Digital library on sustainable finance
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Summary
This report analyses what it would mean for private banks to ambitiously align themselves with international environmental goals.
The analysis finds three key factors in paving the way for the alignment of private banking activities with international enviromental goals: Integrating material environmental risk and potential adverse environmental impact into decision-making processes, having a strong scientific basis and set science-based targets for all environmental objectives and aligning core business activities with the global environmental goals.
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Private Banking and International Environmental Goals – Aligning Misalignment - EN
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This report covers the topic of nuclear weapon risks for global capital markets and economies as it relates to ESG and impact investors. The report discusses the causes of the state of affairs with respect to nuclear threats and highlights some of the opportunities for an increased focus on nuclear weapons risks by investors.
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Preventing Nuclear Catastrophe - July 2020 (pdf 1.3 MB)Summary
In this paper, the authors take an in-depth look at climate-related financial risks (so-called Green Swan risks). The authors derive a set of important criteria to ensure that climate risk tools provide high quality, comparable, and decision-relevant results. 16 climate transition tools were assessed and their quality, comparability and decision-relevance were estimated. Based on this, potential next steps for providers, conclusions for tool users and guidelines for supervisory authorities were derived.
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202007_Bingler_Taming_the_Green_Swan (pdf 6.5 MB)Summary
This report explores the growth of passive ESG (environmental, social and governance) investing and the debate on the effectiveness of passive versus active ESG funds. The paper draws on publicly available data and insights from the US SIF Foundation research advisory committee and from additional asset manager members of US SIF. The report also includes profiles of four ESG ETFs and four index-based mutual funds that demonstrate a range of approaches to passive ESG investing.
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The Swiss Sustainable Investment Market Study 2020 sheds light on sustainable investment (SI) developments in Switzerland, with a total of 76 respondents, including many of the large asset managers and asset owners covered by the survey.
The total volume of sustainable investments reached CHF 1,163.3 billion by the end of 2019. This includes all reported sustainable investment funds, sustainable mandates and sustainable assets of asset owners. As a new feature, this year’s market study looks at common combinations of SI approaches prevalent in the market. This is particularly valuable, as it is a useful contribution to the growing political debate about the quality and impact of investments.
The market study also includes a comprehensive chapter on regulatory issues in Switzerland, the EU and globally.
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This publication, commissioned by the Swiss Federal Office for the Environment, lays out the methodological foundations for sustainable finance with a focus on water as an environmental resource. The guide focuses on how investors can engage with investees to achieve SDG 6 through basin water security.
While water-related risk is being recognised by many investors, not many take into account the effects of their investment and financing decisions on water quantity and quality in the longer term or engage actively with investee companies. Investors have the possibility to play an active role in contributing to solving the water crisis at scale. Addressing water risks is crucial as it helps mitigate biodiversity and climate risks and achieve the goals of the Paris Agreement as well as the Convention on Biological Diversity (CBD).
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An Investor Guide on Basin Water Security Engagement: Aligning with SDG 6 - EN
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The 10th edition of the Annual Impact Investor Survey provides a comprehensive overview of the impact investing market. The survey covers 294 impact investors who collectively manage USD 404 bn of impact investing assets, thus representing a significant part of the global impact investing market (valued at about USD 715 bn).
The report looks at respondents’ investment activity during 2019 and their plans for 2020, market developments over the past decade, and challenges the market is facing going forward. Respondents also shared insights on how COVID-19 might affect their activities.
The report also includes:
- An updated market sizing analysis, which estimates the current market size at USD 715 billion;
- Trends analysis of 79 repeat Survey respondents, to show changes and trends over time;
- Insights on topics such as climate investing, catalytic capital, the evolution of impact measurement and management practices, and policy developments over the past decade.
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This article asks how sustainable investing contributes to societal goals, conducting a literature review on investor impact—that is, the change investors trigger in companies’ environmental and social impact.
The authors distinguish three impact mechanisms: shareholder engagement, capital allocation, and indirect impacts, concluding that the impact of shareholder engagement is well supported in the literature, the impact of capital allocation only partially, and indirect impacts lack empirical support. The results suggest that investors who seek impact should pursue shareholder engagement throughout their portfolio, allocate capital to sustainable companies whose growth is limited by external financing conditions, and screen out companies based on the absence of specific environmental, social, and governance practices that can be adopted at reasonable costs. For rating agencies, the article outlines steps to develop investor impact metrics. For policy makers, it highlight that sustainable investing helps diffuse good business practices, but is unlikely to drive a deeper transformation without additional policy measures.
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Can Sustainable Investing Save the World? Reviewing the Mechanisms of Investor Impact - EN
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This document is a result of an initiative of the UN Environment Programme’s Principles for Sustainable Insurance to develop the first global guide to manage ESG risks in risk assessment and insurance underwriting.
The focus of this report is on non-life insurance business—also known as property and casualty insurance business.
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Managing environmental, social and governance risks in non-life insurance business - EN
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The NGFS has developed Climate Scenarios (the scenarios) to provide a common starting point for analysing climate risks to the economy and financial system. While developed primarily for use by central banks and supervisors they may also be useful to the broader financial, academic and corporate communities. This document provides an overview of the key transition risks, physical risks and economic impact of climate change.
In addition to this document, the NGFS also published a Guide to climate scenario analysis.
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NGFS Climate Scenarios for central banks and supervisors - EN
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The Guide to climate scenario analysis for central banks and supervisors provides practical advice on using scenario analysis to assess climate risks to the economy and the financial system. It is based on the initial experiences of NGFS members and observers and also aims to advance the discussion on the methodologies used.
Along with this Guide, the NGFS has also published a set of Climate Scenarios.
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Guide to climate scenario analysis for central banks and supervisors - EN
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The Swiss Funds & Asset Management Association (SFAMA) and Swiss Sustainable Finance (SSF) drew up detailed recommendations for the Swiss asset management industry on how to implement sustainable practices effectively. The recommendations and associated core messages are intended to actively help asset managers incorporate sustainability criteria into their investment processes.
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Sustainable Asset Management: Key Messages and Recommendations of SFAMA and SSF - DE
Sustainable Asset Management: Key Messages and Recommendations of SFAMA and SSF - FR
Sustainable Asset Management: Key Messages and Recommendations of SFAMA and SSF - EN
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This is the first time that the Swiss insurance industry has reported on its commitment to sustainability in a joint report. The SIA Sustainability Report covers the areas of investment, operational ecology and underwriting. It is based on data supplied by 32 member companies of the Swiss Insurance Association (SIA). With their investments, these companies account for 94 per cent of all investment made by private insurers (a total of CHF 582 billion as at 31 December 2018).
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SIA 2019 Sustainability Report - DE
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In June 2020, the Swiss Bankers Association (SBA) published a new set of guidelines on the integration of environmental, social and governance (ESG) criteria into the investment advisory process.
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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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