Pension funds and environmental, social and governance factors in the Italian system: transparency of investments, management rules and the new ban on financing activities linked to unconventional anti-personnel weapons

This paper considers the regulatory framework on sustainable investments, i.e. consistent with so-called ESG factors, with particular regard to Italian supplementary pensions. The first part of the paper offers an overview of recent developments in the stratified European and Italian legislation, showing the high degree of detail of the disclosure obligations binding institutional investors to protect the public and in particular pension fund members. The second part of the paper delves into a specificity of the Italian legal system relating to the armaments sector: the 2025 ban on financing companies operating in the anti-personnel mine and cluster bomb sector. This ban, applicable to all Italian institutional investors and the Italian branches of institutions headquartered abroad, requires a delicate investigation and advisory activity on each share and bond held by the pension fund, as well as the those planned for acquisition. Given the vagueness of the instructions formalised by the Italian supervisory authorities, the implementation of this law appears to require a strengthening of the flow of information between the governing bodies of each pension fund and the financial manager appointed to handle the portfolio.