Sustainable Finance

Sustainability presents a considerable opportunity for the Swiss financial centre. The government primarily acts as a facilitator in this context, cultivating an intensive dialogue with the financial industry and supporting the creation of an optimal regulatory framework.

The competitiveness of Switzerland’s financial centre must be supported, but at the same time, steps need to be taken towards greater sustainability. Financial markets that want to remain successful must be stable and trustworthy.

Sustainable Finance in Politics

Switzerland aims to be a leading location for sustainable financial services and the Swiss Government seeks to support this ambition with a carefully balanced framework.

The competitiveness of Switzerland’s financial centre must be supported, but at the same time, steps need to be taken towards greater sustainability. Financial markets that want to remain successful must be stable and trustworthy.

Creating optimal conditions

The framework conditions for the Swiss financial centre in this area have been identified and work is well underway on their development. Some key points include:

  • Information for market participants: Environmental and climate information for financial products and companies, including financial institutions, should be made available to all market participants in a clear and comparable way.

  • Quality of information: The chosen reporting standard is to be measured against the achievement of sustainability goals in accordance with the 2030 Agenda reference framework.

  • Quality of service: Informed advice, a high level of training and further education in the sector as well as products that are effectively geared towards achieving sustainability goals are key factors on the supply side.

  • Innovation: The use of digital business and analysis models plays a central role.

  • Risk pricing: Financial risks from environmental and climate developments must be identified. This includes the long-term perspective and developments during the transition and adaptation phase.

International co-operation

International developments, especially in the EU, must be closely monitored in order to identify at an early stage which steps are necessary to maintain competitiveness. Switzerland remains committed to the exportability of high-quality financial services, which makes the sustainability of Swiss financial services key in the international context.

Sustainable finance offers clear growth opportunities for Switzerland’s financial centre. The Swiss government and authorities will maintain a close dialogue with the finance sector, civil society and academics to develop the ideal conditions to support improved sustainability.

Further information

State Secretariat for international finance

Green Fintech Network

The Swiss Government (Federal Council) sees sustainable finance as a great opportunity for the Swiss financial centre. The combination of sustainable financial services and digital technology (green fintech) is particularly promising. For this reason, the State Secretariat for International Finance (SIF), together with industry representatives, launched the Green Fintech Network on 3 November 2020.

State Secretary Daniela Stoffel laid the foundation for the Network at a virtual meeting with the industry. The aim of the Network is to ensure close cooperation between SIF and key specialists from the Swiss green fintech ecosystem. 

Accordingly, the main industry players are represented in the Network:

  • Green fintech companies
  • Green fintech associations
  • Risk capital firms
  • Universities/universities of applied sciences
  • Consultancy firms and law firms

The Green Fintech Network's mandate is to identify areas in which the conditions for green fintech in Switzerland could be improved. The Network should then submit concrete proposals to both the government and the private sector. Finally, the Network should assist in the implementation of measures.

The results of the Green Fintech Network's initial activities will be recorded in an action plan, which is due to be published in spring 2021.

Further information

Green Fintech Network

Green Fintech Survey

Sustainable banking

The Swiss financial centre has the potential to play a leading global role in sustainable finance, and for Swiss banks sustainable finance is both an opportunity and a top priority.

The Swiss Bankers Association (SBA) has introduced new guidelines to help banks when providing their private clients with advisory services.

Swiss financial institutions are among the leading global players in offering and marketing innovative financial instruments, including in the area of sustainable finance. At the end of 2019, around one third of professionally managed assets in Switzerland were invested sustainably, and the trend is set to continue to rise sharply.

New guidelines for the advisory process for private clients

The recently published guidelines focus on consideration of ESG criteria (environment, social, governance) in the advisory process for the management of private client assets. In this way, the SBA aims to ensure that private investors continue to catch up in this space.

The guidelines consider the entire advisory process, including how sustainable criteria can be integrated into planning. In addition to standard client considerations such as risk, revenues and liquidity, sustainability aspects are incorporated as a further dimension, with the intention of making sustainability choices easier for clients.

