Commission supports Italy in the creation of a Sovereign Green Bonds Framework (SGBs)

With the support from the Commission’s Directorate General for Structural Reform Support (REFORM), Italy took a major step today towards fulfilling the ambitious goals of the Paris Agreement and the 2030 Sustainable Development Goals by deciding to publish the Sovereign Green Bonds (SGB) Framework. The new SGBs Framework will be used to finance public expenditure in a ‘green’ way in alignment with the “Green Bonds Principles” and, as much as possible, with the draft EU Green Bond Standard.

The European Green Deal adopted in December 2019 “resets the Commission’s commitment to tackling climate and environmental-related challenges” by establishing an ambitious framework of transformative policies to radically decouple economic growth from resource use and Green House Gas emissions. It is within this strategy that Italy’s SGB framework takes effect, as it will allow for the selection and monitoring of public expenses contributing in making the Italian economy and society more environmentally sustainable. The publication of the framework today come as a result of Commission assistance within the on-going technical support project “Sustainable Finance and Investments for the Transition to a Green Economy” funded by the European Union.

For Italy, the project also includes support in identifying all eligible green sectors in alignment with the EU Sustainable Finance Taxonomy as well as with the 2030 Sustainable Development Goals (SDGs) as well as the investment gap for all key economic sectors in Italy against the target of climate-neutrality by the year 2050. The investment gap, which will inform decision-makers as to how much investment is required, will take into account the technology used in these sectors as well as their contributions to emissions. In addition, the project has produced examples of impact indicators for each of the identified green sectors. Finally, the project will provide policy and regulatory recommendations to promote the much-needed mobilization of private capital flows towards sustainable projects. In this way the Commission’s support will endeavour to identify the economic and social costs of the sectoral reallocation induced by the transition to a climate- neutral economy.

In bringing the above to life, the Commission’s technical support to the Italian Ministry of Economy and Finance cuts across the whole spectrum of reforms needed for a country to align its direction towards sustainability. The project evidences that despite the complexity, with political determination, a green European future is possible. Italy is on the right path to mobilise both public and private capital and reorient them towards more sustainable investments. The Commission encourages other Member States to take inspiration from this project.

The press release of the Italian authorities is available here.