N. 20 | Responsible and profitable investments

July 31, 2018

N. 20 | Responsible and profitable investments

In Italy, the green economy is already worth over €100 billion, equivalent to approximately 10% of the national economy. Today, more than one in five companies in our country invests in environmental sustainability – creating over three million posts in the green field – and that number continues to grow. Furthermore, this positive trend does not relate only to our own country, but also to those overseas: consider that, according to the Report on US Sustainable, Responsible and Impact Investing Trends, which is based on the years between 2005 and 2016, sustainable investments in the United States have grown by 33%. The reason for this lies in the nature and size of the returns generated by the green economy.

 So-called SRIs (Socially Responsible Investments) are, in fact, capable of bringing more tangible benefits to the company in a number of ways, which can be measured in the mid- to long-term: taking exports, for example, the strategic role played by the ecological impact in favoring the positioning of a company in foreign markets can be considered. Moreover, the increase in exporting is reflected, for the majority of cases, in an increase in revenues. To offer some supporting data for this, the percentage of green companies that experienced a growth in their revenue is 27%, compared to 20% for others. Another economically important factor concerns the advantages as they relate to accessing credit, resulting from the ever-increasing attention paid to environmental sustainability by credit-rating companies and banks. 

The objective of SRIs, therefore, is twofold: on one hand, economic returns and, on the other, social impact. While the second objective is obligatory, the first is not necessarily: think of community investments, for example, which see companies providing the financing for an organization involved in a project for the good of the community. In this way, the company that makes these investments, turning the values that inspire it into tangible actions, is capable of expressing its own morals, while also earning positive feedback in terms of visibility, within a sector that is becoming increasingly sensitive: a Green Marketing strategy that can accurately convey the company’s ethical commitment, as opposed to the merely showboating nature of greenwashing, results in a proportional return in terms of the company’s reputation.

The criteria used to measure sustainable investments take several complementary variables into account, which are summarized efficiently by the European Union in the ESG principles (Environmental, Social, Governance):  the environmental context (into which the circular economy is introduced), the social impact, and the politics entailed in management. The measurement of SRIs, which is carried out on a multidimensional basis, once again highlights that they mirror a corporate culture that is based wholly on sustainability, a principle which permeates every aspect of the organization.