ITALY - UK PARTNERSHIP

FROM THE CHAMBERS | 13 www.italchamind.eu for a rapid transition to a low carbon and climate resilient economy. Bonds are divided into 8 macro areas, although not all of them are ready to be certified. Criteria have been approved for some sectors, under development for others and due to commence for the remaining. Looking at the certification criteria approved by the Climate Bonds Initiative, it is worthy to mention the presence of the energy sector investments (solar, wind, geothermal and marine renewables). Within the transport area, at the moment, criteria were approved for low-carbon private transports, public passenger transport and freight rails. Water related investments can also be certified, given the links between climate change of distribution and supply of fresh water. Low-carbon residential and commercial buildings, as well, fall in the certified category. Two of the remaining macro-areas are awaiting the Board approval (Land Use & Marine Resources and Waste/ Bioenergy), while two are due to commence (Industry and ICT). GREEN BONDS IN ITALY AND THE UK The European presence in the green bond market is significant, being green bonds traded in Stock Exchanges: London, Milan, Stockholm, Luxembourg, Frankfurt and Oslo have a dedicated green bond list/segment. In Italy, Borsa Italiana has an active role in promoting informative standards as to contribute to the development of green bonds. In fact, the Italian stock exchange is actively part of the Sustainable Stock Exchange Initiative, held by the UN in order to help the shift to a low environmental impact economy. Moreover, Borsa Italiana is part of the Climate Bonds Initiative through the London Stock Exchange that is also a signer of the Paris Pledge for Action, which was joined by businesses, cities, investors and trade unions to ensure that the Paris Agreement would be successful in limiting global temperature rise to less than 2°C. Italy is well represented by a 4% of the benchmark that includes utilities, Ferrovie dello Stato and Blue Chip companies like Enel and Intesa San Paolo. Intesa San Paolo also has a remarkable performance in terms of green finance, as witnessed by its June 2018 results: - €500m invested - 615,820 MWh of renewable energy production - 29,297 MWh of energy savings - 213,314 metric tons of CO2 greenhouse gas emissions avoided In the UK, funds started being invested in renewable energy in 2013 with the London Stock Exchange hosting 95 different green bonds in different currencies that can be traded in Regulated Market and in Multilateral Trading facilities, with the condition of passing an external review in order to verify the green nature of the bond. In 2018, in the London Stock Exchange, listed firms increased their value by an average of +1.7% compared to others and 20% of the total revenues were performed by green institutes. GREENWASHING Investors need to watch out for greenwashing attempts. The greenwashing phenomenon is the practice of falsely claiming that a service or technology has environmental benefits. In order to avoid this, it is essential to gather information about the green certification of investments, whilst asking the companies for disclosure on their response to climate change, including greenhouse gas reduction and renewable and energy-efficiency strategies, being wary of green washing attempts. · Taxonomy table courtesy of The Climate Bond Initiative