Self-regulation on sustainable finance
As the umbrella organisation of the Swiss banks, the Swiss Bankers Association (SBA) actively lobbies for continual improvements to the frameworks for sustainable financial products. Industry initiatives play a key role here. A prime example is the self-regulation on sustainable finance, which lays down binding rules on sustainability issues for investment and mortgage advice as well as portfolio management, and sets out minimum standards. By making sustainability themes – in other words, environmental, social and governance (ESG) factors – and energy efficiency an integral part of consultations with retail customers, the industry is making a concrete and important contribution towards achieving the Paris Agreement’s climate goals and further strengthening Switzerland’s position as a premier sustainable finance hub.
The initial versions of two sets of self-regulation have been binding for SBA members since 2023, although various transition periods are specified to allow banks to adapt their internal processes. The guidelines will be regularly reviewed in light of market developments and updated as necessary. This happened with the Guidelines for the financial service providers on the integration of ESG-preferences and ESG-risks and the prevention of greenwashing in investment advice and portfolio management in 2024. Non-members can adopt the guidelines on a voluntary basis.
Guidelines for the financial service providers on the integration of ESG-preferences and ESG-risks and the prevention of greenwashing in investment advice and portfolio management
The legal basis for the self-regulation on investment advice and portfolio management, the Guidelines for the financial service providers on the integration of ESG-preferences and ESG-risks and the prevention of greenwashing in investment advice and portfolio management, is the Financial Services Act (FinSA). Customers are 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 customers’ ESG preferences. Members are also obliged to include ESG topics in the training and professional development of their client advisors. By offering customers professional and transparent advice on sustainable investments, financial service providers play an important role in preventing greenwashing. The revised guidelines additionally take account of the Federal Council’s position on the prevention of greenwashing in the financial sector, published in 2022. This means in particular that they include a clearer description of the conditions for labelling investment solutions as sustainable.
Guidelines for mortgage providers on the promotion of energy efficiency
The purpose of the second set of self-regulation, 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 customers advice on financing a property. The intention is to make customers aware of the importance of energy efficiency upgrades. The initial focus is on advice to retail customers seeking finance for single-family and holiday homes. This advice should also include information such as expected upgrade requirements for the property, as well as details of subsidies available for building upgrades and independent specialist agencies able to offer specific guidance if needed. Members also undertake to provide regular training for their client advisors regarding the long-term value retention and energy efficiency of properties.