Pension funds and insurance companies snatched up the largest share of green bonds (14.3%) issued by the Italian government among the investors with a long-term investment horizon, the Finance Ministry said in a note.
Central banks and government institutions bought the remaining 10% of the total 24.3% of the green bonds allocated to long-term financial investors, it added.
Hedge funds secured 3.6%, while fund managers acquired 53.1% of the total green bonds issued, with banks underwriting 18.5%.
A total of 530 investors took part in the offering for a demand that reached a record level for the inaugural issuance of sovereign green bonds in Europe of over €80bn. ESG investors subscribed to more than half of the placement.
Foreign investors took over 73.7% of the BTP Green, as the Italian sovereign green bond is called, while Italian investors 26.3%. Investors in the UK accounted for the largest share of the placement (22.1%), with Germany, Austria and Switzerland taking 19.9%, and France 10.1%.
Investors located in the Iberian Peninsula took 7.3% of the green bond share, with Scandinavian taking 5.1%, and other European countries including Benelux taking 2.1%. Outside Europe, investors from the US subscribed to 1.9% of the total issuance, and 0.5% went to Asian investors.
Pegaso – The contractual pension fund for employees in the utilities sector will gradually integrate an “active shareholding” approach onto its ESG asset management strategy.
The fund clarified in a statement that at the moment it has not finalised the details of an engagement policy that integrates voting rights into its investment strategy.
Pegaso has yet to exercise its voting rights or proxy voting privileges, but it has started to assess the implications of such rights in shareholders’ meetings of investee companies, it said.
The fund periodically monitors investee companies with regard to the impact of their business activities on ESG aspects. It conducts engagement activities independently, or in partnership with other funds.
Its sustainable policy is based on six principles, including ESG integration into investment activities, active shareholding, transparency, promoting the principles in the financial sector, cooperating to effectively applying the principles, and communicating the progress made on putting principles into practice.
FondoPoste – The board of directors of the pension fund for Italian postal workers has decided against exercising an engagement approach on ESG issues for 2021.
The fund is aware that exercising its voting right, which is one aspect of its engagement policy on ESG, is in the interest of its members, and in the interest of the fund itself as a responsible investor because it mitigates financial and non-financial risks.
For this reason, it is conducting an in-depth study to integrate an engagement policy in its investment activities within the next year.
COVIP, the Italian pension funds regulator, published in December a series of rules on the transparency of engagement policies and pension funds’ investment strategies.
Fondoposte has not yet adopted its own engagement and voting policy, believing that it should not be a decision based on “mere regulatory compliance”, but a choice of its governing bodies, it said in the statement.
Alifond – The second-pillar scheme for employees of the Italian food industry has also decided not to adopt an engagement policy on ESG for 2021.
The fund will assess weather to adopt an effective engagement policy in the future following discussions with asset managers.
Alifond does mandate its current managers to take ESG criteria into account. The managers should conduct investment activities in line with Alifond’s sustainability policy.
The fund monitors its investments’ sustainability aspects to comply with the IORP II directive, it said.