187 – Measuring investments progress in ecological transition

Measuring investments progress in ecological transition: the Green Investment Financial Tool (GIFT) approach

Leonardo Becchetti, University of Rome Tor Vergata

Mauro Cordella, TECNALIA, Basque Research and Technology Alliance (BRTA),

Piergiuseppe Morone, University of Rome UnitelmaSapienza

Highlights

• Sound indicators are required in sustainable finance to monitor the ecological transition.
• An approach to assess environmental impacts of investments vs. their counterfactual is developed.
• Life-cycle based key performance indicators and social safeguard boundaries are introduced.
• The approach can support policies aimed at implementing the ecological transition.

Abstract

Driving and monitoring the transition toward a sustainable economy requires sound social and environmental indicators. In this paper we outline the ‘Green Investment Financial Tool’ (GIFT), a pilot project developed by the Italian government to assess environmental impact of investments from a life cycle perspective, ensuring they contribute to environmental progress while fulfilling social safeguard requirements. We explain how GIFT can be applied to small and medium business investments without creating competitive barriers associated with high cost of implementation. We also discuss how the approach could be potentially used in support of policy applications (e.g. enhancing green private investments, issuing green government bonds) and which are the implication for knowledge creation (monitoring and accounting).

Key words

Ecological transition; Environmental impacts; Green investment; Key performance indicators; Life cycle assessment; Sustainable Finance