The Swiss goverment wants to prevent greenwashing in the financial market
On 16 December 2022, the Swiss Federal Council defined the further course of action to prevent greenwashing in the financial market. Greenwashing in the financial sector is understood to be the deception of customers regarding the sustainable properties of financial products and services. The Federal Council is of the opinion that a clear, general understanding of when a financial product or service can be offered as sustainable is necessary for the functioning of the market. A working group is to examine how this position can be implemented efficiently.
In a position paper, the Swiss Federal Council states its position on greenwashing in the financial market. Financial products or services should only be offered as sustainable if they are compatible with at least one specific sustainability goal or contribute to achieving a sustainability goal. This is to ensure that financial products and services that are intended to reduce any ESG risks are only designated as sustainable if they pursue a sustainable investment objective in addition to a purely financial one. Providers of sustainable products or services should explain how they intend to achieve a sustainable investment objective. The providers should also periodically report on the selected sustainable investment objectives and compliance with the transparency requirements should be verifiable by an independent third party. Finally, clients should be able to assert their rights through legal action.
The Swiss government mandates a working group under the leadership of the Federal Department of Finance (FDF) to examine how best to implement the Federal Council's position on greenwashing prevention. In addition to the FDF, the Federal Department of the Environment, Transport, Energy and Communications (DETEC), the Federal Department of Economic Affairs, Education and Research (EAER), the Swiss Financial Market Supervisory Authority (FINMA), the industry and non-governmental organisations are to be represented in the working group. The FDF will propose to the Federal Council by the end of September 2023 how to proceed on the basis of the work.