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Italy4Innovation – Impact Investments

The first Italy4Innovation event of 2020 was dedicated to impact investment, a theme closely linked to sustainability. This type of investment is, as Ambassador Raffaele Trombetta explained in his opening address, a conscious choice for Italy, in the year in which it co-chairs COP26 with the UK.

Impact investment is a relatively new area of finance, but it is growing exponentially. Professor Mario Calderini of the Milan Polytechnic, an expert on the matter, noted that both the UK and Italy are leaders in the field. He explained the core principles of impact investment – intentionality, measurability and additionality – and the inevitable trade-off between financial profitability and social impact.

This was followed by a panel discussion comparing practices in Italy and the UK, brilliantly moderated by Irene Mia of the Economist, with panelists Victoria Quinlan of LendLease, James Broderick of Impact Investing Institute, Marco Gerevini of the Fondazione Housing Sociale and Riccarda Zezza, founder and CEO of Life Based Value.

Although still in its early stages, the sector in Italy is growing steadily and has excellent prospects thanks to factors such as its banking foundations, the non-profit culture, widespread social entrepreneurship and the “benefit corporation” model. The panellists noted that while the private sector plays a crucial role, action by the state is equally necessary, through regulatory interventions, policies and funding.

One particular challenge for the sector is the inappropriate and opportunistic use of the term “impact investing” for instruments and actions that, although they have a positive social impact, do not, strictly speaking, belong to the sector. Another is the difficulty of scientifically measuring the social impact of an investment on a community – an issue that affects the entire field of green finance and that still requires parameters, criteria and metrics to be clearly defined.

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