Digital library on sustainable finance
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The brochure "Sustainable finance in Switzerland: from pioneer to premier international hub" published by the Swiss Bankers Association (SBA) provides policymakers and the general public with a comprehensive overview of current industry initiatives. The brochure also sets out concrete action areas where the framework conditions could be effectively improved.
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Sustainable Finance in Switzerland: from pioneer to a premier international hub - DE
Sustainable Finance in Switzerland: from pioneer to a premier international hub - FR
Sustainable Finance in Switzerland: from pioneer to a premier international hub - EN
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This report studies hard-currency bonds issued by emerging-market financial institutions over a period of 10.5 years (from 2009 through the first half of 2019). It finds that 60 emerging-market countries host 804 financial institutions, including 398 banks, that are issuing hard-currency bonds with a total of $648 billion in outstanding value as of June 2019. While relatively small compared to the global bond market ($107 trillion at the end of 2018), the segment is sufficiently large and diversified to deploy specific investment strategies. Since these financial-sector bond issuers tend to be among the most sophisticated in emerging markets, many of them are well-equipped to become first-time green bond issuers as their next steps.
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In June 2020, the Swiss Federal Council adopted a report and guidelines on sustainability in the Swiss financial sector. The report provides a first overview of international developments and Switzerland's position. It examines thirteen measures for sustainability in the financial sector in detail, some of which are also being discussed in the EU, and focuses on environmental aspects. The measures primarily concern transparency, investment activities, training and further education, and risks.
The report was prepared by a cross-departmental working group headed by the State Secretariat for International Finance (SIF), in close cooperation with the Federal Office for the Environment (FOEN) and other authorities such as the Federal Department of Foreign Affairs (FDFA) and the State Secretariat for Economic Affairs (SECO).
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This report aims to enable a better understanding of the business sectors and financial mechanisms at risk from the loss of biodiversity and lay the groundwork for biodiversity-related target-setting by the finance sector. It sets out an initial approach to enable financial institutions to set evidence-based biodiversity targets aligned with international policy developments.
The approach detailed in this report combines information from scientific literature and key authoritative sources, as well as the knowledge base on the impacts and dependencies of sectors on nature developed for the ENCORE tool, to identify a set of priority sectors for biodiversity-related target setting
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Beyond 'Business as Usual': Biodiversity Targets and Finance - FR
Beyond 'Business as Usual': Biodiversity Targets and Finance - EN
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In the context of the COVID-19 pandemic, this paper was developed to support thinking on how to respond to the pandemic from a sustainable finance perspective. Specifically, it has two objectives:
- Set out what we know about the ways in which the many different components of our sustainable financial system – market actors, policymakers, regulators, and international institutions – are thinking, planning and reacting to the pandemic, with a focus on implications for sustainable finance markets.
- Set out a framework for assessing what levers may exist to strengthen the role of the financial system in supporting a low-carbon recovery, and the prospective roles for different communities of actors.
This paper is not intended to be comprehensive across the wide range of sustainability-related implications of the pandemic. For instance, it does not attempt to forecast how macroeconomic trends may impact the trajectory of the low-carbon transition. Rather, this paper is a preparatory effort to inspire thinking by different communities of actors on response strategies over the coming months and help identify where collaboration will be required.
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Implications of the COVID-19 Pandemic for Global Sustainable Finance - EN
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Dieser Bericht von Greenpeace zeigt auf, dass beide Schweizer Grossbanken trotz Bekenntnisse zum Klimaschutz auch vier Jahre nach Abschluss des Übereinkommens von Paris noch Milliardenbeträge ins Geschäft mit fossilen Energien stecken. Der Bericht stützt sich auf Auswertungen der durch die Banken ermöglichten Fremdfinanzierungen bei 101 Unternehmen aus dem Kohle-, Öl- und Gassektor. Die Analyse der finanzierten Emission zeigt, dass die beiden Banken im Zeitraum von 2016 bis 2019 jedes Jahr mehr CO2-Emissionen ermöglicht, als innerhalb der Schweiz ausgestossen wurden.
