A national dialogue with Italy's banking and finance sector yielded a list of 18 possible policy actions for redesigning the country's financial system to meet sustainability aims.
UN Environment Executive Director Erik Solheim welcomed Italy’s international leadership, observing that more and more countries are taking a systematic approach to financing sustainable development.
6 February 2017: A national dialogue process on green finance in Italy has yielded a list of 18 possible policy actions for redesigning the country’s financial system to meet sustainability aims. The one-year dialogue engaged Italy’s banking and finance sector to identify barriers to and opportunities for improving the flow of financing to socially-inclusive and ecologically-sound projects.
Ideas from the dialogue, which was convened by Italy’s Ministry of Environment, Land and Sea (MATTM) in partnership with the UN Environment Programme (UN Environment, or UNEP), are contained in a report, titled ‘Financing the Future,’ released by UN Environment and the Government of Italy. The report recommends: including a national sustainable finance strategy when drafting Italy’s proposed Green Act; increasing access to green finance for small and medium enterprises (SMEs), which make up a large proportion of Italy’s business landscape; and establishing a national green bond development committee, among other actions. The authors note that Italy is the world’s eighth-largest economy, and the second-largest manufacturer in Europe, but its economic development is hampered by structural challenges, such as a high level of public debt (113.2% of GDP), weak economic growth and high inequality, with the country’s Southern region being much poorer than the Northern and Central regions.
As Chair of the G7 in 2017, Italy has made green finance a theme of its work.
Italy has a National Strategy on Sustainable Development, which is updated every three years based on consultation with its State-Regions Conference and national environmental NGOs. A forthcoming update is expected to bring the strategy in line with the 17 Sustainable Development Goals (SDGs). Italy is chairing the Group of 7 (G7) in 2017, and has made green finance a theme of its work.
Launching the report, UN Environment Executive Director Erik Solheim welcomed Italy’s international leadership, observing that more and more countries are taking a systematic approach to financing sustainable development. A UN Environment press release notes that in 2016, the Group of 20 (G-20) recognized the need to “scale up green finance,” and that the issuance of green bonds in 2016 almost doubled from 2015 levels, reaching US$81 billion worldwide.
UN Environment is the organizer of the Inquiry into Design Options for a Sustainable Financial System, which seeks to change the rules and incentives governing financial markets, to promote actions in favor of sustainability. A December 2016 report from the Inquiry examines the role that financial technology (‘fintech’) could play in supporting social impact and venture capital funds with sustainable development ambitions. In a guest article for the IISD SDG Knowledge Hub, Simon Zadek, Co-Director of the Inquiry, argues that “digital green finance” could potentially overcome barriers to deploying private finance toward sustainability aims.
Also in December 2016, UN General Assembly (UNGA) President Peter Thomson convened an informal briefing of UN Member States on SDG financing. He informed participants that US$5-7 trillion is needed to implement the SDGs, and encouraged governments to make “hard choices” to establish sustainable financial systems. [UN Environment Press Release] [Publication: Financing the Future: Report of the Italian National Dialogue on Sustainable Finance] [MATTM Website] [Simon Zadek Guest Article: Greening Digital Finance] [Inquiry Webpage] [SDG Knowledge Hub Story on Informal Briefing on SDG Financing] [SDG Knowledge Hub Story on Fintech Report]