Environmental aspects in financial market policy: good momentum and ongoing work
Bern, 16.03.2018 - Ecological sustainability in financial business has become even more important. During its meeting on 16 March 2018, the Federal Council was informed of the corresponding national and international developments and the Confederation's commitment. The regular exchange of information and opinions between the competent authorities and the financial sector, which last took place in mid-January 2018, will be intensified in view of the good momentum.
The State Secretariat for International Financial Matters (SIF) and the Federal Office for the Environment (FOEN) regularly exchange views with the industry on the progress made on incorporating sustainability criteria into financing and investment decisions. The mid-January 2018 meeting clearly showed that the financial sector is willing to move forward in this area, in line with the Paris Convention on Climate Change ratified by Switzerland. The focus is on the recommendations of the industry-led Task Force on Climate-related Financial Disclosures (TCFD) on the voluntary disclosure of climate-related risks and opportunities.
Based on the TCFD's recommendations, Swiss pension funds and insurance companies had the opportunity in 2017 to have their portfolios tested voluntarily, anonymously and free of charge for their climate compatibility. 79 pension funds and insurance companies, covering around two thirds of the total market in terms of assets under management, accepted this invitation. These climate compatibility tests showed that today's investments support global warming of 4-6 degrees Celsius, while the Paris Convention on Climate Change wants to limit global warming to well below 2 degrees Celsius. There is also a need for action with regard to the consideration of other environmental risks and opportunities (e.g. in connection with water) in financing and investment decisions. Methodological foundations should be developed for this purpose.
On the one hand, ongoing work and, in particular, dialogue between the authorities and the financial sector should be intensified this year. An objective may be for the fiduciary duty of an asset manager to include sustainability as well. On the other, there is to be an exchange of experience with the industry, especially with regard to the implementation of the TCFD's recommendations. Switzerland will continue to be actively involved in the work of international bodies in this area, including within the framework of the G20.
By focusing on sustainability, the Swiss financial centre can raise its profile in the international competitive environment and at the same time help achieve international environmental and sustainability goals. Developments and initiatives at the international level must be taken into account in the process.
Address for enquiries
Frank Wettstein, SIF Communications
Tel. +41 58 462 38 56, email@example.com
FOEN Media Section
Tel. +41 58 462 90 00, firstname.lastname@example.org
The Federal Council
Federal Department of Finance
Federal Office for the Environment FOEN