By Gaudenzio Bonaldo Gregori and Silvio Cavallo.
The CEO of Pillarstone Gaudenzio Bonaldo Gregori and the General Counsel Silvio Cavallo have published today an interesting contribution in Italian language entitled “Companies in restructuring, ESG and sustainability in the investor’s perspective” on the blog Econopoly of Il Sole 24 Ore.
“Environmental, social and governance (ESG) factors are progressively becoming central to the alternative investments industry. The recent adoption boost of this new investment standard is the result of a heterogeneous combination of forces.
First and foremost is the market demand. According to recent research by Edelman, 88% of institutional investors use ESG valuations in their investment decisions, which clearly influence capital allocation strategies. The market’s appetite for sustainable investments seems likely to increase: according to PWC, by 2050, total ESG assets in Europe may exceed the 7 trillion euro mark representing the majority of assets managed by European harmonized funds.
In addition to the market, also the regulatory framework will fuel the boost: the European institutions have clearly expressed their intention to place sustainability issues at the center of a new model for the financial system. Within the European regulations, the SFDR regulation (which came into force on March 9 establishing a harmonized framework of disclosure and transparency obligations, functional to the integration of sustainability risks in investment processes) is particularly important for managers.
This sustainability standard can be interpreted according to a variety of models including the use of ESG as exclusion factors (i.e. the manager will not invest in asset classes or companies that are misaligned with respect to a predetermined catalog of standards or circumstances) or the adoption of investment policies aimed at achieving specific social or environmental impact objectives. […]”