”, markets, infrastructures, payment systems, 14, december 2021. as part of the investments in government bonds, there is a small but not negligible thematic portfolio of green bonds, financing projects with environmental sustainability objectives. for all asset classes, the bank assesses their sustainability results annually. 18 finally, the bank has also adopted an environmental policy to reduce the ecological footprint of its activities. overall, in 2020 the bank reported a 28 per cent decrease in total carbon dioxide emissions compared with the previous year, a 5. 6 per cent reduction in electricity consumption and a 14. 5 per cent reduction in water consumption, mainly as a consequence of remote working. 19 together with the ecb and the other eurosystem central banks, banca d ’ italia contributes to reducing the environmental impact of the production, distribution, recirculation and disposal of euro banknotes. in line with central banks ’ best practices, in 2020, 90 per cent of shredded banknotes was sent to waste - to - energy plants or installations for the production of secondary solid fuel. conclusions let me conclude by saying that green finance is also an intellectual challenge, requiring us to add the new knowledge and information stemming from other scientific fields to our typical financial and economic background. the urgency of addressing climate issues is increasingly felt by financial institutions, investors, and governments, which hold the primary responsibility in leading change. central banks are all contributing and will further innovate their actions. in this journey, still very long, and fraught with obstacles, all players are aware of having to play their part, without delays and half measures. i. faiella, e. bernardini, j. di giampaolo, m. fruzzetti, s. letta, r. loffredo and d. nasti, “ climate and environmental risks : measuring the exposure of investments ”, markets, infrastructures, payment systems, 15, december 2021. bank of italy, " environment report 2021 ". available at : https : / / www. bancaditalia. it / pubblicazioni / rapporto - ambientale / 2021 - rapporto - ambientale / environment _ report _ 2021. pdf? language _ id = 1 designed by the printing and publishing division of the bank of italy

the market, the economic system works well. these ideas are very old, dating back at least to joseph schumpeter ’ s ‘ creative destruction ’ and they are now an intrinsic part of empirical analyses from all around the world. indeed, thanks to the efforts of several scholars and research centres, among which i would like to thank the oecd researchers that conducted the seminal firmdyn project, we now have a lot of comparable data on firms ’ entry, growth and exit from the market, over their entire age distribution, in each national system. these country - level indicators are of course deeply affected by business environments and policies. for instance, entry barriers and direct or indirect public subsidies to firms in trouble can alleviate the welfare costs of crises in the short term, but may have long - term negative effects on firm selection and economic growth. to take another example, if the judiciary works badly and private contracts are difficult to enforce, incumbents have a clear advantage over entrants. finally, if the political system works badly, some firms may escape competition thanks to their political connections. finance also plays a role in shaping firm dynamics. new businesses need money, which can ’ t always be provided by banks, because of the riskiness of the venture and the scarcity of collateral. venture capitalists are the right answer, yet their contribution is quite varied across countries. technological improvements, for which the fintech label is a proxy, are now filling these gaps, but the process is uncertain and uneven. for now, at least in some countries, new and young firms have to rely on bank credit and face tight capital constraints. if we leave aside cross - country differences and do some time - series analyses, we notice a decline in business dynamism since the early 2000s all over the world : for most oecd countries, new firms ’ entry rates are now significantly lower than at the beginning of the century. what are the causes of this phenomenon? one may be the possible increased market power of incumbents. another may be the fact that technological change and globalization increase the ability of more productive firms to gain market share. these two possible explanations have markedly different policy implications. the scientific debate is currently ongoing, and during this workshop other possible explanations will be discussed in depth by several presenters. recent research has highlighted how firm dynamics may have a role in explaining not only long - term potential growth but also business cycle fluctuations. the procyclicality of entry rates could be driven by