New economiesuisse sustainable finance principles – financial centre on right track
Swiss business, under the leadership of economiesuisse and representatives of both the real economy and the financial sector, has drawn up six overarching principles of sustainable finance. These are intended to help Switzerland make the most of the opportunities arising in this field and build further on its position as a leader in business, financial and climate matters. At the same time, the principles should prevent the need for excessive regulation and thus the risk of additional bureaucracy and high transaction costs. The Swiss Bankers Association (SBA) welcomes economiesuisse’s six principles, which underscore the importance of sustainable finance. It believes that the financial centre is on the right track with the action plan announced by the SBA in March 2022.
The six principles that economiesuisse hopes will secure the long-term success of Swiss business and the Swiss financial centre are based on a shared understanding of (1.) comprehensive sustainability. Instead of banning specific activities, Swiss business favours (2.) a market-driven and evidence-based approach to sustainable finance and aims to (3.) minimise transaction costs through transparency and comparability. It also wants to reduce fiscal and bureaucratic obstacles in order to (4.) improve the operating frameworks for investment. Furthermore, it believes that Switzerland should (5.) present an independent image internationally while coordinating its actions closely with the international community. Last but not least, (6.) collaboration between the financial sector and the real economy is to be stepped up.
Voluntary self-regulation rather than prohibition
The Swiss financial centre aims to become a leading hub for sustainable finance and play a key role in achieving the goals set by the Paris Agreement on climate change. In March 2022, the SBA presented an action plan that lays out how it intends to improve the frameworks for sustainable financial products. Its priorities are the SBA self-regulations on sustainable finance that entered into force on 1 January 2023. In investment advice and portfolio management, clients should express their ESG preferences (environmental, social and governance), understand the associated offering and be in a position to make informed decisions. With regard to mortgage advice, the focus is on long-term value preservation and thus also the energy efficiency of financed properties. Sustainable finance is also becoming integral to training and professional development for client advisors, allowing them to provide transparent, expert and holistic advice on the topic and draw customers’ attention to potential risks. At the same time, the SBA recommends that its members sign up to international net-zero alliances and sustainability initiatives in the banking industry.
Building responsibly on the progress made together
The SBA is convinced that it can play an active role in the financial sector’s sustainable evolution on its own terms thanks to the measures it has put in place and by promoting the information and transparency that businesses demand. It will therefore continue on its current path. That said, it is aware that the financial sector and Swiss business are stronger together when it comes to steering financial flows in ways that permanently transform markets and economic systems. With this in mind, the SBA seeks and encourages regular dialogue with all relevant parties at both national and international levels and supports any efforts by Swiss business to achieve the Paris climate goals and establish the Swiss financial centre as a leading hub for sustainable finance.