Whatever the sceptics say, sustainable finance is alive and well 

It hardly comes as a surprise that the media reports of a backlash against sustainable investment products and solutions seen over the past few months are petering out. All media hype comes to an end sooner or later. As ever, looking calmly at the underlying facts helps us to understand long-term trends. With this in mind, what can we observe as regards sustainable finance?

EU still on course 

The EU is currently working very hard to push its Omnibus package of regulation through in short order. This is aimed at reining in bureaucracy, which had started to spiral out of control as a result of the uncoordinated sustainability regulation passed under the Green Deal. While this is admittedly not an ideal approach, it does prove that the EU is capable of correcting its own mistakes relatively quickly. It is especially interesting to note the response from business: only a few isolated voices are calling for the whole framework to be torn up. Instead, a consensus between the financial sector and the real economy is rapidly emerging as to what is needed and what is actually feasible.

Federal Council awaiting further developments 

This of course has a direct impact on regulation in Switzerland. At its meeting on 21 March 2025, the Federal Council decided that it will only amend the current legislation on environmental protection and human rights for companies “once the EU has made a decision on the announced simplifications, but no later than spring 2026”. This is certainly the right way to go in order to avoid a costly “Swiss finish”.

Self-regulation starting to bear fruit 

However, this wait-and-see stance does not mean that sustainable finance in Switzerland has come to a standstill. On the contrary, the self-regulation issued by the SBA, the Asset Management Association Switzerland and the Swiss Insurance Association to prevent greenwashing is currently being implemented by the respective associations’ members. The results of the study on banks recording sustainability preferences published on 10 June 2025 by Lucerne University of Applied Sciences and Arts suggest that this pragmatic approach is not only simpler than the EU’s but also more expedient. Among the 14 banks surveyed, an average of 47% of clients expressed a preference for investment solutions that take account of environmental, social and governance (ESG) aspects, although the percentage at individual banks varies considerably between 20% and 90%. This corresponds with the results of nationwide surveys of investment clients, leading to the conclusion that banks are doing a good job of recording their clients’ needs thanks to the self-regulation. In stark contrast, the figures recorded in relation to querying sustainability preferences in line with EU law (the Markets in Financial Instruments Directive or MiFID II) range from 5% to 20%. We can therefore assume that the Swiss self-regulation is much more needs-oriented and practicable than the EU rules.  

Matching words with deeds 

What do the ESG preferences clients have expressed mean in strictly financial terms? A market study by Swiss Sustainable Finance comes to a very clear conclusion in this regard: sustainable investment assets in Switzerland rose by 13% in 2024, with the corresponding figures up 17% for funds and 19% for mandates (including institutional clients). How do asset managers explain this growth? They attribute it first and foremost to client demand (83%), followed by (self-)regulation (73%) or banks actively addressing the subject, which provides an additional incentive to offer a range of suitable products. Retail investors in particular stepped up their interest last year, probably as a result of the self-regulation, with their share rising to 33% after holding steady at 28% for the previous four years. Of course, all of this is still not definitive proof, but taken in conjunction with the other factors, it does tell us that sustainable finance has become firmly established across a broad front and is set to keep growing in view of its adaptability – whatever the sceptics say. 

Bank: Share of clients who expressed ESG preferences 
14: No data 
Share of clients with ESG preferences at banks surveyed. Source: B. Mattmann, M. Stüttgen, N. Berchtold (2025)