Importance and areas for action
The financial system has a vital part to play in achieving climate and sustainability goals. Sustainability is relevant to banks’ operations, investments, financing and capital market activities, when it comes to interacting with customers, in their role as employers and in terms of their public image. In their efforts to become more sustainable at the same pace as the real economy and take advantage of the related business opportunities, financial players are systematically factoring sustainability into their financing and investment decisions. The Swiss financial centre plays a leading international role in this field and is making a substantial contribution through various initiatives.
Importance of sustainable finance
The term “sustainable finance” refers to all forms of financial service for which environmental, social and governance (ESG) criteria are factored into business or investment decisions for the long-term benefit of customers, the environment and society as a whole. In order to fund a future-proof economy, the financial system must provide financial support for the transition of both the economy and society towards sustainable development while at the same time reducing its funding of especially high-risk activities such as fossil fuel production.
At the international level, Switzerland has adopted the Sustainable Development Goals (SDGs) as a UN member state and ratified the Paris Agreement on climate change. These international agreements are aimed at securing vital resources for future generations through a sustainable economic and social transformation. At the national level, meanwhile, the Federal Council has set the target of achieving net-zero greenhouse gas emissions by 2050 and turning the Swiss financial centre into a leading hub for sustainable finance.
Swiss Bankers Association initiatives
As the umbrella organisation of Switzerland’s banks, the Swiss Bankers Association (SBA) is committed to reducing regulatory hurdles in Switzerland and further improving the frameworks for sustainable financial products in general. The SBA sees the Federal Council’s goals as an opportunity for the Swiss financial centre and intends to play an active role in achieving them.
It has undertaken a number of initiatives in recent years to establish a leading international position in the field of sustainable finance and make an effective contribution towards sustainability. In 2021, for example, it published a study on the investment and financing needed for Switzerland to reach net zero by 2050 in conjunction with Boston Consulting Group (BCG). It also published a discussion paper on climate-efficient mortgages in 2022 and another on mobilising private capital to combat climate change in 2024.
The SBA is forging ahead in this field through a number of initiatives:
- Voluntary self-regulation:
The SBA’s new self-regulation defines minimum standards for its members and makes them more competitive and more credible by guaranteeing high-quality advice for customers. In particular, the SBA has drawn up binding rules for its members on the integration of ESG preferences and ESG risks and the prevention of greenwashing in investment advice and portfolio management. As far as the sustainability of financial products is concerned, it supports the standards defined by the Asset Management Association Switzerland (AMAS). - Net-zero initiatives:
The SBA regards net-zero initiatives as an effective instrument for achieving the climate goals set for the year 2050. It recommends that its members sign up to international net-zero alliances and sustainability initiatives in the banking industry. The SBA itself is a supporting institution of the Net-Zero Banking Alliance. - Education:
The SBA and the banks systematically integrate ESG know-how into their education and professional development. The SBA’s goal is to ensure that all client advisors have a sufficient understanding of ESG issues and apply it the advisory process.
To ensure that all of its initiatives succeed and achieve the best possible results, the SBA engages in regular dialogue with all relevant stakeholders in the industry, the supervisory authorities (FINMA), the federal government (SIF, FOEN), leading professional associations (AMAS, SIA, SSF), NGOs (WWF Switzerland, Greenpeace Switzerland) and civil society.