Under the Paris Agreement, Switzerland is committed to halving its greenhouse gas emissions by 2030 compared with 1990 levels. To this end, parliament adopted a revision of the CO2 Act in autumn 2020. Despite the fact that both the Federal Council and parliament support the Act, a referendum has been called against it, and the Swiss electorate will vote on it on 13 June 2021.
The Position of the Swiss Bankers Association
Both the existing CO2 Act and the 1997 Kyoto Protocol, the targets of which form the basis for it, expired at the end of 2020. The Paris Agreement was adopted as the successor to the Kyoto Protocol in 2015, and Switzerland has ratified it. Parliament adopted the revised CO2 Act, which is scheduled to enter into force on 1 January 2022, to take account of the new, internationally recognised goals.
The revised Act is intended to minimise the damage caused by climate change. In drafting it, the Federal Council and parliament focused on liberal principles and proven instruments, including incentive taxes on mobility and the heating of buildings. These and other, similar taxes would flow into a climate fund, which would subsidise the modernisation of buildings, sustainable heating methods, the continued development of climate-neutral technologies, efforts to adapt to climate change and other projects.
Impact on the financial centre
Sustainability is a top priority for the Swiss financial centre. The sector is aware that investment in fossil fuels accelerates climate change. The focus must be on solutions that harness the opportunities arising from the energy revolution. The SBA has set itself the target of positioning the Swiss financial centre as a leading international hub for sustainable finance and advocating the best possible frameworks within which to achieve this. With this in mind, the financial sector is clearly in favour of the CO2 Act’s aim of aligning financial flows with the goal of low-emission economic development that is resilient to climate change.
More and more financial service providers are already offering sustainable financial products. As a study by Swiss Sustainable Finance shows, demand for these products is growing steadily. In fact, it rose by 62% year-on-year in 2020. The CO2 Act paves the way towards further expansion of the range of products on offer. This is exactly the kind of support the financial centre needs to achieve its ambitions.
The Act requires FINMA and the SNB to assess climate-related financial risks on a regular basis, thus building on the work done to date to improve transparency with regard to these risks. The SBA supports this approach and welcomes the efforts that are already under way in this respect.