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. Switzerland has written this target into law in the Climate and Innovation Act (CIA).

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 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 2023, these totalled just under CHF 8,400 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 2024

The PACTA Climate Test 2024, the fourth to be conducted so far, was one of the largest coordinated and comparable climate tests for financial markets, involving the participation of 146 banks, pension funds, insurance companies and asset managers. Since 2017, the PACTA Climate Test has regularly monitored how climate-friendly the Swiss financial market invests. All financial institutions 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 next round of tests takes place in 2026.

The PACTA Climate Test creates comparable transparency across financial sectors and supports concrete, climate-relevant action. The 146 financial institutions that participated in the test in 2024 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 2024 show that over 60 per cent of the participating financial institutions have already integrated the 2050 net-zero climate target in their internal corporate strategy. Fewer than a third had done so in the 2022 Climate Test. Many are taking steps to persuade companies to do business in a more climate-friendly way, are heating their own premises with renewables or supporting mortgage customers in renovating property. Many financial institutions now need to turn their words into action, by drawing up credible net-zero transition plans for all their business activities and applying effective measures to implement these. In addition, it is expected that many more institutions will adopt net-zero targets and strategies.

Here you can find the results report of the PACTA Climate Test 2024 for the Swiss financial market in English. The summary is available in English, German and French.

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