Investing in climate change to restart the economy: guidance on 4 actions and 6 sectors

Source: ItaSIF

• 4 priority actions for investors: analyze climate-related financial risks; improve transparency on sustainability themes; reduce adverse environmental impacts; invest in mitigation and adaptation solutions.
• 6 strategic sectors for mitigation and adaptation: energy; farming and forests; transport and mobility; cities and construction; digital technologies; circular economy.
• These are the core themes of the “Sustainable climate investments” handbook by the Italian Sustainable Investment Forum (ItaSIF).
• The handbook was presented at the closing event of the 9th edition of the SRI Week, which involved over 5.000 people in 13 online events organized by ItaSIF.

Investing in the decarbonization of the economy will help restart it after the crisis triggered by the current pandemic and will contribute towards long-lasting social and economic development: sustainable finance can play a crucial role in this process by incorporating the “climate factor” in investment policies. The new ItaSIF handbook identifies 4 priority actions for investors and 6 strategic sectors where action needs be taken, including through public-private partnerships.
The handbook is comprised of the contributions of a working group organized in collaboration with WWF and with the support of BPER Banca, Etica Sgr, Natixis Investment Managers and UBS Asset Management and was presented during the closing event of the ninth edition of the SRI Week, which involved over 5.000 people in 13 online events organized by ItaSIF (overall, the SRI Week calendar featured 17 conferences and 2 cultural events).

Climate-aligned sustainable investments: contents
Starting point: the current crisis triggered by the COVID-19-pandemic should not overshadow the issue of climate change
The goal to curb global average temperature rise to within 1.5° should not be downplayed in comparison with the crisis triggered by the COVID-19 pandemic, for two reasons. First, because healthcare- and environment-related issues are closely interconnected: altered ecosystems increase risks for human health and, conversely, safeguarding biodiversity and countering global warming entail beneficial impacts, including on health. Second, because climate-aligned investments unlock opportunities to restart the economy. Therefore, it is necessary to align portfolios to decarbonization targets and invest in climate change mitigation and adaptation solutions. How?

4 strategic actions and 6 priority sectors
The handbook examines 4 actions that investors can incorporate in their investment policies in order to factor in environmental and climate-related themes: 1) analyze climate-related financial risks; 2) improve transparency on sustainability themes – with corporate reporting and ESG data availability for investors being essential; 3) reduce the adverse environmental impacts of portfolios – through a combination of engagement, exclusions, divestment and reallocations; 4) invest in mitigation and adaptation solutions.
This fourth edition of the handbook examines 6 strategic sectors, including in terms of public-private partnership action: 1) energy; 2) farming and forests; 3) transport and mobility; 4) cities and construction; 5) digital technologies; 6) circular economy.

The interconnection between the environmental and social aspects of climate change
One of the peculiarities of the handbook is that it analyzes the social phenomena related to climate change and their financial relevance, including risks (e.g., health issues, more inequalities and forced migration) and opportunities (in terms of just transition and more resilient enterprises and human societies).

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