Sustainable finance and environmental indices: what are they?

Today's economic system is undergoing a transition: traditional capitalism, based on profit generation, is evolving towards a responsible capitalism, founded on the idea of generating value for all stakeholders. Thanks to this paradigm shift, finance is also changing its appearance. Indeed, there is more and more talk of sustainable finance, which is fundamental for enterprises that decide to embark on a path of sustainability. Investors' interest in ESG factors has grown greatly in recent years. The Global Sustainable Investment Alliance estimates that in 2020, the sustainable investment market amounted to approximately USD 35 trillion across North America, Oceania, Japan and Europe, and it is estimated that by 2025, one out of every three dollars will be invested according to environmental, social and governance criteria globally.

Sustainable finance is an approach to money management that aims to create value and generate investment through a strategy that integrates financial analysis with consideration of the environment, social aspects and governance. In this context, regulatory activity by the authorities at the European level has always been very intense and is still being completed. Fundamental to this is the publication of regulations aimed at directing financial operators towards an integration of sustainability risks within their investment and advisory processes in order to foster information transparency towards end customers. Indeed, the European Union wants to reach increasingly ambitious targets and companies have to adapt accordingly. By doing so, they can gain important advantages and the ecological transition represents a winning strategy in this respect.

It is useful now to go and investigate which actors are involved in this transition. Among the key players are first and foremost the businesses, which can find in sustainable finance an important ally to support their ecological transition. It is important to point out that not only large corporations should be interested in implementing ESG strategies for the success of their business, but this change must also be taken into account by small and medium-sized companies, which should not be strangers to the sustainability path. If on the one hand we have the companies, on the other hand we must not forget the citizens, who have the great power to direct their savings towards valuable investments and, on the other hand, an equally great responsibility to manage their own capital in order to become protagonists of the transition as well.

Between companies and citizens there is a further actor, an intermediary: the banks. Banks possess various instruments to direct capital towards virtuous companies and promote sustainable development. From the banks' point of view, there are various indices that assess the ESG performance of companies and that can therefore help financial institutions direct credit towards the most virtuous ones. These include the Dow Jones Sustainability Index, which evaluates the sustainability performance of thousands of listed companies according to economic, ethical, governance, social and environmental criteria. Then there is the FTSE4Good, created by the FTSE Group to encourage investment in companies that meet globally recognised standards for social responsibility and is therefore an important benchmark for the creation of ethical portfolios.

What is sustainable finance and what is its role today? What are the financial opportunities for companies that decide to develop a sound ESG strategy? To answer these questions and more, we have launched the project Pillole dall'Oasi - la Digital Academy by 3Bee for Sustainability Professionals, realised in collaboration with Neutralia and Italian Tech Academy. A course composed of 12 modules dedicated to training on topics related to business sustainability, with the involvement of 23 experts from the world of research, innovation, business and finance. An opportunity not only for training, but to join an exclusive community to receive monthly updates on news from the world of sustainability. Do you want to make your commitment to protecting the environment tangible and ensure the best training for your employees?