Swiss banks and retirement funds are still investing enormous sums in fossil fuel companies and thereby contributing to global warming. This is the conclusion of a government climate compatibility test. The Swiss National Bank (SNB) didn’t even take part in the test – and is lagging far behind foreign institutions in climate protection.
About 180 Swiss financial institutions took part in voluntary climate compatibility tests this year. The Federal Office for the Environment commissioned an independent think tank, 2° Investing Initiative, to screen their investments for climate compatibility. For the first time, wealth management funds took part, as well as pension funds and banks. This shows that awareness of the influence of stocks and bonds on the global climate has reached the world of finance. And those who also took part in the government’s climate tests three years ago fared better than their competitors, the report found.
However, the Swiss financial sector is still generally much too focused on fossil fuels, bearing in mind that the goal is to limit the increase in the global temperature to 1.5 degrees Celsius. According to the report, published in mid-November, Swiss banks and pension funds invest four times more in companies that produce electricity from fossil fuels such as coal and gas than in producers of renewable energy. They even, on average, support an expansion of coal and oil production. These investments would have to diminish considerably in order to fulfil the terms of the Paris climate agreement, which Switzerland signed in 2015. The fact is that more than half of the institutions which claimed to exclude coal from their investments have not taken this step.
The names of the participating institutions in the climate compatibility tests, known under the acronym Pacta 2020 (Paris Agreement Capital Transition Assessment), are not publicly accessible. The Federal Office for the Environment says that 80% of the sector took part, meaning the conclusions are “representative” of the whole Swiss financial market. The financial institutions that took part will now receive an individual report showing them how they stand in comparison to the competition.
Notably, the Swiss National Bank didn’t participate in the survey, SWI swissinfo.ch has learned. In response to the question of whether it would take part, the bank replied that it tries to invest in as “market-neutral” a way as possible and is therefore not overweight or underweight in individual sectors. It added that “the result of a possible climate test would essentially reveal the same conclusion as the ‘world stock portfolio’, which is calculated as a reference point in the scope of this test.”
Source: swissinfo.ch