Virtuous circles

Today, more than ever, the onus is on companies to manage their businesses responsibly. It is widely recognised that incorporating strong environmental, social and governance (ESG) principles into the fabric of a company not only benefits the planet and its people, but can also create greater value and support long-term success. 

While it has become clear that developing sustainability strategies does not mean compromising the bottom line, companies can face challenges when introducing them into their business. Support from the financial ecosystem at every step of the critical transition process is vital, in order to underpin recovery and create future resilience in the Italian economy. 

Building back stronger 

The road to recovery following the recent global pandemic is set to be inextricably linked to sustainability, with the OECD¹ warning that a business-as-usual approach will not protect against future turbulence. Instead, building back better in Italy means businesses adjusting their practices to focus on ESG principles, including reducing emissions and harmful environmental impacts, increasing the circularity of supply chains and improving diversity in order to safeguard against risk. 

“In an increasingly competitive economic environment, new business models are urgently required,” says Mauro Micillo, Chief of IMI Corporate & Investment Banking Division at Intesa Sanpaolo. “We are accelerating towards circular models for a more sustainable and efficient use of resources.” 

It has become increasingly clear that ESG principles are supporting growth in the financial sector, with ESG assets predicted to exceed US$53tn by 2025, more than a third of the US$140.5tn in projected total assets under management². 

Given the crucial role ESG plays today, and the significant extent to which business resiliency depends on it, companies simply cannot afford to ignore the shift. However, the transition to adopting circular, sustainable approaches at the heart of businesses is not necessarily a straightforward one. Gaining a deeper understanding of regulation, introducing a shift in mindset or company culture, reducing waste and streamlining processes – these can be significant challenges for all firms, irrespective of size. To effectively address these issues, expert support is needed. 

Support systems 

Intesa Sanpaolo is one of the few European financial groups to have signed up to all of the main UN Sustainable Development Goals, making it ideally placed to offer the vital support that Italian and international clients need to successfully implement their ESG transition by harnessing the expertise and experience of its IMI Corporate & Investment Banking Division.

Intesa Sanpaolo was the first Italian bank to issue a Green Bond and, through IMI Corporate & Investment Banking Division, acted as structuring advisor and book runner for Italy’s first sovereign green bond (Green BTP) in March 2021. In addition, the bank deployed a €6bn Circular Economy Plafond to help companies in Italy and abroad to adopt this business model. 

The Division continues to support clients in achieving UN Sustainable Development Goals and climate targets, which will prove vital in mitigating the damage caused by the pandemic and creating a stronger economy.

 
Recent social and economic disruption has had a destabilising effect on companies. However, it has also provided opportunities for businesses not only to grow back with stronger ESG principles in place but also to address their underlying weaknesses. Businesses need urgently to adopt circular models if they are to recover from economic instability with more resilient foundations in place.

To achieve this, support from and investment by the nation’s banking ecosystem is crucial. As Micillo notes: “The issue of sustainability is no longer a frontier. It has become a topic for assessing creditworthiness and long-term value creation.”