the EU's sustainable development and climate neutrality goals by 2050, requiring a significant commitment from both the financial system and businesses, including SMEs. The latter will have to gradually provide the ESG information related to their activities to banks, investors and large corporations.

The document also mentions that the European Commission invited EFRAG to create a voluntary reporting standard for non-listed SMEs, the Exposure Draft for the voluntary reporting standard for non-listed SMEs (VSME ED), which proposes a European model for SME sustainability, addressing the needs of investors, banks and business partners. This consultation document is complementary to the EFRAG initiative, as it focuses first on the relationship between SMEs and banks and, at the same time, aims to facilitate the standardisation of practices being adopted in Italy.

The document of the MEF lists 45 sustainability indicators divided into five thematic sections: general information, mitigation and adaptation to climate change, environment, social and governance. Each section is designed according to a criterion of proportionality according to company size. Indicators include topics such as the presence of sustainability influencers, turnover from high climate impact sectors, energy consumption, annual emissions, and greenhouse gas emission reduction targets. Indicators also include information on air, water and soil pollution, impact on biodiversity and ecosystems, human rights, freedom of association and Diversity & Inclusion policies. Within the governance and business conduct section, topics such as the ethics code and the system for reporting violations of laws, crimes or cases of corruption and fraud are mentioned.

At the end of 2022, the Ministry of Economy and Finance (MEF) established the 'Sustainable Finance Coordination Table'. This body involves the MEF, the Bank of Italy, Consob, IVASS and COVIP. Its main objective is to mobilise private resources through the capital market to support Italy's green transition, in line with European and international commitments. Through coordination between supervisory authorities and the sharing of best practices, the Table aims to remove obstacles to private investment in sustainability. It provides a forum for meeting and dialogue with various stakeholders, including trade associations, market players and the private sector. The Table is a crucial reference point for promoting sustainable finance and facilitating the transition to a greener and more sustainable economy.