“Building Bridges – Swiss and EU Approaches to Sustainable Finance” was the subject of the latest edition of the dialogue series #SwissBreakfast at the Mission of Switzerland to the EU in Brussels. On the high-level panel were Deputy Director-General Alexandra Jour-Schroeder, DG FISMA, and Patrick Odier, Chairman Building Bridges.
Ambassador Rita Adam emphasized Switzerland's wealth of experience in sustainable investment. Patrick Odier explained that the Swiss self-regulated, bottom-up approach is evident in a number of initiatives such as "Building Bridges", which mobilizes the advantages of Geneva as an international location for sustainable finance. This Swiss pragmatism works, since sustainable investments represent the best, risk-minimizing investments in the long term and are therefore aligned with the fiduciary duties of financial actors. Accordingly, private players have an inherent interest in developing and implementing the necessary instruments. As an example of this, Odier referred to the Swiss Climate Scores, an initiative designed to enable portfolios to be assessed on the basis of scientific methodologies and to be aligned with sustainable goals. Moreover, he emphasized that Switzerland wants to play an active role and lead the way in the area of sustainable finance in cooperation with the EU.
On the European side, according to the Commission representative, it is important not to lose the momentum of increasing private interest in sustainable investments in times of geopolitical crises. The more prescriptive, "neither top-down, nor bottom-up" EU approach – consisting of the EU Taxonomy, an extensive disclosure regime and correspondingly harmonized labels and benchmarks – should offer predictability, coherence and clarity. While the system is exhibiting an increasing impact (e.g., 63% of companies in the STOXX Europe 600 have already published Taxonomy-compliant figures), some adjustments are still required, particularly with regard to the perception of the regime as too complex and cumbersome as well as the integration of SMEs. As such, the process is a "journey, not a one-off process" that aims to fulfill Europe’s ambition of taking on a global trailblazer role.
EU commends cooperation with Switzerland in international bodies
Both panelists agreed that a fragmentation of regulations should be avoided. However, Alexandra Jour-Schroeder emphasized that the EU did not want to compromise its ambition. Nevertheless, the EU is in close dialogue with other standard setting bodies and countries, in which context she spoke of a good cooperation with Switzerland. The event ended with an outlook on the integration of the transition element into the discussions on sustainable finance. On the European side, the focus is currently on clear "green and not-green" definitions. In Patrick Odier's view, transition should be employed as the new guiding terminology; otherwise, investments would only be made in "safe", already sustainable investments, which in turn would be counterproductive.