Self-regulation in sustainable finance

The Swiss Bankers Association (SBA) has undertaken a number initiatives in recent years to help the Swiss financial centre establish a leading international position in the field of sustainable finance and make an effective contribution towards sustainability. As the umbrella organisation of the Swiss banks, the SBA is actively lobbying for the framework conditions for sustainable financial products to be continuously improved. Industry initiatives play a key role here. A prime example is the new self-regulation introduced in the area of Sustainable Finance. 

New minimum requirements for integrating sustainability criteria into investment and mortgage advice

The new guidelines define binding rules for integrating sustainability criteria into investment advice and portfolio management, as well as mortgage advice. By making sustainability themes – in other words, environmental, social and governance (ESG) factors – and energy efficiency an integral part of the advisory sessions with private clients, the industry is making a concrete and important contribution not only towards the achievement of the Paris climate goals, but also to the further strengthening of Switzerland’s position as a premier sustainable finance hub.

Both guidelines are binding on SBA members and come into force on 1 January 2023, with various transition periods granted for adapting internal bank processes. Non-members can adopt the guidelines on a voluntary basis. The guidelines will be regularly reviewed in light of ongoing market developments and will be updated and expanded as and when necessary.

Guidelines for financial service providers on the integration of ESG preferences and ESG risks into investment advice and portfolio management

In the area of investment, the financial industry has the biggest leverage when it comes to Sustainable Finance. According to the latest report published by Swiss Sustainable Finance, total sustainable investment volumes climbed to CHF 1982.7 billion in Switzerland in 2022. Swiss financial service providers have been offering suitable products and services for some time now.

The legal basis for the new “Guidelines for financial service providers on the integration of ESG preferences and ESG risks into investment advice and portfolio management” is the Financial Services Act (FinSA). In future, clients will be asked about their ESG preferences, and then offered appropriate products and services. The guidelines also set out obligations for the provision of information, documentation and accountability when establishing the client’s ESG preferences. Members are also obligated to include ESG topics in the training and professional development of their client advisors. By offering clients professional and transparent advice on sustainable investments, financial service providers play an important role in preventing greenwashing. The new guidelines are binding and replace the existing "Guideline for the integration of ESG considerations into the advisory process for private clients".

Guidelines for mortgage providers on the promotion of energy efficiency

The purpose of the “Guidelines for mortgage providers on the promotion of energy efficiency” is to encourage mortgage providers to consider long-term value retention, and consequently the energy efficiency of the building to be financed, when offering clients advice on financing a property. The intention is to make clients aware of the importance of energy efficiency upgrades. The initial focus is on advice to private individuals seeking finance for single-family and holiday homes. This advice should also include information about expected upgrade requirements for the property in future, as well as details of independent specialist agencies able to offer specific guidance. Members also undertake to provide appropriate and regular training for their client advisors regarding long-term value retention and improvement of energy efficiency.

Experts

Hans-Ruedi Mosberger
Head Asset Management & Sustainability
+41 58 330 62 61
Alannah Beer
Sustainable Finance Associate
+41 58 330 62 71