According to the report, the Bank of Italy is joining other central banks in creating investment criteria that reward green actions in an effort to get banks and money managers to be more environmentally friendly. By the end of June, the new criteria will apply to about $8.9 billion in shareholdings. It will be extended to its corporate bond holding at a later time, reported Reuters, citing the Bank of Italy. The central bank didn’t say when the standards would apply to corporate bonds in its portfolio.

Bank of Italy is part of the Network for Greening the Financial System, which is a group which views climate change as impacting financial stability. The Bank of Italy plans to name an independent adviser which will help the central bank find companies that are top performers in terms of the environment, social issues and governance. Companies in its portfolio have to have greenhouse emission of 23 percent and energy and water consumption of 30 percent and 17 percent respectively, reported Reuters. Firms that don’t adopt the U.N. principles on human rights, labor, environment and anti-corruption will be excluded, noted the report.

In late March new global standards were put in place by the Loan Market Association, the Loan Syndications and Trading Association and the Asia Pacific Loan Market Association aiming to increase the number of borrowers for green loans. Sustainability-linked loans are ones that give borrowers an incentive to reduce margins or increase them depending on their ability to meet environmental performance targets that are preset. A big difference between sustainability-linked loans and green loans is that sustainability loans can be used for general corporate purposes instead of specific projects.