Italian institutional investors confronted with hard reality of net-zero transition

Pension funds and asset managers in Italy have faith in sustainable investing even though the path of transitioning to a net zero economy is mined with uncertainties, changing domestic and international policies, and a well-known overabundance of regulations.

Investors in Italy are struggling to find the right metrics to measure the transition, and to set out investment strategies, as they grapple with scenario analysis for asset allocations to balance return targets and decarbonisation, and modelling the impact of ESG investing on returns.

Asset managers are considering renaming funds in light of guidelines set by the European Securities and Markets Authority (ESMA), or to launch new strategies to invest in the transition. The European Union regulatory framework is represented at times as a burden.

“If Europe wants to be a leader [on sustainable transition] it must simplify and reorganise regulatory frameworks,” said Fabio Guerrieri, director of ESG at PwC Italy, at Salone.SRI, a forum on ESG held by research company ET.Group this week in Milan.

PwC has conducted an analysis on the implementation of the Sustainable Finance Disclosures Regulation (SFDR), concluding that the rules have helped raise awareness of sustainability among investors since entry into force, but brought with them “a high level of confusion and disruption, and discontent among asset managers”, particularly among those who really believe in sustainable investing, he added.

Marco Carlizzi, president of asset manager Etica, which specialises in responsible investments, noted that sustainability is losing momentum, and in Mario Draghi’s view, especially on competition in the defence industry, is not the answer.

“Hopefully the new EU Parliament won’t follow Draghi’s agenda, and won’t change the Corporate Sustainability Due Diligence Directive (CSDDD), that looks at the supply chain,” he added.

Pension funds for a just transition

Pursuing sustainability goals, and engaging with companies, protect the assets from ESG risks, and from the risks of litigations, said Riccardo Realfonzo, coordinator of the technical committee of pension funds at Assofondipensione, at the Salone.SRI.

During the event, Assofondipensione launched the Engagement Project for 2025-2026, advised by Nummus.info.

The association will engage with 10 companies per year for a “just transition” to renewable energy sources that will take into account the impact on the labour market, Claudio Kofler, managing director of Nummus, explained.

It will also engage in plans to fight climate change, biodiversity, support the circular economy, labour and human rights, and fiscal transparency, according to Kofler’s presentation.

“We believe in the role of complementary forms of pensions to achieve sustainability goals in Italy, for a transition that is socially fair, and we think that this is not only a political choice, but pursues the goal to increase the number of members [of pension funds[”, Realfonzo added.

Libero Giunta, responsible for finance and control at Fondo Pensione Cometa, the supplementary pension fund for the metal industry, invoked a new political programme of dialogue with the public on environmental risks in Italy, a fair transition that is important for metalworkers, on diversity rights, and the fight against mafia.

Cometa has redesigned its investment portfolio according to Article 8 of SFDR, involving assets managers, Giunta said, pushing back on criticism of those thinking that sustainability and returns are incompatible.

Capital flows

Panellists at the event agreed that the journey towards net zero will progress despite challenges.

Armando Carcaterra, head of investment support and principles at Anima, said his firm continues to invest sustainably as more companies set targets on sustainability issues, which allows Anima to expand its investable universes.

Transparency, regulatory reviews and cutting complexity are the stepping stones to steer capital towards the real economy in Europe in the future.

“Apart from green bonds, the impact of capital flows towards sustainability – we are talking about private markets – hasn’t been very strong, and there’s still a long way to go,” said René Nicolodi, head of equities and deputy head of asset management at Swisscanto.

Fideuram Asset Management plans to triplicate green bonds investment by 2025 to accelerate the transition, added Gianluca Lonero, head of ESG integration and active ownership.

Lauretta Filangieri, responsible for sustainability at Intesa Sanpaolo Vita, called for a uniform framework on sustainability to create common standards on ESG rules.

“We are working on decarbonising portfolios, on products and methodologies with asset managers, for the classification of products and to develop investment strategies,” she added.

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