WP 122 | 22 The integration of sustainability in banking: from “greedy” to “green” finance

This paper is part of the literature that recognizes the crucial role of ethical valuation in the financial sector and investigates aspects related to the social and environmental impact of economic activities. These must be closely complementary to traditional valuation, which cannot be the sole benchmark for the investor, and aims to take stock of the state of the art of impact finance, in Italy and Europe, in light of the COVID-19 pandemic. Interest in the topic has been validated by the recent transition of mainstream finance to a model compatible with urgent emerging environmental and social challenges, which has provoked a rethinking of management models and aims to generate social, as well as economic, value by restoring a more positive relationship with society, communities and the environment. In this context, Europe plays a leading role based on a well-established social culture and a growing focus on innovation in the field of inclusive finance regulation: it has emerged as by far the most important developed and diversified ESG (environmental, social, governance) market and continues to dominate sustainable investments and host the majority of sustainable funds and assets.