Abstract
Sustainable finance has long constituted the focus of European institutional initiatives. The 2018 Action Plan on financing sustainable growth had already developed a comprehensive strategy to further connect finance with sustainability, highlighting among the planned actions that of redirecting capital flows toward a more sustainable economy.
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Notes
- 1.
As defined by Legislative Decree no. 39 of January 27, 2010.
- 2.
The Taxonomy Regulation also applies to member states and the EU in the context of the introduction of obligations on financial market participants or issuers regarding the sale of financial products or corporate bonds labeled as “environmentally sustainable”.
- 3.
The Statistical Classification of Economic Activities in the European Community, commonly referred to as NACE (for the French term “nomenclature statistique des activités économiques dans la Communauté européenne”), is the industry standard classification system used in the European Union. The current version is revision 2 and was set up by Regulation (EC) No 1893/2006.
- 4.
NFRD only applied to larger companies, defined as those with more than 500 employees.
- 5.
More specifically, the task of developing the draft EU Sustainability Reporting Standards was assigned to the European Financial Reporting Advisory Group (EFRAG), a private association established in 2001 with the encouragement of the European Commission to serve the public interest. EFRAG expanded its mission in 2022 as a result of EFRAG’s new role in CSRD, providing technical advice to the European Commission. The timeline contained in the CSRD proposal assumes the development of draft sustainability reporting standards in parallel with the legislative process of the CSRD proposal.
- 6.
European Commission, “FAQs: How should financial and non-financial undertakings report Taxonomy-eligible economic activities and assets in accordance with the Taxonomy Regulation Article 8 Disclosures Delegated Act?”, December 2021 (updated January 2022). Further guidance for reporting was provided by the Appendix 1 “Platform considerations on voluntary information as part of Taxonomy-eligibility reporting” published by the Platform on Sustainable Finance on December 20, 2021.
- 7.
Data are taken from Bloomberg infoprovider and, where not available, from the Business Register, held by the Chamber of Commerce, Industry, Agriculture, and Handicrafts (CCIAA), to which all companies are required to register and file annual financial statements. Sectors under which no company falls have not been represented in the table.
- 8.
In fact, several specific KPIs are required to be disclosed for the latter (Taxonomy Regulations, Art. 8) such as the proportion of their turnover derived from products or services associated with economic activities that qualify as environmentally sustainable and the proportion of their capital expenditure and operating expenditure related to assets or processes associated with economic activities that qualify as environmentally sustainable.
- 9.
As mentioned above, the focus of the analysis is the Italian market.
- 10.
According to EU Commission Delegated Regulation, a ‘financial undertaking’ is “an undertaking that is subject to the disclosure obligations laid down in Articles 19a and 29a of Directive 2013/34/EU and is an asset manager, a credit institution as defined in Article 4(1), point (1), of Regulation (EU) No 575/2013 of the European Parliament and of the Council22, an investment firm as defined in Article 4(1), point (2), of Regulation (EU) No 575/2013, an insurance undertaking as defined in Article 13, point (1), of Directive 2009/138/EC of the European Parliament and of the Council23, or a reinsurance undertaking as defined in Article 13, point (4) of Directive 2009/138/EC”.
- 11.
As previously mentioned, includes voluntary disclosure of 1 mainly non-financial undertaking.
- 12.
Including one Italian government investment bank and one Italian government agency active in financing strategic sectors for development and employment that are disclosed as credit institutions.
- 13.
As previously mentioned, this includes voluntary disclosures of two subsidiary insurance groups.
- 14.
- 15.
Bank of Italy, Annual Report for 2021. Rome, 31 May 2022.
- 16.
The consumer bank also specified that following the industrial restructuring of the joint venture that controls it, this will be its last year of publication of an Italian NFS.
- 17.
However, a single significant bank alone represents 60.5% of these assets.
- 18.
This type of asset is present in all eligibility disclosures: as seen above, some (19) calculate them with point data, others through proxies.
- 19.
Of the 27 institutions that publish voluntary information, 5 use the share of total assets and not the share of total assets covered as the denominator to ensure data comparability, the following institutions have therefore been excluded.
- 20.
The lines of business indicated are: a. medical expense insurance; b. income protection insurance c. workers’ compensation insurance; d. motor vehicle liability insurance; e. other motor insurance; f. marine, aviation and transport insurance; g. fire and other property damage insurance; h. assistance.
- 21.
In any case the proportion of Taxonomy non-eligible non-life insurance economic activities is the residual part to reach 100%.
- 22.
The Corporate Sustainability Reporting Directive was eventually approved by EU Parliament on November 10, 2022.
- 23.
The first 12 final drafts of standards (as a result of the consultation process held during 2022) were sent for final approval to the EU Commission on November 23, 2022.
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Torre, M.L., Santamaria, R., Cardi, M., Palma, A. (2024). First Assessment of EU Taxonomy Regulation for Italian Financial Firms. In: La Torre, M., Leo, S. (eds) Contemporary Issues in Sustainable Finance. Palgrave Studies in Impact Finance. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-031-45222-2_3
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