Sustainable finance is growing, but Italians remain cautious
Between greenwashing and low financial literacy
Sustainable investing is one of the most promising frontiers of today’s financial landscape.
Yet in Italy, only 1 in 10 people invests in ESG (Environmental, Social, Governance) funds.
This paradox stems from specific structural factors: low financial literacy and a lack of trust in the true sustainability of these funds, often exacerbated by greenwashing cases.
Italian listed companies are increasingly improving ESG reporting in response to EU regulations, but the risk of misleading communication remains high.
To counter this, Consob is testing Artificial Intelligence tools to identify deceptive statements in “green” fund documents.
Despite the challenges, the transition to sustainable finance remains one of the most significant opportunities for investors and markets, supported by EU regulations and growing financial awareness.
How to Read “Green” Labels in Finance
Clarity and transparency are the first requirements of sustainable finance.
The European Union has developed an ambitious regulatory framework to help investors detect misleading practices.
Key regulatory tools include:
- EU Taxonomy Regulation, which defines when an economic activity can be considered “environmentally sustainable”.
- SFDR (Sustainable Finance Disclosure Regulation), which imposes transparency requirements and classifies products based on their ESG ambition.
- CSRD (Corporate Sustainability Reporting Directive), which extends the scope of companies required to report on sustainability, introducing the principle of double materiality (external risks and internal impacts).
These regulations aim to restore trust in ESG funds and limit greenwashing practices.
The Contradictions of Greenwashing
Greenwashing involves misleading or overstating the environmental or social credentials of a product or company, while hiding its negative impacts.
A classic example: a company investing in reforestation campaigns while continuing to heavily pollute its supply chain.
Since this practice undermines consumer and investor trust, it is being met with increasing regulatory severity.
In Italy, the Competition and Market Authority (AGCM) has already sanctioned companies for building a “green” image without proper transparency.
The consequences can be serious: reputational damage, financial penalties, and potential losses due to declining stock value.
That’s why CONSOB, in partnership with the University of Trento, is experimenting with Artificial Intelligence (AI) to detect unfounded environmental claims, reinforcing market trust.
The Challenges of the Transition – and What Happens If We Ignore ESG
While there’s growing awareness around fighting greenwashing, fully adopting ESG remains a challenge for Italian companies—especially SMEs, which form the backbone of the national economy.
There are still many obstacles to a comprehensive and informed adoption of this new financial approach. These include:
- High transition costs involved in shifting to sustainable practices
- Lack of skills and reliable data, making it difficult for many companies to collect solid, accurate, and verifiable ESG data
Another critical issue is the difficulty in measuring ROI (Return on Investment). One-third of Italian companies say they struggle to calculate it, making it hard to justify long-term ESG spending.
However, the greatest risk for companies that ignore ESG is losing competitiveness and access to capital.
Capital is increasingly flowing toward sustainable assets, and non-compliant firms risk being excluded from financing opportunities or facing higher borrowing costs.
ESG in Everyday Life: Not Just Investing, but Lifestyle Choices
A fundamental feature of ESG is that its logic should extend to everyday consumption choices, shaping citizens’ daily lives as well.
Choosing to buy energy from renewable sources, supporting companies with ethical supply chains, or trusting institutions with transparent governance and communication—these are all decisions guided by ESG principles.
Consumers and citizens, through their spending power and opinions, are the final catalysts of this transition.
When investment decisions align with consumption habits, the impact is amplified, pushing companies to turn sustainability from a mere marketing claim into a real value-creation strategy for stakeholders and the planet.
Despite its grey areas and ongoing challenges, sustainable finance is the only viable path to address the environmental and social crises of our time.
Only by integrating ESG criteria into economic and financial decision-making can we build a more resilient, inclusive, and robust economy, ready to tackle increasingly complex transformations.