Esg products, a setback that lets you see recovery

2024 was certainly a year of great difficulty for Esg financial products, especially in the US, whose development seemed unstoppable and the current year does not seem to be one of recovery. There are many reasons for this: over-regulation, the exclusion of energy and industrial products from investment in too short a timeframe for both the economy and society, with particular regard to home heating and automotive; geopolitical instability that has provoked wars starting with the Russian invasion of Ukraine and generated a strong need for defence and therefore the purchase of armaments.

The reduction began with some of the most important asset management companies leaving the international organisations that bring together financial groups active in the containment of the climate crisis, conditioned both by the last American elections but also by policies more compatible with the economic and employment needs of the population concerned. End of a grand objective? Absolutely not; certainly a rethinking of the rules on ecological and energy transition, in the light of the facts highlighted, is inevitable and even desirable, but it is absolutely unrealistic to think that environmental policies will go backwards and downwards. Not least because the demographic and ecological situation of the planet with global warming that in January 2025 was 1.75 degrees warmer than the pre-industrial level and was the 18th month out of the last 19 in which the global average air temperature was more than 1.5 degrees warmer than the pre-industrial level, are a loud wake-up call. It is true that we do not know on a scale of 1 to 10, how much climate change depends on natural factors and how much on man; What is certain, however, as the United Nations and the majority of scientists maintain, is that a substantial part of the problem depends on mankind, on abnormal population growth, on excessive and unnecessary mass consumption, on 36 billion tonnes of CO2 and other gases released into the atmosphere every year, on the destruction of natural habitats and biodiversity, and on the consumption of 1.7 'Earths' every year, so much so that we have accumulated more than 13 years in debt since 1973, as the Global Footprint Network tells us. So while we need to abandon the unrealistic dreams promoted by the European Union about electrifying cars or reducing 'scope 1,2,3' emissions from transport and homes, there will certainly be no return to polluting cars or diesel or gas boilers; a rethink about using gas as a bridge to renewables or endothermic engines that could be powered by biofuel or hydrogen seems indispensable. Moreover, no government will be able to reverse the fight against climate change, not least because while not so long ago, 80 years ago, a flood or hurricane affected about two billion earthlings, today it affects more than 8.1 billion; we breed as many mammal animals for a living, we slaughter over 50 billion of them a year excluding fish and shellfish and making a specific weight per mammal of about 50 kilograms it is as if there were not only 8.1 billion humans on earth but over 33 billion beings eating, drinking, breathing and emitting CO2 and other pollutants including CH4 (methane). And then there are the wars and the clash between the vision of the democratic West (albeit with all its limitations) and the autocracies of China, Russia and Iran, which attract the sympathies of the countries of the global South. In this context, Europe finds itself unarmed; Italy would only have ammunition for a few days in the event of an invasion, and so politics proposes to allocate at least 2% of GDP in armaments (but some speak of 3 or 5%). Do we exclude all manufacturers of non-electric cars, boilers, weapons, plastics and all their supply chains?

Perhaps it would be better to revise the European Parliament and Commission directives (SFDR, taxonomy, CSDR) and the Esma directives to make them more compatible with the lives of the people of Europe if we do not want an advancement of populist and extremist parties, which would really mean a retreat in the fight against climate change. Rather than focusing everything on 'scopes 1,2,3' it would be better to have a scope 4 vision for emissions, where what counts is how many emissions the company, through its activity, products and services, has managed to avoid. Translated as how much the products are less polluting compared to certain standards that increase over time. And finally, the policy of exclusions has to be rethought while engagement could with the new rules be very relevant.

President Itinerari Previdenziali