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Klimaschädliche Geschäfte. Finanzierte CO2 -Emissionen von UBS und CS von 2016 bis 2019. - DE
Klimaschädliche Geschäfte. Finanzierte CO2 -Emissionen von UBS und CS von 2016 bis 2019. - EN
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Dieser Bericht kommt zum Schluss, dass eine praktikable und offen zugängliche ESG (Environment, Social, Governance)-Bewertungsplattform für KMUs helfen könnte, die gegenwärtigen Nachteile auf effektive Weise anzugehen. Es braucht aber auch stärkere Anreize aus dem Finanzsektor um KMUs dazu zu bewegen ihre Nachhaltigkeitsleistung in transparenter und unabhängiger Weise bewerten und vergleichen zu lassen.
Nur wenn KMU einen konkreten Nutzen aus dem zusätzlichen Aufwand ziehen können, wird es für sie interessant ihre ESG Leistung zu messen und kontinuierlich zu verbessern. Als Standbein der Schweizer Wirtschaft muss dem Sektor daher mehr Beachtung geschenkt werden, wenn die Schweizer Klima- und Nachhaltigkeitsziele tatsächlich erreicht werden sollen.
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The report Fintech for Biodiversity looks at the ways digital biodiversity data could be deployed for use in financial decision-making. The report describes ways in which digital technologies in general, and fintech specifically could be harnessed to empower ordinary citizens to embrace biodiversity finance: whether as retail investors via security token offerings, or (in case of rainforest inhabitants and other relevant communities) as duly compensated monitors of biodiversity.
The report acknowledges certain barriers and suggests ways how the creative deployment of fintech might might help overcome these.
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Fintech for Biodiversity_FINAL_30.32020 (pdf 2.8 MB)Summary
In 2019, the OECD provided a preliminary overview on global biodiversity finance in the report Biodiversity: Finance and the Economic Business Case for Action. This follow-up report provides an in-depth analysis of global biodiversity finance flows. It combines and aggregates information across various datasets, covering public, private, domestic and international flows. The report also provides an overview of government support potentially harmful to biodiversity, and offers recommendations for improving the assessment, tracking and reporting of biodiversity finance.
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A Comprehensive Overview of Global Biodiversity Finance - FR
A Comprehensive Overview of Global Biodiversity Finance - EN
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This report analyses the Swiss National Bank's (SNB) climate risk management policy and comes to the conclusion that the SNB has not adequately assessed the colossal and potentially irreversible systemic risk that climate change poses to the Swiss financial system and the economy as a whole.
Drawing on the steps taken by European central banks in acknowledging the enormous economic and financial impacts of global warming that have already begun, the report makes recommendations for the SNB to drop its wait-and-see attitude, to break with the passive management of its portfolio and to adopt, as soon as possible and in coordination with politicians, a vision and a strategy to flatten the climate risks curve as soon as possible.
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The SNB misleads Switzerland’s financial centre on climate change - DE
The SNB misleads Switzerland’s financial centre on climate change - FR
The SNB misleads Switzerland’s financial centre on climate change - EN
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Diese Studie der SMI Expanded Unternehmen geht der Frage nach, wie die Nachhaltigkeitsberichterstattung in den grössten börsenkotierten Schweizer Unternehmen bereits verankert und ausgestaltet ist. Sie gibt erste Hinweise darauf, ob und wie das Thema in Zusammenhang mit der gegenwärtigen Covid-19-Krise an Bedeutung gewinnen oder verlieren wird. Dabei wurde Folgendes festgestellt:
- Rund 70% der grössten börsenkotierten Schweizer Firmen rapportieren nach den GRI-Richtlinien.
- Rund ein Drittel der Firmen hat laut Angaben im Bericht ihre Anstrengungen in den letzten fünf Jahren signifikant erhöht.