Further information

Swiss Banking Guidelines

Policy for a future-proof Swiss financial centre

Sustainable asset management

Switzerland has enormous potential as a centre of excellence in sustainable investment, and its financial services industry is approaching a position in which sustainable investment is the norm. Political and social pressure to take environmental, social and governance (ESG) issues into account is steadily mounting, but the main reason for the strong growth in sustainable investments is simply that investors’ are willing to channel more money into them.

Sustainable investments, sustainable growth

According to the 2020 Swiss Sustainable Investment Market Study, the total volume of sustainable investments in Switzerland is currently CHF 1,163 billion, equivalent to about a third of locally managed assets. The market data collected and analysed by Swiss Sustainable Finance (SSF) shows an increase of 62 percent on the previous year, highlighting the impressive growth record of sustainable investments.

Boost for sustainable funds and mandates

Sustainable investment funds continue to show a dynamic growth rate of 147 percent, according to the study that SSF prepared in partnership with the Center for Sustainable Finance and Private Wealth at the University of Zurich. Their volume of CHF 470.7 billion accounted for 38 percent of the overall Swiss investment fund market at the end of 2019. 

Sustainable mandates saw even stronger growth of 195 percent, with the total volume of assets under management climbing to CHF 208.9 billion. The sustainable assets of institutional investors totalled CHF 483.7 billion at the end of 2019, representing around 30 percent of the total assets managed by pension funds and insurance companies in Switzerland.

Sustainable investment solutions are very popular with investors, partly because of the competitive risk/return profiles they offer compared to conventional financial products. The Swiss financial centre is ideally positioned to support this rapid growth and will continue to develop as a global leader in this field.

Further information

Swiss Sustainable Investment Market Study 2020

Sustainable Asset Management: Key Messages and Recommendations

Swiss Sustainable Finance

Sustainable Insurance

As a key driving force of the Swiss economic engine, Swiss private insurers bear economic responsibility, as is evidenced, among other things, by their clear commitment to sustainability and its gradual implementation in the insurance business. This report makes the efforts made by the industry to date in terms of investments, operational ecology and underwriting visible and verifiable to the outside world. It also allows the industry to take stock of what it has achieved to date and helps to ensure that the sustainability debate is as fact-based as possible.

ESG integration in insurance

When it comes to investments, the data reveals that in the year under review, 86 per cent of the investments managed by the reporting companies included ESG criteria when the investment decisions were made. ESG stands for Environmental, Social and Governance. These aspects are implemented primarily in the real estate, fixed-income securities, shares and alternative investment categories.

Top ranked Zurich and Swiss Re

Dow Jones Sustainability Indices rank Zurich first and Swiss Re fifth in the re/insurance industry in 2020 and leading reinsurer. Overall, the amount of insurers participating in the survey has increased by 63% compared to 2019 (from 79 to 129 insurance companies assessed), reflecting the increased focus on ESG ratings.

Further information

Sustainability Report of the Swiss Insurance Association

Reinsurance and Sustainability

«Sustainability is a central issue for insurance companies»

Sustainable Financial Infrastructure

To help strengthening sustainable investing, to give such bonds higher visibility and to facilitate investors’ search, special flags have been introduced by SIX in the Bond Explorer that allows to filter for existing Green, Sustainability or Sustainability-linked bonds.

Green, Sustainability or Sustainability-linked bonds criteria

To be eligible and “SIX-flagged” as either a Green, Social, Sustainability or Sustainability-linked bond, the criteria outlined below must be met:

  • Green bonds must be certified under the Climate Bonds Standard set out by the Climate Bonds Initiative (CBI) and be aligned with the Green Bond Principles by ICMA; Once a Green bond is certified by CBI, such Green bond will automatically be flagged by SIX.
  • Sustainability bonds must be certified under the Climate Bonds Standard set out by CBI and be aligned with the Sustainability Bond Guidelines by ICMA.
  • Sustainability-linked bonds are issued under the concept of an “issuer commitment”.
Further information

SIX Sustainable Bonds

Slides on SIX Sustainable Bonds