Can Dario Scannapieco Save Italy?
With the myriad of problems facing Italy’s economy, sceptics are questioning the ability of the country’s most important public financial institution to step up to the challenges.
Concerns about the country’s economic future are well-founded. With several of the country’s core industries in desperate need of capital and many social projects in neglect, it’s no wonder the hurdles seem overwhelming. There are many crucial needs that have gone unaddressed for far too long. The most pressing include bridging the gap between the north and south of the country, developing sustainable growth strategies, and supporting business growth, all while reducing pollution outputs that tend to be a natural consequence of infrastructure and business growth.
But Dario Scannapieco, the CEO of Cassa Depositi e Prestiti (CDP), is under no illusions. The seasoned banker at CDP’s helm is quite aware of what stands in front of him.
Founded in 1850, Cassa Depositi e Prestiti is one of Italy’s oldest and most prestigious public banks. CDP was originally charged with managing the funding of public works and over the past several years, the bank’s position in Italian society has become even more pronounced. Today, CDP plays a major role in funding infrastructure, research, and technological innovation.
Being the country’s most important capital investment bank, the current economic crisis in Italy has fallen largely on the shoulders of this legacy institution.
Dario Scannapieco was hand-picked by the country’s elected officials to tackle these challenges. Scannapieco has ample experience leading major financial institutions having served as the Vice President of the European Investment Bank for over a decade. The five years that Scannapieco directed privatizations at the Ministry of Economy and Finance made him intimately familiar with the governmental side of finance in Italy.
But credentials alone are not what brought Scannapieco to his current position. What’s made Scannapieco stand out is his keen understanding of the obstacles currently facing Italy.
Indeed, Scannapieco has been speaking out on the nexus of environmental, financial, and infrastructural problems facing monetary policymakers for years. Back in 2019, Scannapieco was already warning about the wide range of compounding pressures on capital. In an interview on environmentalism and global business growth, Scannapieco spoke about how demographics, climate, and increasing energy demands “are exacerbating strains” on public investment. “Significant investments are needed for the focused management of resources,” said Scannapieco, noting how neglect in this area has led to huge economic (not to mention environmental) waste.
Scannapieco has also been a strong advocate of social infrastructure planning at the government level. Similarly, he regularly criticized policies that ignored urban development and investment in upcoming sectors. In public appearances, Scannapieco said that the lack of forward-thinking creates unnecessary competition for resources between cities and the rural countryside. Scannapieco has also been sounding the alarm on environmental threats vis-à-vis global markets, calling climate change a generator of “unsustainable trends” in business.
From the Italian government’s perspective, the issues cited over the years by Scannapieco have turned out to be near prophesying, as they comprise the very challenges that lie at the root of the country’s current crisis. Scannapieco’s demonstrated insight into the interconnectivity of these global systems is what pushed Rome to appoint him CEO back in 2021.
Since entering the position, Scannapieco has wasted no time developing a plan of action. Last year, CDP laid out its strategic plan based on three pillars: sectoral analysis, advisory and technical assistance, and expanding its Promotional Development Institute. To tackle these goals, CDP allocated an additional $65 billion in support of activable investments and revamped its environmental, social, and corporate governance (ESG) principles to optimize the selection process for investment projects. To make CDP more efficient on the ESG front, Scannapieco directed the bank to strengthen its own technical evaluation capacity for assessing the alignment of projects with ESG standards. CDP is also partnering with third-party organizations specializing in environmental and governance assessment.
Scannapieco has also invested heavily in real estate development–an area that’s been on his own radar for years and is now a pressing issue for Italy’s overall economy. Scannapieco’s plan mandates a “focus on urban and social regeneration, senior and student housing.” These urban regeneration operations will have a special focus on southern Italy.
Scannapieco is also correcting CDP’s outdated shareholdership model. CDP has backed away from sole investor approaches, instead adopting what Scannapieco calls the “crowding-in principle” to attract resources from a range of investors. This move will allow projects orchestrated by CDP to remain more financially stable over time and ultimately garner more trust from markets. The use of diversification as a stabilizing force has also been applied to the types of projects CDP takes on. According to the latest reports from the bank, CDP is diversifying its spreading into an ever-growing array of sectors, with stakes in clean alternative energies, local agricultural, and manufacturing chains.
The targeted changes put into place by Scannapieco are producing tangible results. According to Italian media, the €80 billion in capital investment recently activated by the bank has delivered a 1.7% increase in the country’s GDP.
CDP’s momentum is also attracting other development partners internationally. In January, CDP initiated a partnership with the European Bank for Reconstruction and Development (EBRD) designed to increase the reach of Italian companies throughout Europe.
The challenges facing Scannapieco, and the bank are, no doubt, formidable. But with its increased resource allocation, ESG-guided plan, and refocusing efforts on the most promising industries, CDP is showing it is more than capable of handling the pressure and doing what is necessary for Italy to prosper.