Businesses accelerate on sustainability

EY report, 69% of Italian companies developed a sustainability plan in 2021,

Despite the last two years of the pandemic, Italian companies have accelerated their commitment to sustainability issues with the aim of consolidating their business integration. This was revealed by the EY report “Seize the Change – sustainable futures” which analyzes the most relevant and significant sustainable development trends for Italian companies which, this year, increases the sample of companies examined (over 300) belonging to different sectors : the sample of companies examined increased (over 300) belonging to different sectors: 100 companies were analyzed through surveys while a desk analysis on non-financial information was conducted on 203 companies in the country. Five main themes are analyzed: sustainability plans, climate change, supply chain, sustainable finance, circular economy together and social impact.

According to the study, 69% of the companies interviewed envisaged a sustainability plan accompanied by objectives and in 44% of cases (+ 6% compared to the 2019 pre-pandemic year) quantitative targets were formalized, while just 35% of the companies it also defined the relative timescales for achieving the objectives. 15% of the companies analyzed, which do not currently have a sustainability plan, state that they have foreseen its development. On the basis of the desk analysis, however, it emerges that 57% of the companies analyzed provide a qualitative and / or quantitative description of their Sustainability plan (an increase of 7 percentage points compared to 2019).

Following the outbreak of the Covid-19 pandemic, almost 20% of the companies interviewed state that the changed context has accelerated the transition to more sustainable models and in 32% of cases the activities envisaged by the sustainability plan have continued without particular downsizing. However, 12% declare that they have suffered repercussions on the progress of the activities envisaged by the plans, which could lead to a slow recovery and, in some cases, to a possible downsizing of the same.

Strong responses to climate change

In terms of governance, the desk analysis shows that 2/3 of the total companies analyzed have structured a governance committee or body that reports to the Board on sustainability issues (up by about 7 percentage points compared to 59% of the ‘analyzes conducted on 2019 non-financial disclosures). Among the companies that have not structured themselves in this sense, over 7% have in any case activated an internal work group dedicated to non-financial reporting.

79% of companies have defined within their industrial plan significant adaptation and / or mitigation actions to climate change capable of generating reductions in CO2 emissions. Trend down by 5 percentage points compared to 2020, by virtue of the impact of the Covid-19 pandemic which has seen numerous companies forced to review their strategic objectives, including for example the health and safety of employees. Of these companies, 61% have defined emission reduction targets linked to significant changes to the production process or to the business model.

Overall, 53% of companies declare that they have foreseen actions related to climate change within their industrial plan (value up by 21 percentage points compared to 2020), but of these only 19% have a strategic plan aimed at climate neutrality and 35% have already embarked on a decarbonization path unrelated to the decarbonization objectives of the European Union. 31% of the companies in the desk analysis are committed to a sustained reduction in emissions through the definition of quantitative objectives (up by 6 percentage points), the percentage rises to 69% if qualitative objectives are also considered. 14% of the companies in the desk analysis announced a carbon neutrality objective, demonstrating an important acceleration of the commitment of Italian companies in the fight against climate change.

Sustainable attention to the supply chain

From the desk analysis it emerges that 75% of companies define objectives in relation to sustainability issues in the supply chain and almost 1 company out of 2 carries out risk assessment activities on its suppliers: the overall trend is therefore increasing compared to 2019, making a greater awareness of sustainable procurement emerges.

71% of the companies interviewed planned to make changes to their supply chain compared to previous years: specifically 45% with the aim of selecting their suppliers more responsibly, 3% as some stakeholders have made more stringent the selection criteria, 19% for both of the previous reasons.

Also in the second consecutive year characterized by the uncertainty brought about by the pandemic from Covid-19, the main risk is the operational interruption of the supply chain and the main measures implemented by companies to deal with the situation were the activation of new / different methods management of sustainable logistics and optimization of the supply chain.

Financial products and responsible investments

33% of the non-financial disclosures analyzed report initiatives related to sustainable finance, in particular in the Insurance & Banking and ITC & Hi-Tech sectors. Compared to 2019, there has been an 8% growth in the number of initiatives by companies that have launched sustainable finance strategies: it is possible that the greater interest and greater European and international incentives have determined greater importance in the identification of products such as ESG and in their reporting. Among the sustainable investment products, the most widespread are investments in Green / Social impact / Sustainability linked Bonds. The survey also shows that 35% of the companies interviewed state that they have developed responsible investment strategies, of which 18% are signatories to the PRI (Principles for Responsible Investment).

According to the desk analysis, 84% of the sample of listed companies declares that they have implemented initiatives related to sustainable finance, registering an increase of 8% compared to 2019 (51 companies in the sample belonging to the Insurance & Banking sector and, of these, 43 have launched initiatives related to sustainable finance; the others that have launched initiatives related to sustainable finance and do not belong to the Insurance & Banking sector are part of the Automotive & Transport, Energy & Utilities, Engineering & Construction, Ict & Hi- Tech, Industrial and Textile & Apparel). The preference currently remains for the investment of one’s own-funds in funds or securities that integrate ESG characteristics, for Green / Social Impact and Sustainability linked Bonds and finally for credit products that consider ESG criteria.

Circular economy with social impact targets and initiatives

In the sample considered in the desk analysis, 19% (+ 3% compared to the previous year) declare that they have a strategy linked to the circular economy associated with future objectives and targets. The most active sectors are Textile & Apparel, Industrial and Energy & Utilities which together represent 50% of the companies that have defined a circular economy strategy. 46% of companies implement initiatives related to the circular economy but among these only 20% apply a sector or territory approach (going beyond the company perimeter), or more structured.

Among the companies interviewed, 70% declared that in the last two years they have started an analysis of their operating processes for the reduction of the impact and the efficiency of resources. 49% of them involved external entrepreneurial realities in the search for technological-productive solutions, also resorting to previously unknown realities in 12% of cases.

64% of companies have developed initiatives to support communities in solving social problems: a figure down compared to 2019 disclosure (77%); while 7% have foreseen but not yet implemented, a trend substantially in line with 2020. According to the desk analysis, of the 64% of the companies that have launched initiatives dedicated to the community, more than 1/3 identify them by relevance to the mission, vision and corporate values ​​and the needs expressed in a specific territory.

Take advantage of the Pnrr acceleration opportunity

“Sustainability is a path that is moving from a single perspective of energy and ecological transition to a complete transformation of society, companies and people – comments Massimo Antonelli, CEO of EY Italia and Coo of EY Europe West – But only together governments, leaders, companies and consumers will be able to rebuild a virtuous circle of trust that has a positive impact on society. Now it is essential to remain focused on the execution of measurable plans with certain times, taking advantage of the acceleration opportunity offered by the PNRR in Italy. If we manage to be concrete and coherent, we can really make sustainability a pillar of structural growth in the medium and long term “.

For Riccardo Giovannini, EY Italy, Climate Change and Sustainability leader, “more and more companies are aware that the integration of sustainability into business involves strategic planning that includes objectives that are as measurable as possible and the definition of adequate governance. The data collected confirm, not only that large companies are confirmed as leaders in the transition towards sustainable development, but that SMEs are also evolving towards business models increasingly focused on sustainability issues. In fact, our study shows that, despite the pandemic, the changed context did not cause particular impacts in the transition towards more sustainable models for over 1/3 of the companies and even led to an acceleration of the activities envisaged in the sustainability plans for about 20% of the same “.