Sustainable finance: priorities and perspectives for growth and development of italian companies (english abstract)

English abstract of Assolombarda's analyzes and recommendations to make the inclusion of sustainability in the strategic lines of each company and its enhancement towards the financial world more effective and pervasive.

The commitment to environmental issues and to sustainability in general has always been the prerogative of Assolombarda which in the last period has paid particular attention to the evolution of Sustainable Finance. Among the various actions, we actively participated in European and national consultations, analyzed opportunities, critical issues, points for improvement, impacts and relevance for the business world. These reflections have been summarized in a document that also contains a series of recommendations addressed to our main stakeholders, with the aim of making the inclusion of sustainability in the strategic lines of each company and its enhancement towards the world more effective and pervasive. financial.

Click here to download the english abstract

Executive summary

In recent years, financial resources and opportunities are increasing at a European and national level for companies wishing to integrate and strengthen sustainability in their business models and corporate strategies, since this is recognised as a strategic driver of success and an incentive of competitive advantage and long-term value creation. This is an important challenge, in which ecological transition also plays a central role. It can provide companies with invaluable references for designing the steps they have to take and defining the investments needed to start and consolidate this process, while at the same time allowing companies to access dedicated funding. To do this a clear set of rules must be defined to enhance and incentivise this approach. To ensure a common regulatory framework and a comprehensive approach, the European Union has launched a regulatory process that has involved the opening of numerous public consultations. Assolombarda has been actively involved in many of these and has expressed its position directly or through Confindustria and Business Europe.

We started from these contributions when drawing up this document. We started with the various technical points and focused on giving these a different and more organic interpretation than might be expected to emerge from the responses to the individual consultations. We analysed the criticalities, points for improvement, impacts and relevance for the business world and, finally, we summarised these considerations in a series of recommendations with the aim of making the inclusion of sustainability in a company's strategic guidelines more effective and pervasive and enhancing its status with the financial sector.

As a final step, we regrouped the points using as a guide the six most important stakeholders for us to reach:

  1. large companies that play a key role as promoters and activators of change. They can do this by showing how they are tackling the legal and market obligations that already apply to them, demonstrating their feasibility and consistency with the company's strategic lines and maintaining or increasing competitive advantages, or by guiding the change through their own supply chains, while maintaining a particular focus on supporting the small and medium-sized enterprises they work with, without presenting the process as rigid and bureaucratic and helping them make the necessary changes and procedures to remain in the supply chain;
  2. SMEs which must be aware of the risks of inaction and should experience this change starting from what they have already done using voluntary certifications, which have introduced the practice of providing tangible evidence of good management policies. In this way they could bring out, formalise in a measurable and communicable way many of the 'seeds of sustainability' they have in their DNA. In addition, they have to integrate aspects where they are less strong or which are missing into their strategies in order to gain a greater advantage over their competitors. Indeed, companies as well as final customers, especially younger generations, are increasingly looking for value over and above cost advantages and, therefore, represent, in economic terms, new market niches to move into;
  3. institutions that have been the main driving force behind sustainable finance in recent years. Their role is still important to ensure that rules are applied uniformly outside Europe, so that they do not become competitive 'disadvantages' for our companies. Moreover, they should not stop at the theoretical and legislative level of the processes, but try as much as possible to create or encourage the creation of solutions that allow a correct application of the rules and a comparability of data. Finally, they must always take into account the time needed for companies to adapt to change, the proportionality of obligations and the depth of information linked to different company sizes;
  4. the financial world which - if we assume institutions are the engine - is the fuel for change. In order to play this role well, financial players must pay close attention to the needs of companies, propose suitable and easy-to-use instruments that can enable as many of them as possible to take the necessary steps to make their production processes and business models more sustainable. An important part of this is the recognition of both the material costs and consultancy costs a company has to bear to start the transition process and which have to find a place among the eligible costs for financing purposes;
  5. business associations, which should not experience these changes passively, but rather take a leading role. They should foster the exchange of knowledge, experience and networking among companies, develop practical and concrete solutions to help them understand how they are placed in terms of sustainability, which paths of improvement to take and how to measure, report and voluntarily communicate ESG strategies and performance to make these more understandable to the financial sector. Moreover, thanks to their proximity to the territory, they can avoid the proliferation of different initiatives with similar aims, and detect and propose how to remove all practical obstacles that could create problems in financing businesses;
  6. new generations that companies should include among their stakeholders and whose views they should consider in the processes of defining business models. Intra-generational relations are one of the most hotly debated aspects in discussions concerning sustainable development. One of the main risks is to automatically transfer value systems from one generation to the next, assuming the former knows what the latter needs and is looking for. Also in companies, in general, there is a lack of structured opportunities for dialogue to bridge gaps in mutual knowledge and bring important benefits such as attracting or retaining talent or meeting market needs more effectively.

In order to retain an alignment between an entrepreneurial and specialist vision and reach a common ground, our work always involved a constant dialogue between Assolombarda's Technical Group for
Credit and Finance, a group of experts selected from the member companies and the Association's experts.

Like any positioning, this work is dynamic in nature and we aim to review its contents periodically to bring new insights from the business world into the debate and get the maximum return from activating sustainable finance. This is set to become increasingly important in the coming years, including in light of Next Generation EU.

Contacts

For further infomration, please contact Credit and Finance Department (fin@assolombarda.it; tel. +39 02.58370704).

Ripensare l’impresa per la sostenibilità: dal modello di business alla governance

Ripensare l’impresa per la sostenibilità: dal modello di business alla governance

Tavola rotonda: come gestire i rischi nelle operazioni di M&A?

Tavola rotonda: come gestire i rischi nelle operazioni di M&A?

Inflazione, cambi ed energia: una strategia oltre l’emergenza

Inflazione, cambi ed energia: una strategia oltre l’emergenza

Dal check-up dell’agevolato alla costruzione del business plan e alla comunicazione ESG: le novità in Bancopass

Dal check-up dell’agevolato alla costruzione del business plan e alla comunicazione ESG: le novità in Bancopass