Connecting European economies with the world market in order to invest capital for future generations. This is a great challenge for him. euronextthe main European capital market, as emphasized Mathieu CaronHead of Listing and Corporate Services at Euronext in his speech atEuronext Sustainability Week.
Euronext, Caron explains, “demonstrates a commitment to science-based goals through a wide range of specific initiatives and tools, such as ESG bonds issued for 1.3 trillion euros. There is no shortage of support from companies, both through ESG version of major indicessuch as MIB ESG and CAC ESG, both with issuance of recommendations for i ESG processestheir understanding and transparency, but above all thanks to the new platform MyEsgWebsite. The latter, featured on the Euronext website, will be the first exchange to show standardized ESG data for each release.
The new platform is a major innovation and demonstrates Euronext’s ability to innovate in response to the need to integrate ESG tools into its portfolio, which is being adopted by a growing number of investors around the world.
And numbers ESG Products quoted confirm in the European price list championship this bag in eco-friendly tools. Maurice ShepardHead of Debt Listing at Euronext, mentions having 1,800 ESG bonds issued by more than 400 companies, worth 1.3 trillion euros.making him a world leader. These instruments represent a significant variety, ranging from sustainable bonded bonds, social bonds and green bonds, but they have all shown that they can better withstand crises such as the recent one, when they fell by 12% compared to 30% last year. the rest of the market.
Financial Instruments to Support Business Transition
Financial instruments to support companies in transition and the new role of the banking system were the focus of the discussion moderated by Carlo Massinipartner of Hogan Lovells in which they participated Fabio Negri GiamettiHead of Corporate Planning and Marketing at Banco BPM,
Manuela Carrahead of financial department CDP, Martha’s textsCEO of ELITE, Alfred RomanHead of Italy Greenomy, Gian Marco SalcioliHead of Strategic Marketing and ESG Initiatives at IMI Intesa Sanpaolo e Corporate and Investment Banking Massimo CatisoneHead of ESG Advisory at UniCredit.
There rapid development of the ESG scenarioalso related to the application of legislation, which is constantly being updated, is challenge for banks and intermediarieswho are called in to check their procedures every 2-3 weeks to keep up with changes. But demand from customers also drives us to stay ahead of the curve. Clients themselves ask for training and assistance in comparative activities, support in defining new practices, up to the development of an ESG structure that goes beyond simple economic aspects, including, for example, also legislative ones. And on the other hand, sustainability drowns its reasons in market logic, considering positive impact on long-term performance and risk reduction.
Thus, ESG factors become an important element in the financial analysis of credit lines and customer relationships. “ESG data is one of the elements to consider when evaluating an investment,” notes Negri Giammetti, “it’s just a matter of business, just think about increasing physical risks, as evidenced by events such as the flooding in Emilia-Romagna.” Even the CDP, Carra points out, has developed its own system assessment of credit lines in terms of ESG. “A system that has also had an impact on the real economy, as our criteria provide an incentive to develop projects and initiatives that follow the logic of impact and the Taxonomy.” Indeed, Salcioli stated that by now “ESGs are irreversible” and sustainable funding is actually financial funding. The debate continued on other topics such as the importance of data and key performance indicators to support the transition, the use of technology innovation funds with their challenges and opportunities, and the circular economy. Not forgetting the cooperation between banks, companies and institutions. “Alone is not the best way to do it,” Testi confirmed. “Now 90% of the food we consume is not recycled. This allows us to understand the enormous potential that look for “smart capital” that is what goes on finance the transformation of the economic model which should deal not only with decarbonization, but also definition of a circular production cycle“.
ESG roadmap for companies
Companies are at the center of the transition to a sustainable business model, and not just Italian ones. Therefore, it is necessary to extend Italy Sustainability Week to Euronext Sustainability Week with international coverage, as also noted by Barbara Lungi, Head of Italian Listing Sales at Borsa Italiana.
The role of the moderator of the second panel took over Antonella Brambillapartner of Dentons, who led the discussion on ESG Roadmap, a flexible and specific tool to support the ESG strategy in companies: compliance is not achieved overnight and it is important that companies have a clear path forward. Participated Piero Munarico-founder and managing partner of Arwin&Partners, Francis Paul VirgilHead of IR-consulting Euronext Corporate Services, Daniela BiaggiHead of the Euronext Corporate Services Academy, Salvatore AmitranoCEO of V-Finance, Rita Santanielloboard member of Sircle, Benefit Company.
