Hands-off regulation of sustainable finance draws mixed response
Extra rules will only be imposed on the sustainable finance sector if banks fail to properly police themselves, says the Swiss government. The hands-off regulatory approach to ethical investing has been welcomed by financial players, but criticised by NGOs.
This content was published on
3 minutes
swissinfo.ch/mga
Unveiling a report on sustainable finance on Friday, Finance Minister Ueli Maurer said legislators would stay in the background as a last resort measure. However, the report identified a number of criteria it would monitor and called for improvements in some areas.
Banks, pension funds, insurers and asset managers are expected to step up efforts to make sure customers get full disclosure of relevant information on their investments and to better calculate the financial consequences of harmful activities.
A government press release said it “sees sustainable finance as a great opportunity for the Swiss financial center. In view of the global challenges, further efforts must be made to protect and further expand the interests and competitiveness of the Swiss financial center internationally”.
The government will monitor global efforts to benchmark and classify what sustainable investments actually are and what criteria need to be applied to market such products to clients. Tax breaks on sustainable investments and loosening the rules for pension funds to take part in the asset class are also being reviewed, according to the NZZ newspaper.
Sustainable finance follows the environmental, social and governance (ESG) aims of the UN’s 2030 Agenda for Sustainable Development and the Paris Agreement on climate change. The goal is to divert finance to eradicating poverty, inequality, conflict and the environmental degradation of the planet.
Rising investments
According to the latest Swiss Sustainable Investment Market Study, investments in this area have risen from CHF40.6 billion ($42 billion) in 2010 to CHF1.16 last year, leaping by 62% in 2019 alone. The Swiss Bankers Association has called the development of sustainable finance a “top priority” as demand for such investments grows.
The financial industry welcomed the government’s light regulatory touch, but some NGOs fear that they are more interested in cashing in on the latest growth trend than bringing about environmental or social improvements.
Greenpeace Switzerland said Switzerland had missed a golden opportunity to set concrete and enforceable standards on the financial industry and accused the Swiss government of lagging behind other countries in this respect, particularly in Europe.
A recent study by the NGOs Artisans of Transition and the Swiss Climate Alliance criticised the Swiss National Bank’s (SNB) “extremely weak position” on assessing the risks of climate change. It said the SNB was responsible for 43.3 million tonnes of CO2 emissions with its investments in fossil fuels – a figure that has barely dropped in recent years.
The study also took Credit Suisse and UBS (two banks that actively promote their sustainable credentials) to task for their records in investing in fossil fuel projects and stated that three quarters of Switzerland’s largest 60 pension funds have no climate policy.
Popular Stories
More
Swiss Politics
Why cars still reign supreme in ‘rail-nation’ Switzerland
Swiss central banker wants to boost equity to head off risks
This content was published on
Equity levels at the Swiss National Bank (SNB) are much too low for the risks its large balance sheet poses, according to Martin Schlegel.
Beer sales in Switzerland watered down by bad weather
This content was published on
The past brewing year fell through in Switzerland, partly due to the bad weather. Beer sales shrank again. For the first time, per capita consumption fell below the 50 liter mark.
Compensation for Syrian after pregnant wife denied help on Swiss train
This content was published on
Switzerland’s Federal Court has partially upheld the appeal of a Syrian family being deported from Switzerland to Italy in 2014. The man now also receives compensation.
Swiss-EU negotiations: Cassis to meet Sefcovic in Bern
This content was published on
Swiss Foreign Minister Ignazio Cassis will meet the Vice-President of the EU Commission, Maros Sefcovic, in Bern on Wednesday.
If you want to start a conversation about a topic raised in this article or want to report factual errors, email us at english@swissinfo.ch.
Read more
More
Swiss National Bank asked to curb fossil fuel investment
This content was published on
On Thursday, the lobby group led by the Swiss Climate Alliance – an alliance of 70 “green” non-profits – sent out an open letterExternal link to the SNB asking it to publish the carbon footprint associated with its investment portfolio and stop investing in oil and gas exploration and extraction. According to a report published…
Report urges more sustainability from Swiss financial centre
This content was published on
Switzerland must make its financial centre more sustainable and transparent, according to a report by PricewaterhouseCoopers.
This content was published on
Switzerland performs a delicate dance when it comes to promoting business interests, maintaining neutrality and defending human rights.
Credit Suisse reports brighter Swiss financial sector outlook
This content was published on
The Swiss financial sector has faced several crises and structural changes since 2007, but wealth management is doing well, says a Credit Suisse study released on Friday.
You can find an overview of ongoing debates with our journalists here . Please join us!
If you want to start a conversation about a topic raised in this article or want to report factual errors, email us at english@swissinfo.ch.