The second Annual Report on Sustainable Investments and Climate Risks is published online

The Bank of Italy has published its second Annual Report on sustainable investments and climate-related risks.
The report is released contemporaneously with similar documents from the ECB and other central banks of the Eurosystem, sharing a common reporting model that follows the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD).
The Bank of Italy has been incorporating financial and sustainability criteria into its investment strategy since 2019 and will continue to strengthen this approach in its 2023-2025 Strategic Plan (please note eventid=20216).
Sustainability risks can affect financial risk and people’s well-being, financial and price stability, the growth of the economy, and therefore the objectives of central banks.
Consequently, the Bank of Italy is integrating climate-related and sustainability factors into its portfolio risk management models. Instead of simply excluding issuers from economic sectors with the biggest carbon footprints, the Bank prioritizes firms committed to the climate transition.
The report focuses on the Bank’s of Italy non-monetary policy portfolios and is divided into four chapters that cover the decision-making process, investment strategies, risk management, sustainability results, and objectives.
The Bank of Italy aims to manage its non-monetary policy investments consistently with the Paris Agreement and the European Union’s target of carbon neutrality by 2050. The success of this goal depends on the climate commitments of firms and governments in countries where investments are made. The Bank of Italy will regularly review its investment strategies and update its approaches based on new developments.