The Bank of Italy is proposing a new scheme that will reward companies that meet ESG criteria.

Reported by Reuters, the scheme is scheduled to be operational by end of June, and will affect the Bank’s €8bn in shareholdings and will be extended to its €1bn in corporate bond holdings.

Bank Governor Ignazio Visco has been forthright about the need for the financial sector to adopt better policies for the climate saying in a recent speech: “These changes pose new risks for the real economy and for the stability of the financial sector. First of all, there is the “physical risk”, deriving from the progressive change in the climate and, in particular, from the increase in temperatures, from the greater irregularity of rainfall and from the increase in the probability of observing extreme natural events. According to all the main climatological scenarios, Italy will be the European nation most exposed to damage caused by the flooding of rivers.”

The criteria will exclude firms that do not adopt UN principles on human rights, labour, the environment and anti-corruption.

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