Sustainability in the financial sector is becoming increasingly important, both nationally and internationally. For the Swiss financial centre, sustainability in the financial sector presents a considerable opportunity. The government primarily acts as mediator and facilitator in this context, cultivating an intensive dialogue with the financial industry and interested third parties and supporting the creation of an optimal regulatory framework.
On 16 December 2022, the Federal Council approved the report on sustainability in the financial sector. Fifteen measures planned for 2022 to 2025 are intended to consolidate the Swiss financial centre's position as a leading global location for sustainable finance.
By adopting the 2030 Agenda for Sustainable Development in 2015, the member states of the UN declared their willingness to jointly meet the 17 Sustainable Development Goals by 2030. Switzerland ratified the Paris Convention on Climate Change in 2017. In 2019, the Federal Council set the objective of zero net greenhouse gas emissions by 2050. Accordingly, sustainability topics are increasingly shaping the financial market.
In order that risks to financial market players are more clearly visible and palpable, external costs of environmental and climate damage from economic activities in the real economy need to be internalised. The Federal Council continues to advocate at international level that greenhouse gas emissions should be appropriately priced using market economy tools, such as charges or emissions trading systems.
Large companies' transparency on the climate impact of their activities is a key aspect for the markets to function well and for climate sustainability in the financial sector. The Federal Council has therefore enacted the ordinance on mandatory climate reporting by large Swiss companies as of 1 January 2024: Public companies, banks and insurance companies with 500 or more employees and at least CHF 20 million in total assets or more than CHF 40 million in turnover are obliged to report publicly on climate issues. The first report will have to be published on the 2024 financial year.
For financial markets to adequately take environmental risks into account, it is an important precondition that a high-quality data basis in both the financial sector and the real economy is available, taking international standards into account. Moreover, increased transparency on environmental risks and environmental impact allows investors to make decisions efficiently, promotes innovation capabilities in the financial sector and helps to avoid greenwashing.
Thanks to the more efficient use of digital technology, fintechs are becoming increasingly important for the financial centre, either by acting as innovation partners of traditional financial players or occasionally by replacing their value added. Fintechs are thus essential for the future sustainability and competitiveness of the Swiss financial centre. The Federal Council will position the Swiss financial centre as a global leader in exploiting the potential of digital technology in the area of sustainable finance (green fintech).
Environmental impact testing
In 2017, the Federal Office for the Environment (FOEN) and the State Secretariat for International Finance (SIF) made it possible for all Swiss pension funds and insurance companies to have the environmental impact of their stock and corporate bond portfolios tested voluntarily and free of charge. Testing was repeated in 2020 and expanded to include banks and asset managers. The most recent climate test took place in 2022.
Testing for climate goal alignment
Last modification 26.10.2023