Green Finance and ESG factors: What future for the Italy-China trade?

Abstract

Green financial practices, revolving around non-financial tools such as the ESG factors, are gaining the attention of companies and institutions: they allow them to gain access to the capital and financial market in a different way and, thus, attract investments and increasing the cash-flow of the company. Today, green finance can guarantee an important competitive advantage, but what consequences will there be in the future for those companies that are involved in the Italy-China trade? In the first chapter of my paper, I will first describe the major changes in the macroeconomic environment: the objective is to underline the new set of rules that governments and local authorities need companies to follow. The focus will be on European Union’s Normative and Chinese legislation for the environmental protection. The second chapter will describe green finance practices, such as green bonds, and ESG factors and ESG investing. The objective of this chapter is to understand the role that banks have in sustainable projects, the incentives that the institutions guarantee to support these projects, as well as describing the Principles for Responsible Investments and the Global Reporting Initiative that allow different business to communicate their commitment over ESG issues. Finally, the third chapter will merge the conclusions of chapter one and two by taking the point of view of the Italy-China trade. In particular, the objective of this chapter will be evaluating the impact that all those changings in green finance, ESG perception and international political measures will have over the main sectors involved in the Italy-China trade.