An observatory to monitor what is happening and what will happen in a young and still evolving sector such as green finance, to study the state of the art of sustainable and responsible investments (SRI) and of entrepreneurial activities linked to ESG (Environmental, Social, Governance) factors. O-Fire, the new scientific centre of the Bicocca University of Milan.
O-Fire comes from the Italian acronym for the observatory, namely Finanza d’impatto e sue ricadute economiche (Impact finance and its economic implications): the academic dimension of the observatory was created to promote the participation of researchers in competitive research projects, to organise seminars, workshops, conferences and other scientific dissemination initiatives, to foster cooperation with companies, institutions and research centres and to promote training programmes on the topics of interest to the observatory.
“We devised a rigorous research activity focused on immediate application in the banking and financial world”, explains Lucia Visconti Parisio, professor of Financial Science at the University of Milan-Bicocca and scientific coordinator of O-Fire.
This initiative touches on one of the fundamental themes of the Milanese university’s strategic plan, enabling it to seek, and ultimately find, the right answers to the new needs and scenarios posed by the financial sector, which will increasingly have to equip itself with tools capable of supporting the ecological transition. In addition, adds the project coordinator, “we are devoting time to examining EU taxonomy to better understand the criteria and activities that qualify an investment as sustainable and the links that these elements have on the performance of companies”.
The university has the knowledge derived from research activity, which must be made usable through an effort of dissemination and adaptation to the productive reality.
Lucia Visconti Parisio, professor of Financial Science at the University of Milan-Bicocca
From a longer-term perspective, the Observatory will study the impact of sustainable investments on the actual decarbonisation process and the effectiveness of different financing channels, with a focus on companies.
O-Fire was conceived through a partnership between the University of Milan-Bicocca, Banca Generali Spa and Aifi (Italian Private Equity, Venture Capital and Private Debt Association). Far from a mere trivial detail: Lucia Visconti Parisio explains that “we jointly share the need to explore the specificities of these types of sustainable investments, i.e. investments that meet ESG criteria, which will play a major role in supporting the decarbonisation process and ensuring the achievement of the European Union’s 2050 targets. Ambitious goals that require major investments, to which the public and private sectors will have to contribute”.
This is why the link between the university, businesses and institutions is so important. “To begin with, the university has the knowledge derived from research activity, which must be made usable through an effort of dissemination and adaptation to the productive reality. Even research which is far removed from reality, such as basic research, can ultimately lead to innovation with the potential to change our lives: for instance, the developments in the field of nuclear fusion, which could bring us a revolution in the production of clean energy within the next three decades”, says Lucia Visconti Parisio.
The relationship with the manufacturing world serves to intercept new needs in terms of human capital training and therefore to create new study paths to meet these needs and to renew existing ones.
From another point of view, however, the university plays the role of the primary provider of advanced training. The professor further explains that “the relationship with the manufacturing world serves to intercept new needs in terms of human capital training and therefore to create new study paths to meet these needs and to renew existing ones”.
Sustainable finance, responsible investment, compliance with environmental, social and governance standards, decarbonisation, are issues that will drive the technological, social and global development of the world of work in the coming years. It will be increasingly important to be able to work on skills and knowledge of this kind at university level and to create a training centre for the younger generation on these issues.
When it comes to environmental issues, sustainability and decarbonisation, however, raising public awareness is crucial.
At least in this, in Italy, there seems to be a good degree of preparation: Lucia Visconti Parisio adds that she sees “a lot of attention, both in the financial sector and among citizens and institutions. The younger generation in particular is being educated to take a very careful and responsible view of environmental and other aspects. A great deal of attention is also paid to the other sustainability criteria for a fairer, more inclusive and more rights-based world. The next step is to make people understand that profitability is not the only way to measure the worthiness of an investment; as an investor, I can receive a lower return if I am certain that the capital invested is being used to finance activities that increase the collective wellbeing”.