Financial, Sustainable Investments, Cryptocurrency Assets, Trends
Consob’s annual report ‘Main trends in sustainable investments and crypto-assets’
The high volatility of cryptocurrencies is increasingly characterized as a structural fact of this type of asset, whose market value, in September 2023, was more than 50% lower than that at the end of 2021.
There also remains a high vulnerability to cyberattacks, with approximately $3.8 billion stolen globally in hacker attacks in 2022, up from $3.3 billion the previous year.
These are some of the most significant data from Consob’s annual report ‘Main trends in sustainable investments and crypto-assets’, now in its second edition. The same survey also confirms the tendency of euro area companies to have a greater ability to manage their exposure to ESG risks.
Cryptoactivity
In September 2023, the annualized return of bitcoin (which together with ether represents over 60% of the market value of cryptocurrencies) was only slightly higher than those of other categories of non-digital assets, in the face of greater risk-taking due to extreme price volatility. The same volatility is also found in inactive cryptocurrencies, i.e. those that have not been the subject of transactions in the last year, at values close to 60% and 70% for bitcoin and ether respectively.
Then, the critical issue posed by cyber security remains: only a clear minority of cryptocurrency exchange platforms (14 out of 188) can be considered ‘very safe’. Furthermore, compared to 2022, the share of platforms with poor cyber security ratings increases.
Sustainable investments
The Sustainalytics ESG Risk Score, an index that helps investors identify ESG risks, records a trend increase in the ability of euro area companies to manage ESG risks, i.e. those linked to the environment, social aspects and those of corporate governance. businesses. At a sector level, exposure to ESG risks is higher on average for utilities and energy producers than for manufacturing or service companies.
In Italy, the ESG Risk Scores are in line with the values recorded in the Eurozone countries, even if the exposure of financial companies to ESG risks is higher on average than non-financial companies.
The 2023 Report includes a focus on companies listed in Italy, aimed at verifying whether the ESG risk score and the ESG Refinitiv rating (a measure of the ESG performance of companies) are correlated with some of the main characteristics of companies (such as performance, volatility , liquidity, leverage, capitalization, price to book value or price on earnings).
From the focus it emerges that the group of companies that present a higher sustainability score is represented by companies with greater liquidity and capitalisation, while there are no significant differences between the two groups in terms of performance, volatility and market valuations.
November 20, 2023
Consob source
