Building Bridges summons stakeholders and sets the course for 2022
The 2nd meeting of the Building Bridges movement took place in Geneva from 29 November – 2 December 2021, ending a month that was particularly busy in the field of sustainable finance. On the international scale, COP26 in Glasgow called on the financial sector more than ever to join the fight against climate change in particular by launching the Glasgow Financial Alliance for Net Zero (GFANZ), which enables net-zero finance initiatives to be brought together in one sector-wide coalition. On the national scale, Switzerland's Federal Council spoke out in favour of developing a methodology for temperature alignment for portfolios and of using labelling for climate transparency.
Summit opened by Federal Council Ueli Maurer and Amina Mohammed
In a context marred by uncertainty and in a nod to the coronavirus pandemic, the summit started the week off smoothly in a hybrid format, which allowed all participants to convene in the same hall. The morning programme included in particular an address by Ueli Maurer, Federal Councillor in charge of the Swiss Federal Department of Finance, and by Amina Mohammed, Deputy Secretary-General of the United Nations - together a strong sign of support for multilateralism when it comes to sustainability. They were followed by numerous panel discussions focusing on the themes on this year's agenda: impact and transparency, the mismatch between the supply of and demand for sustainable financial services, and the role of fintech in attaining the Sustainable Development Goals (SDGs).
The main objective of Building Bridges remained unchanged: to accomplish the UN's Agenda 2030 by the year 2030 and to allow the financial sector and the public authorities to redirect the funds needed to do so as well as to comply with the Paris Climate Agreement. To this end, the second edition of the Building Bridges initiative was to serve as a catalyst for concrete action and commitments. Apart from intensifying dialogue between the financial community and UN organisations, the goal was also to give the gathering an international scope while intensifying exchanges with the real economy, which is a precondition for a quick and successful transition.
Individual actions, but no major announcement
In terms of specific commitments announced in connection with Building Bridges, the Swiss Sustainable Finance (SFF) has published a new roadmap containing fifty-seven actions divided up into four pillars of activity: establishment of standards, development of transparency, innovation, and dialogue and education. The SECO, in turn, deployed CHF 19.5 million to launch the SDG impact finance initiative, a new programme designed to encourage impact finance, while the Asset Management Association Switzerland (AMAS) joined forces with the SSF to publish recommendations for minimum requirements applicable to sustainable finance products that are destined to build up investor confidence and to better align the different investment approaches with investors' objectives.
A roadmap for 2022
Additionally, in his closing address Patrick Odier, President of Building Bridges, spoke out in support of four objectives which he considers to be attainable by 2022 and which define the short-term roadmap that Building Bridges follows. In so doing he urged the Swiss financial centre to commit to the net zero objective and also to abandon coal, put an end to the financing of deforestation and implement temperature metrics for client portfolios, thereby following the lead of the Federal Council and TCFD recommendations. Dynamics were thus set in motion in Geneva, and the Building Bridges initiative has become a vital meeting point for the sustainable finance community. It should be added, however, that the echo beyond Switzerland to other parts of the globe was limited, with media coverage remaining muted.
Financing the Swiss climate transition
The ASB, as a founding member of the initiative, also hosted an event during the Building Bridges Week entitled "Transition financing: the role of private sector financing in climate change mitigation", which followed up on a joint study conducted with Boston Consulting Group on financing the transition of the Swiss economy towards carbon neutrality by the year 2050. Daniela Stoffel, State Secretary for International Finance, and Nathan Fabian, Chair of the European Platform on Sustainable Finance and Chief Responsible Investment Officer at the PRI, thereby had an opportunity to express their views during two addresses. The means for implementing this transition were then discussed by a panel comprised of Christian Ossig, Chairman of the Executive Committee of the European Banking Federation, Catherine McGuinness, Chair of the Policy & Resources Committee of the City of London, Sonia Seneviratne, Professor for Land-Climate Dynamics at ETH Zurich, and Jörg Gasser, CEO of the ASB. The panel participants concluded that financing the transition must not only be up to the public authorities and that the private sector needs to play a key role in the EU and also in Switzerland, where 91% of financing needs can be met by banks in the form of loans or via the capital market. The economic structure and the various industries represented in each country also play a pivotal role in the financing structure as well as for those set to contribute.
Conceived as an annual get-together at the front lines of a larger movement, Building Bridges Week will return at the end of 2022 to take stock of the progress made and to guide all stakeholders towards results and commitments that are both solid and coordinated.