A system of Environmental Sustainability Certification to be created in Italy

On October 19th, 2020, the Ministry of the Environment and Protection of Land and Sea, Directorate-General for Sustainable Growth and Quality of Development in Italy, published a notice of expression of interest to select credit and financial institutions as well as providers of ESG software and consultancy on the measurement and evaluation of the sustainability performance of the company that intends to participate in the process of testing a system of indicators for green finance. 

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The objective of the program

The first goal of the experimental program is to create a system of “Environmental Sustainability Certification” that allows a project to be qualified as green and to measure its level of virtuosity. A further aim is, therefore, to help companies evaluate the environmental impact of their projects and to allow banks to select the projects to be financed also and above all on the basis of their environmental impact.

What companies can participate:

The notice is addressed to credit and financial institutions as well as providers of ESG software and consultancy on the measurement and evaluation of the company’s sustainability performance. Stakeholders must identify an investment project submitted by a micro, small, medium or large enterprise as referred to in the Commission Recommendation of 6 May 2003.

Timing and modalities of participation:

Stakeholders interested in participating in this trial must express their interest in participating by October 31st, 2020 at 11:30 p.m. by sending a PEC to CRESS@PEC.minambiente.it . The first 5 expressions of interest will be received in chronological order.

Modes of operation

The system in question provides that the credit institution, in order to assess the environmental performance of a project to be financed, should contact the Ministry of the Environment to request the initiation of the procedure. The Ministry, in turn, through the bank, issues credentials to the company in order to access an online platform where it can enter the data necessary to assess the environmental sustainability of the project it intends to carry out.

In the next phase, the Ministry, after evaluating the project on the basis of a number of ad hoc indicators (referred to in the next section), will communicate the outcome of the procedure to both the credit institution and the proposing company.

What are the indicators with which the green performance of the project is measured?

There are 6 indicators on the basis of which the sustainability of the project is assessed and they have been constructed on the basis of the six thematic areas covered by the European Commission’s Sustainable Growth Financing.

They are: Life cycle global warming potential; Adjusted water footprint x life cycle; PM, Nox, Sox, O3; Material circularity index; % renewable use; and Energy per unit of product.

The set of indicators is called “Green Dashboard”. For each indicator should be reported certain information such as the value of the indicator before the investment and the estimated value of the post-investment indicator.

When a project is evaluated positively and, therefore, can it be considered “green”?

The green quality of the project will be evaluated according to the Green Dashboard and a picture of the company before and after the investment will be taken. If there is an improvement of one of the six indicators without this leading to the worsening of the others, the investment is to be considered green since it highlights the fact that the company has actually started a path based on sustainability.

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(Featured image by Alexas_Fotos via Pixabay)

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First published in nonsolo ambiente.it, a third-party contributor translated and adapted the article from the original. In case of discrepancy, the original will prevail.

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