Banca d'Italia details sustainable investment performance
Banca d'Italia's 2025 annual report details the integration of environmental, social, and governance (ESG) factors into its investment management. The report highlights a limited exposure to climate transition risk across its financial and supplementary pension portfolios, with carbon footprint and intensity significantly reduced since 2019.
Reduced carbon footprint, expanded green bonds
Banca d'Italia's 2025 climate data confirms a limited exposure to transition risk for equity and corporate bond investments across its financial and supplementary pension fund portfolios.
Compared to 2019, the carbon footprint for equity investments decreased by 54 percent and for corporate bonds by 71 percent.
The weighted average carbon intensity (WACI) also saw significant reductions, falling by 59 percent for equities and 67 percent for corporate bonds.
These improvements stem from the Institute's investment strategy, which prioritizes companies demonstrating best sustainability practices and those making progress in emission reduction.
Additionally, the share of green government bonds within the financial portfolio has substantially expanded, reaching 5.8 percent, equivalent to 7 billion euros in nominal value.
The Bank's allocation choices consistently favored firms with higher ESG scores and certified decarbonization commitments, with 78 percent of equity and 86 percent of corporate bond investments meeting these criteria.
Promoting sustainability across the financial system
Beyond its direct investment management, Banca d'Italia actively promotes sustainability throughout the financial system.
The Institute encourages the dissemination of ESG information by companies and financial intermediaries, contributing to a broader culture of sustainability among both professionals and citizens.
In 2025, the Bank published key findings from its monitoring of climate and environmental risk integration within supervised intermediaries' business processes.
It also organized webinars and conferences on energy transition and sustainability, engaging national financial and insurance sector representatives.
Furthermore, Banca d'Italia's research activities focused on analyzing ESG profiles of firms and intermediaries, their impact on financing costs, and investor preferences, alongside studies on transition risks and decarbonization strategies for banks.
Leading by example, with room to grow
This report demonstrates Banca d'Italia's strong commitment to ESG integration, setting a clear example for other institutions in Italy and the Eurosystem.
While the detailed metrics showcase tangible progress in decarbonization and risk management within its own portfolios, the report's scope remains largely internal.
Future efforts could further leverage its influence to drive more widespread sustainable finance practices across the Italian economy, extending beyond its direct investment mandates.