Net-zero alliances: an essential tool for supporting climate goals
The goal is clear: Switzerland wants to reach net zero by 2050, so it can fully function as a sustainable and climate-friendly economy. To achieve this goal, every business sector must initiate and implement suitable measures. The Swiss Bankers Association is fully aware of the key role and responsibility of banks and the Swiss financial centre, and is taking appropriate steps, together with its members: in April, the SBA became one of the first industry associations in the world to gain supporter status with the Net-Zero Banking Alliance. At the same time, we recommend that all our members sign up to international net-zero alliances and sustainability initiatives in the financial sector. Detailed information on the various net-zero alliances and sustainability initiatives for financial institutions can be found in our news article.
Three reasons for signing up
As members of a net-zero alliance, signatories publicly commit to address the issue of climate change, formulate corresponding goals, and measure and disclose these regularly. We recommend our members to sign up for several reasons. First, because they adopt an internationally recognised framework for setting goals and the path to achieve them. Second, measures already taken by an institution become more tangible and are set into a concrete context. Third, membership provides international comparability and thus makes ambitions more credible.
Our recommendation to sign up is purely voluntary for SBA members. In recent years Swiss banks have made substantial efforts in the area of sustainability and thus already make an active contribution to climate protection. Individual target setting and actions outside the net-zero alliances can contribute equally to achieving climate and sustainability goals. These should still be consistently pursued even after joining an alliance. We therefore see membership of net-zero alliances and other sustainability initiatives as a complementary measure.
Working together towards a common goal
In the case of net-zero alliances, as with other sustainability initiatives, some factors are outside the control of signatories. For example, banks and asset managers only have discretion over a small part of the money they manage. As a member of a net-zero alliance, however, they agree to do their utmost possible to support the transition towards sustainable finance. By signing up to global international net-zero alliances, banks and asset managers can thus play an important role as intermediaries of financial flows and raise clients’ awareness of sustainability and climate issues.
For financial flows not just in Switzerland, but across the globe, to become more sustainable and climate-friendly in the long term, however, the engagement of all stakeholders is crucial: not only the banks should be involved, but also clients and investors – as decision makers – as well as the real economy on the demand side of investment solutions and finance. Only by working together will we be able to pave the way to a sustainable economy and society, and implement the necessary measures swiftly and effectively.