The combined set of indicators above, their display, and the below minimum criteria for these indicators are considered by the Swiss government as current best practice to establish transparency on the alignment with global climate goals. The Federal Council recommends to all financial institutions such transparency on all investment products and investment management mandates, where applicable.
Indicators
Current state
Greenhouse Gas Emissions
Encompasses all sources of greenhouse gas emissions from invested companies (scope 1-3), including relevant emissions of their suppliers and products.
Evaluation
Benchmark: [relevant benchmark name]
Portfolio assets covered by assessment: X%
Medium estimation uncertainty
Exposure to Fossil Fuel Activities
There is scientific consensus of the need to phase-out coal and stop financing new fossil fuel projects. Below figures show the share of investments into companies that earn more than 5% of their revenues from such business activities.
Evaluation
Share of investments into companies with activities in:
coal: X%
other fossil fuels: X%
Low estimation uncertainty
Transition to net-zero
Verified Commitments to Net-Zero
Companies are increasingly committing voluntarily to transitioning to net-zero and setting interim targets. The effectiveness of such commitments depends on whether interim targets are credible, science-based, and transparent.
Evaluation
Share of companies in portfolio with verified commitments to net-zero and credible interim targets: X%
Low estimation uncertainty
Management to Net-Zero
Financial institutions can contribute to the transition to net-zero, by aligning their investment strategy with a consistent 1.5°C decarbonisation pathway.
Evaluation
Does the investment strategy include a goal to reduce the greenhouse gas emissions of its underlying investments through concrete short (1-3 years) or mid-term (5 years) targets? NO/YES
[if YES:] Average annual reduction path: X% (incl./excl. relevant Scope 3)
Is the portfolio part of a third-party verified commitment to net-zero by the financial institution, including credible interim targets? NO/YES
Credible Climate Stewardship
Financial institutions can contribute to the transition to net-zero, by engaging with invested companies on third-party verified, science-based net-zero aligned transition plans until 2050.
Evaluation
Are companies in the portfolio subject to credible stewardship on climate transition? NO/YES
[if YES:] Share of companies currently under active climate engagement: X%
[if YES:] Share of climate votes supported: X%
[If YES:] Link climate stewardship strategy and report
Is the financial institution a member of a climate engagement initiative? NO/YES [if YES:], Name
Medium estimation uncertainty
Global Warming Alignment (optional)
This is the level of global warming that would occur if the global economy acted with the same ambition as the companies in the portfolio. Some portfolios with climate objectives may intentionally include investments in companies that are not yet on track to 1.5°C, but seek to contribute actively to climate goals by improving the alignment of investee companies to bring a larger share of the economy into alignment over time.
Evaluation
Portfolio assets covered by assessment: X%
Climate scenarios used: [original source]
Data provider: [provider name]
High estimation uncertainty
Last modification 13.02.2023