For Amitrano, talking about roadmaps means talking about sustainable transformation, starting with agreementpassing through efficiency AND innovation. Importance move in time several guests repeat: “Everything should be ready yesterday,” says Biaggi. Munari is giving six months to complete the compliance process, given that the rating alone can last up to two months as part of a broader three-year roadmap. In any case, ESG is not just a nuisance and a regulation to follow, but a big regulation. opportunities to usealthough for Santaniello now represents almost a “necessity” to stay out of the market. Education is again presented as a critical part of the transition process, with a top-down approach, starting with the board of directors, and constantly measuring performance and strategy evolution: “If you can’t measure it, you can’t measure it.” Manage it.” In addition to the collection datatheir consistency, clarity and integration are fundamental. ability to communicate effectively. For example, some PMI they will meet ESG requirements but fail to attract investors and lose opportunities and visibility. The round table ended with a tour of the role of CSOs (Director of Sustainability) in implementing a roadmap defined as “fundamental”, an agent of change that can really tip the balance from mere compliance to real sustainable transformation by bringing together internal and external stakeholders such as investors and rating agencies. This is provided that you develop the necessary technical skills, jargon and knowledge of the capital market.
The point of view of stock analysts and ESG rating companies
It happened to Camilla LekaThe head of ESG Euronext presented a panel discussion on ratingsmoderator Gianfranco Di VaioHead of IR and Ratings CDP e Valeria Ricciottihead of IR and credit rating agencies Leonardo, who led the discussion between Dominic Gilottico-leader of the research group at Equita, Alberto ChiandettiEquity Portfolio Manager Fidelity International, Federico PezzettiSenior Utilities Analyst Intermonte, Eva Heikants, account manager at Morningstar Sustainalytics. According to Chiandetti, those who have not yet realized the importance of investing in ESG are “missing one point.”
It is important for companies to set clear goals and have a short, medium and long term vision to navigate the complex world of rankings, still fragmented between different agencies and methodologies. The trend on the part of large asset management firms is to rely on rating companies rather than passively rely on their judgment to enrich their database and understand its value. Hedzhikants, faced with the differentiation of judgments of rating agencies, emphasizes the importance of choosing your own role model and tracking progress, sticking to simple and homogeneous criteria such as emission data (1, 2 and 3), avoiding confusion between different methods, avoiding outliers but focusing on real reductions.
An interesting option differentiation between companies: already compliant, with high potential and not yet committed. If 85% of the participants in the MSCI index represent at least one climate change strategy, none of them yet belong to the best package, only a few present data related to area 3; despite this, 35 companies with high potential are registered.
Engagement as a tool for comparing companies and investors
The last roundtable on opening day touched on an important but often underestimated topic: attraction of investors. They moderated Francis Pezzolihead of public relations Snam e Jessica SpinaHead of PR and Strategic Corporate Development at Mediobanca
How did they bring their experience Anthony Amendolasenior private equity fund manager in Italy at AcomeA SGR, Angel Medahead of stock at Banor SIM, Isabelle ReussSenior Climate and Social Adviser, Sustainable Finance Forum, Gianluca PediconiPartner and Portfolio Manager at MOMentum Alternative Investment, Francesca MozzatiProduct Specialist Sycomore Asset Management e Marcus Sevesohead of investment at Soprarno SGR.
But what information do investors need to form their own judgment about the sustainability of companies? Data and Key Performance Indicators they are necessary, but it is important that they are reliable. For this they must be updated with some frequency. “Thinking about outdated numbers, as is often the case, is a problem,” explains Seveso. The data then also needs to be interpreted in order to succeed. Compare Them with competitors. For this reason, dialogue between analysts and companies is necessary, as well as to understand the method by which the figures were collected and to be able to assess, as is the case with industrial companies, the differences between the various business segments of the portfolio. .
The data, although simple, must effectively represent qualitative, quantitative and long-term elements while maintaining the necessary transparency. As a result, the measurement and data collection process becomes quite complex, especially for SMEs that need constant guidance and collaboration. Participants spoke not only about financial resources, but also focused on human and intangible capital, whose importance has increased more and more in recent years. “The value of the intangible part of companies has grown from 30% to 70%, and this demonstrates the value of corporate culture, people and sustainable policies,” notes Pediconi. As Mozzati argues: “To live in a better world, cooperation with governments and more humane investments are needed.”
Thus, the first day of the Euronext Sustainability Week on the Italian Stock Exchange ended with a speech by Patricia Celia, Head of Large Capital Investments and Investment Companies, who summarized the necessary steps to successfully move companies and investors to zero.
Photo Credit: Andrea Grubi