In 2020, the Bank of Italy made further progress in applying sustainability criteria to the management of its financial investments, which started the previous year (link).
After the integration of the ESG (Environmental, Social and Governance) investment criteria into the internally managed equity portfolios for the Italian and euro-area markets, in 2020, the sustainable investment policy was gradually extended to other markets and asset classes.
Specifically, the ESG criteria were adopted for equity investments in the United States and Japan. The collective instruments used for investing in these markets were replaced with similar instruments linked to ESG benchmarks; the replacement was finalized at the beginning of the current year.
Moreover, the management of corporate bond portfolios, which is carried out both internally for euro-denominated securities and mandated to external managers for those denominated in US dollars, is now linked to the replication of ESG indices in place of the previous traditional indices.
Lastly, in 2020 a portfolio of green bonds issued by supranationals and agencies was also set up. These euro- and dollar-denominated bonds are added to the initial subscription made in 2019 on the green bond market of a share of the fund managed by the Bank for International Settlements (BISIP), mainly composed of sovereign and supranational bonds in dollars.
The Bank of Italy is committed to the continuous improvement of investment policies and risk management practices in both financial and sustainability terms.
With this in mind, the Bank of Italy will continue to provide updates on the initiatives undertaken and the results achieved.