- 15 der Firmen bekennen sich in ihrem Bericht klar zu den Pariser Klimazielen und richten ihre Strategie danach aus.
- Schwächen bestehen im Bereich der Wesentlichkeitsanalysen und der Integration von ESG-Themen in die zentralen Prozesse.
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The Green Bond Treasurer Survey 2020 interviewed 86 treasurers from 34 countries to identify core benefits and challenges of issuing green bonds and provides guidance to potential newcomers into green financial markets. The survey explores the end-to-end process of issuing a green bond and solicited treasurer's views on integrated sustainability and the potential to enhance growth and scale of the market.
Headline findings include
- 98% of respondents said that their green bond attracted new investors
- 91% of respondents said a green bond facilitated more engagement with investors
- 88% of respondents said they planned to issue more green bonds
- 84% of the green bonds in the sample, are listed on at least one stock exchange
- 70% of respondents said the demand for their green bond was higher
- 48% responded that the cost of funding green bonds was similar to that of vanilla equivalents
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This report summarises the main results of a stocktake conducted by the Basel Committee of its members' initiatives on climate-related financial risks. The survey finds that:
- the majority of Basel Committee members consider it appropriate to address climate-related financial risks within their existing regulatory and supervisory frameworks;
- an overwhelmingly large share of members have conducted research related to the measurement of climate-related financial risks, while a number of members identified operational challenges in assessing climate-related financial risks such as data availability, methodological challenges, and difficulties in mapping of transmission channels. A majority of the members have raised risk awareness with banks through different channels, and many banks are disclosing information related to climate-related financial risks to some extent;
- approximately two-fifths of members have issued, or are in process of issuing, more principles-based guidance regarding climate-related financial risks. However, the majority of members have not factored, or have not yet considered factoring, the mitigation of such risks into the prudential capital framework.
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Climate-related financial risks: a survey on current initiatives - EN
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This white paper looks at the ESG views and practices of over 150 private equity general partners (GPs). The survey shows that GPs increasingly recognize the importance of Responsible Investment (RI)/ ESG in generating sustainable returns for investors. GPs who took tangible action on RI/ESG implementation were able to measurably improve operational performance and reduce business risks for their investments.
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Capital Dynamics_Embracing ESG as a Value Driver_ Survey of Private Equity GPs_Apr 2020 (pdf 6.5 MB)Summary
In this white paper, Bertelsmann Stiftung takes stock of where families and family offices stand when it comes to impact investing. They identify a number of both perceived and real barriers in the shift to impact investing and lay out specific recommendations for how families and family offices may overcome these barriers. Their recommendations include communication within the family setting, building one’s internal team, the development of a solid strategy, improved open communication with peers, selection of good supporting advisor(s), pooling of resources and management of transaction costs, and finally, the willingness to get started.
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White Paper_Increasing Family Office Engagement in Impact Investing_July2020 (pdf 581.3 kB)Summary
This report examines 75 of the most influential asset managers worldwide on responsible investment governance, climate change, biodiversity and human rights. The asset managers are scored based on their performance on responsible investment governance, human rights, climate change and biodiversity.
The results showed that the majority of asset managers demonstrate a substandard approach to responsible investment
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This report sets out the Technical Expert Group on Sustainable Finance (TEG)'s final recommendations to the European Commission. It contains recommendations relating to the overarching design of the Taxonomy, as well as guidance on how users (investors and companies) of the Taxonomy can develop Taxonomy disclosures. It contains a summary of the economic activities covered by the technical screening criteria.
The final report is supplemented by a Technical Annex and Taxonomy spreadsheets.
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Taxonomy: Final report of the Technical Expert Group on Sustainable Finance - EN
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This Technical Annex supplements the TEG final report on the EU taxonomy. The Technical Annex contains a full list of revised or additional technical screening criteria for economic activities which can substantially contribute to climate change mitigation or adaptation (including assessment of significant harm to other environmental objectives), and methodological statements to support the main recommendations made by the TEG.
