Climate regulations for Swiss banks 

Switzerland has ratified the Paris Agreement on climate change and adopted a range of regulations to implement it. Those particularly relevant to business are the Federal Act on Climate Protection Targets, Innovation and Strengthening Energy Security (CIA), the CO2 Act and the Ordinance on Climate Disclosures. These regulations interlock and, taken together, make up the legal framework for climate regulation covering the Swiss economy. 

Paris Agreement 

The Paris Agreement on climate change is a legally binding instrument under the United Nations Framework Convention on Climate Change (UNFCCC). Under this Agreement, Switzerland has committed to cutting its greenhouse gas emissions by 50% compared with 1990 levels by 2030 and to net zero by 2050, meaning that it will not emit more greenhouse gases into the atmosphere than can be absorbed by natural carbon sinks (such as forests) or using carbon capture technologies. Of particular relevance to the financial centre is Article 2.1c of the Paris Agreement, which aims to make finance flows consistent with the global reduction targets. Work is currently under way to draft more precise definitions.

Federal Act on Climate Protection Targets, Innovation and Strengthening Energy Security (CIA) 

In 2023, the Swiss electorate voted in favour of the Federal Act on Climate Protection Targets, Innovation and Strengthening Energy Security (Climate and Innovation Act, CIA), which commits Switzerland to achieving net-zero emissions (climate neutrality) by 2050 and defines targets and milestones for reducing emissions. It is also intended to guide funding towards more climate-friendly investments. With regard to the financial centre, the Confederation can conclude agreements with banks, insurers and pension funds setting out specific targets and measures. The CIA and the related ordinance entered into force on 1 January 2025.

CO2 Act 

The Federal Act on the Reduction of CO2 Emissions (CO2 Act), which was revised in 2024, is intended to implement the targets laid down by the CIA.

Ordinance on Climate Disclosures 

The Ordinance on Climate Disclosures governs reporting on climate issues by companies as part of environmental matters within the framework of non-financial matters in accordance with Article 964b of the Swiss Code of Obligations (CO). Climate issues cover both the effects of climate change on companies and the effects of companies’ activities on climate change over and above the international standard (termed “double materiality”). 

The Ordinance on Climate Disclosures is based on the recommendations of the internationally coordinated Task Force on Climate-related Financial Disclosures (TCFD) and covers in particular their implementation in the areas of governance, strategy, risk management, key figures and targets. With effect from 2024, it requires Swiss banks with more than 500 staff to publish transition plans in line with the Paris Agreement goals and the more precise rules set out in the CIA and the CO2 Act. Although the Ordinance refers explicitly only to disclosure, its prime objective is to align business activity with climate targets, which is an essential prerequisite for a transition plan that meets them.

FINMA Circular 2026/1 “Nature-related financial risks” 

With its Circular 2026/1, FINMA communicated its expectations regarding how banks and insurers manage climate-related financial risks and nature-related financial risks in a broader sense. It aims to strengthen supervised institutions’ resilience to these risks and thus protect their customers as well as the Swiss financial centre as a whole. In keeping with the principle of proportionality, FINMA places higher expectations on larger and more complex institutions. The circular enters into force on 1 January 2026 and initially applies to climate-related financial risks only so as to take account of the differing levels of maturity regarding climate-related and other nature-related risks as well as the extent of institutions’ progress in adapting to the new rules. Banks and insurers in supervisory categories 3 to 5 have an extra year (until 1 January 2027) to meet the requirements for climate-related financial risks.