The Swiss financial center aims to take the lead in sustainable finance – globally. One of the most effective ways forward for the financial sector is to sign up to international net-zero alliances, a step supported by Switzerland’s three largest financial industry associations
To combat climate change and meet the goals of the Paris Agreement – to limit global warning to 1.5˚Celsius above pre-industrial levels and reach net-zero emissions of greenhouse gases by 2050 – everyone can do their part. The Swiss financial sector has not remained on the sidelines, as it is well aware that shaping the future not only requires ambition but also action.
Various sector-specific initiatives aiming for net-zero emissions among banks, insurers and asset managers have thus seen the daylight. To qualify as “net zero,” emissions of greenhouse gases may not exceed the amount that can be absorbed by natural and technical sinks. The purpose of the net-zero initiatives is to support the global transition of the real economy toward net-zero greenhouse gas emissions and increase the pace of efforts to combat climate change. The creation of industry-wide common standards to formulate credible climate targets is a key component.
The creation of comparable and meaningful indicators is important to avoid greenwashing when marketing sustainable financial products. Even more so now that sustainable finance is on its way to becoming the new norm for investments worldwide. The total sustainable investment volume has soared by more than 3,600 percent over the past decade to a whopping 1.5 trillion Swiss francs in 2020 – in Switzerland alone.
Turning Switzerland into a magnet for green investments
To turn into a leading center for sustainable finance, one of the most effective ways forward for the Swiss financial center is to join the net-zero alliances under the umbrella of the Glasgow Financial Alliance for Net Zero (GFANZ). These are industry-led, UN-convened alliances.
The Net Zero Asset Managers initiative (NZAMI), set up in December 2020, was among the first net-zero initiatives in the financial sector. Nearly 250 asset managers, representing more than half of all assets under management worldwide, have since signed up to the NZAMI. By joining, they commit to aligning their investment products and portfolios to a net zero emissions target across all assets under management by 2050,and facilitate increased investments that help limit global warming to 1.5˚C. The Asset Management Association Switzerland (AMAS) joined as a supporting member in December 2021. It actively promotes this global network among its roughly 190 members.
The banking sector launched a similar initiative, the Net-Zero Banking Alliance (NZBA) in April 2021. The NZBA now consists of over 100 members, representing 40 countries and more than 43 percent of global banking assets. Its signatories pledge to transition their operational and attributable emissions of greenhouse gases from their lending and investment portfolios to reach net-zero by 2050 or sooner. This implies that the NZBA’s members will start by prioritizing sectors where their bank can have the most significant impact: those that emit the most greenhouse gases within their portfolios. The banks also commit to publishing absolute emissions in line with best practice on an annual basis.
The alliance achieved a critical milestone earlier this year, when NZBA welcomed its 100th signatory. Switzerland’s two largest banks – UBS and Credit Suisse – joined the NZBA as founding members. Berner and Basellandschaftliche Kantonalbank have since followed their lead. The Swiss Banking Association recommends that its 250 members also sign up to net-zero alliances and sustainability initiatives in the banking industry.
The insurance sector is also supporting climate efforts, with the creation of the Net-Zero Asset Owner Alliance in XXX and the Net-Zero Insurance Alliance (NZIA), set up in July 2021. The NZIA today consists of nearly 50 members representing more than 11 percent of global premium volumes. They have all committed to achieving carbon neutral investments by 2050. Two of Switzerland’s largest insurers, Swiss Re and Zurich, were among NZIA’s founding members. They have individually set science-based 2025 decarbonisation targets for their respective investment portfolios in line with a net-zero transition pathway. The Swiss Insurance Association (SIA) joined this net-zero alliance in the capacity of supporter last fall.
Full support of the Swiss government
The Swiss government fully stands behind these climate efforts and encourages “the financial sector to join net-zero international alliances and is working towards industry agreements with this in mind.”
Net-Zero Banking Alliance
Swiss Insurance Association (SIA)
Asset Management Association Switzerland (AMAS)
 Swiss Sustainable Investment Market Study 2021, Swiss Sustainable Finance