Two sides of the same coin: Green Taxonomy alignment versus transition risk in financial portfolios

We develop the first top-down method to estimate the greenness of financial portfolios, in terms of alignment to the EU Taxonomy for sustainable activities. We also develop a method to estimate, at the same time, the portfolio exposure to climate transition risk. We provide sector-level, standardized and transparent coefficients for both estimates, based on definitions of greenness and transition risk that are applicable across countries. We analyse the portfolios of Euro Area investors in 2022, based on the confidential Securities Holdings Statistics of the European Central Bank. We find that, overall, the greenness of Euro Area investors’ portfolios is lower than their exposure to transition risk (2.8% vs. 11.7%). Across financial institutions, we estimate greenness and exposure to transition risk, respectively, at 3.2% and 12% for investment funds, at 0.8% and 5% for banks and at 4.8% and 15.1% for insurers. Our analysis also shows that investors with large amounts invested in green activities can have at the same time large exposures to transition risk

Taxonomy-alignment and transition risk: a country-level approach

When firm-level information is not available, the greenness of financial portfolios, in terms of alignment to the EU Taxonomy, and their exposure to climate-related transition risk need to be estimated with a top-down approach. We improve the accuracy of available estimates by providing country-specific coefficients for both dimensions, based on homogeneous definitions of greenness and transition risk across countries. An application on confidential data from the European Central Bank shows that the exposure to transition risk of less regulated financial institutions has more than tripled from 2014 to 2023. Moreover, we show that the levels of Taxonomy alignment and transition risk exposure are largely heterogeneous across countries and sectors

The EU Sustainability Taxonomy: a Financial Impact Assessment

The European Commission set up a Technical Expert Group on Sustainable Finance (TEG) to support the implementation of the Commission’s Action Plan on Financing Sustainable Growth. Among other tasks, the TEG was mandated to develop recommendations for technical screening criteria regarding economic activities that make a substantive contribution to climate change mitigation or adaptation, i.e. the so-called Taxonomy. This report carries out a financial impact assessment of the Taxonomy. To do so, we first provide an overview of available estimates of additional investment, which is needed to achieve the targets associated with the low-carbon transition under various scenarios, at the macroeconomic level. Then, we focus on the financial dimension. In particular, we use security-by-security data covering the whole European bond and equity markets to provide a picture of where European financial markets stand with respect to the low-carbon transition. In this respect, we also provide estimates of financial investments currently supporting Taxonomy-compliant activities. Finally, we estimate the additional financial investment needed to allow the EU to reach its targeted reduction in carbon emissions. We conclude that the increased financial investments towards relevant sectors appear to be within reach. e.g. • The updated Taxonomy-alignment tool is available below for download. Any document, be it published or internal, using any part of this methodology should cite Alessi, L., Battiston, S., Melo, A. S., & Roncoroni, A. (2019). • The EU Sustainability Taxonomy: a financial impact assessment. JRC Technical Reports. https://doi.org/10.2760/347810JRC.B.1-Finance and Econom

Acute Delta Hepatitis in Italy spanning three decades (1991–2019): Evidence for the effectiveness of the hepatitis B vaccination campaign

Updated incidence data of acute Delta virus hepatitis (HDV) are lacking worldwide. Our aim was to evaluate incidence of and risk factors for acute HDV in Italy after the introduction of the compulsory vaccination against hepatitis B virus (HBV) in 1991. Data were obtained from the National Surveillance System of acute viral hepatitis (SEIEVA). Independent predictors of HDV were assessed by logistic-regression analysis. The incidence of acute HDV per 1-million population declined from 3.2 cases in 1987 to 0.04 in 2019, parallel to that of acute HBV per 100,000 from 10.0 to 0.39 cases during the same period. The median age of cases increased from 27 years in the decade 1991-1999 to 44 years in the decade 2010-2019 (p < .001). Over the same period, the male/female ratio decreased from 3.8 to 2.1, the proportion of coinfections increased from 55% to 75% (p = .003) and that of HBsAg positive acute hepatitis tested for by IgM anti-HDV linearly decreased from 50.1% to 34.1% (p < .001). People born abroad accounted for 24.6% of cases in 2004-2010 and 32.1% in 2011-2019. In the period 2010-2019, risky sexual behaviour (O.R. 4.2; 95%CI: 1.4-12.8) was the sole independent predictor of acute HDV; conversely intravenous drug use was no longer associated (O.R. 1.25; 95%CI: 0.15-10.22) with this. In conclusion, HBV vaccination was an effective measure to control acute HDV. Intravenous drug use is no longer an efficient mode of HDV spread. Testing for IgM-anti HDV is a grey area requiring alert. Acute HDV in foreigners should be monitored in the years to come

Over with carbon? Investors’ reaction to the Paris Agreement and the US withdrawal

How financial investors may react to policy events related to sustainability and climate change mitigation in particular, is a key question with implications for sustainable finance and financial stability. We address this question by carrying out a multi-period difference-in-difference approach on a confidential database of securities holdings of the European Central Bank, and we provide evidence of several effects related to the Paris Agreement. In aggregate, investors reduced their participation in the equities of high-carbon firms in response to the agreement, and the trend reverted after the US’s announcement of withdrawal from the agreement. However, the reaction varies across categories and geographies of the securities holders, their ownership size, and the emissions of owned firms. In particular, transition risk has been taken up by less regulated financial institutions and the BRIC countries. Our results highlight that the redirection of global financial flows towards climate action requires clear and unanimous signals from the global community of policy makers

Morphisms and minimal models for OBJSA nets

OBJSA nets are a design specifications language for distributed systems, combining the specification language OBJ with Superposed Automata (SA) nets. The paper introduces the notions of morphism and isomorphism for OBJSA net systems and shows that any OBJSA net system can be reduced to a unique minimal model. This allows the definition of equivalence classes of OBJSA models. A net semantics for OBJSA net systems, in terms of 1-safe SA net systems, and algebraic semantics, in terms of OBJ3 objects, are given and it is proved that all the unfoldings, and, respectively, all the algebraic specifications of OBJSA models belonging to the same class are isomorphic

Specific sequence-directed anti-bilitranslocase antibodies as a tool to detect potentially bilirubin-binding proteins in different tissues of the rat

AbstractThe hypothesis that the uneven distribution of bilirubin in the organism, which occurs in hyperbilirubinemia, could reflect an uneven distribution of bilirubin-binding proteins was tested by searching for peptides containing the bilirubin-binding motif identified in bilitranslocase (Battiston et al., 1998). In the rat, positive proteins bands were found to be present only in the liver, gastric mucosa and central nervous system. The electrophoretic mobilities of the positive compounds in the liver and stomach were identical to that of purified bilitranslocase (38 kDa). In the brain, on the contrary, two peptides were found with molecular masses of 79 and 34 kDa, respectively. Their distribution pattern in the central nervous system was different for each of them