Climate and financial markets

Today’s investment decisions, for example concerning energy supply, will also determine the quantity of greenhouse gases that will be emitted in the future. In the 2015 Paris Agreement, the international community set three main objectives, including making finance flows consistent with a pathway towards low greenhouse gas emissions and climate-resilient development. This means that in the future, more money will be invested in environmentally friendly and future-oriented technologies and energy sources, and less in greenhouse gas-intensive technologies and energy sources. As a signatory to the Paris Agreement, Switzerland is committed to this objective.

Today's investment behaviour not only significantly supports oil and gas production, but even their further expansion. This is in direct opposition to climate targets. The broad participation of insurance companies, pension funds, banks and asset managers in voluntary climate compatibility tests suggests that climate awareness within the Swiss financial sector is steadily growing.

Finance flows include assets under management in Switzerland. At the end of 2019, these totalled just under CHF 7,000 billion. They come, for example, from private savings deposits at banks, insurance capital, and savings in pension funds and Old Age and Survivors Insurance. It is in the interest of savers and pension schemes for financial institutions and institutional investors to invest money in the most profitable funds possible. If the way in which investment and financing affect the climate is made transparent, everybody will be able to make knowledgeable, climate-relevant decisions.

Results of the PACTA Climate Test 2022

Since 2017, the PACTA Climate Test has regularly monitored how climate-friendly the Swiss financial market invests. All pension funds, insurance companies, banks and asset managers can participate voluntarily. The FOEN conducts the tests in cooperation with the State Secretariat for International Financial Matters SIF. The Climate Tests are internationally coordinated.

 

The PACTA Climate Test creates comparable transparency across financial sectors and supports concrete, climate-relevant action. The 133 financial institutions that participated in the test in 2022 received individual, interactive reports with the results of their climate alignment. This was done for each portfolio and with a comparison with the other participants. The financial institutions are free to use their results only for internal follow-up work or to disclose them.

 

The results for the year 2022 show a mixed picture. Some financial institutions are setting concrete climate targets, trying to persuade companies to do business in a more climate-friendly way, heating their own properties in a renewable way or supporting mortgage customers with renovations. However, greater efforts are needed in the near future before the Swiss financial market as a whole can act in a climate-friendly manner.

Here you can find the results report of the PACTA Climate Impact Assessment 2022 for the Swiss financial market in English. The summary is available in English, German and French.

PACTA Climate Test Switzerland 2022: Aiming Higher (PDF, 6 MB, 24.11.2022)PACTA, Wüest Partner, 2022. Supported by the FOEN

Testing for climate goal alignment

Here you will find more information on the regular PACTA climate alignment assessment for the Swiss financial market (PACTA stands for Paris Agreement Capital Transition Assessment).

Regulatory work

Here you can find more information on regulatory work on sustainability in the financial market. The parliamentary proceedings on this topic you can find under 'Law' at the bottom of this page Climate and Financial Market.

Climate impact and risks

Here you will find more information on how financial market actors can actively contribute to achieving climate targets and what financial risks climate change and its mitigation may entail for financial market actors.

Further information

Documents

Wie kann die Schweiz die Finanzmittelflüsse klimaverträglich ausrichten? (PDF, 1 MB, 17.11.2021)Bericht des Bundesrates in Erfüllung des Postulates 19.3966 der Kommission für Umwelt, Raumplanung und Energie des Ständerats UREK-S vom 16. August 2019

Kohlenstoffrisiken für den Finanzplatz Schweiz (PDF, 1 MB, 23.10.2015)CSSP – Center for Social and Sustainable Products; South Pole Group, im Auftrag des BAFU

Trails for Climate Disclosure – a regulatory review (PDF, 2 MB, 08.11.2016)2°Investiting Initiative, supported by FOEN, 2016

Measuring Progress on Greening Financial Markets (PDF, 1 MB, 10.06.2016)2°Investiting Initiative, supported by FOEN, 2016

Law

Parliamentary proceedings

Contact
Last modification 24.11.2022

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