The TEG final report on the EU taxonomy and the Technical Annex are supplemented by Taxonomy spreadsheets.
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Climate-related risks continue to potentially endanger the stability of the financial sector, but they are only marginally addressed by Basel III capital requirements. This situation gave rise to the discussion about using capital requirements to address both the climate investment gap and climate-related risks. For several years now, the idea of using capital requirements for environmental purposes has been gaining ground. The debate has gained more attention in Europe with the mandate given early 2019 by the Commission to the European Banking Authority (EBA) to report on the possibility of introducing a prudential treatment in accordance with environmental and social objectives.
However, before this can happen, several questions about such requirements need to be resolved, particularly as regards the instrument to be used and the objective to be achieved. This report looks at these questions and aims to show the advantages and disadvantages of different approaches, in particular a Green Supporting Factor (GSF) or a Brown Penalizing Factor (BPF).
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Integrating Climate-related Risks into Banks’ Capital Requirements - EN
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The fifth edition of the Global Green Finance Index (GGFI 5) was published on 24 March 2020. GGFI 5 provides evaluations of the depth and quality of the green finance offerings of 67 major financial centres around the world. The GGFI serves as a valuable reference into the development of green finance for policy and investment decision-makers.
The GGFI is updated and published every March and September. The GGFI is compiled using 135 instrumental factors. These quantitative measures are provided by third parties including the World Bank, the Economist Intelligence Unit, the OECD and the United Nations. The instrumental factors are combined with financial centre assessments provided by respondents to the GGFI online questionnaire.
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On 9 March 2020, the Technical Expert Group on Sustainable Finance (TEG) issued further guidance on in relation to its recommendations for an EU Green Bond Standard (EU GBS), by publishing a Usability Guide. This guide offers market actors guidance on the use of the proposed standard and the set-up of a market-based registration scheme for external verifiers.
Recommendations and a model for an EU GBS were published by the TEG in its report June 2019 (see full report or 2-page summary). The TEG proposes that the Commission creates a voluntary, non-legislative EU Green Bond Standard to enhance the effectiveness, transparency, comparability and credibility of the green bond market and to encourage the market participants to issue and invest in EU green bonds.
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The Rate the Raters reports attempt shed light on how ESG ratings are being used, to better understand the universe of external sustainability ratings and to influence and improve the quality and transparency of such ratings.
The 2020 report shares insights from 17 in-depth interviews with investors, supplemented by a survey of 25 investors, highlighting their views on current ESG ratings and how they use these ratings to evaluate ESG topics. It includes findings on where investors get ESG information, how often they use ESG ratings, investor critiques of ESG ratings and perceptions of specific ratings. The report also includes specific recommendations for companies on how to approach the ESG ratings landscape, get the most out of ESG ratings and improve ESG data disclosure.
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Rate the Raters 2020: Investor Survey and Interview Results - EN
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Direct tax incentives for individual investors are a policy measure governments can use to generate funds to develop the sustainable business sector. Existing research demonstrates that many investors see sustainable businesses as less profitable, direct tax incentives could contribute toward changing behaviour and then beliefs. This article aims to provide the legal perspective, particularly demonstrating the rationale and feasibility from the perspective of fundamental principles of taxation, EU state aid rules and Swiss legislation. The conclusion is that, depending on how such tax incentives are structured, they can be compatible with both.
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This report investigates the extent to which climate-related financial risks are part of the fiduciary duty of financial service providers in Switzerland under current law. The analysis was conducted by MME based on a mandate by WWF Switzerland.
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Klimawandel: Treuhänderische Pflichten der Finanzdienstleister - DE
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This report covers some of the major trends that will shape sustainable investing in the years to come. While assets under management with an environmental, social and governance impact (ESG) mandate are growing exponentially, there are some notable challenges ahead, including how to integrate sustainability considerations in passively managed portfolios tracking non-ESG indices and the lack of relevant capacities at financial institutions.
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