The country-level report published in partnership with the Swiss Federal Office for Environment: "Bridging the Gap: Measuring Progress on the Climate Goal Alignment and Climate Actions of Swiss Financial Institutions".
The full report is available here.
Participating institutions can access their individual results following the link below.
Over 4,000 portfolios from 179 financial institutions representing roughly 80% of the market have been assessed in a first-of-its kind study of the Swiss financial sector’s alignment with climate goals. The analysis of over CHF 3 trillion in financial assets shows progress on alignment with climate goals, but major gaps remain.
Critically, the assessment showed that the Swiss financial sector’s consideration of climate issues has increased demonstrably since the 2017 study, resulting in:
- Measurable improvement in terms of climate compatibility across a number of key sectors, notably gas on the high-carbon end and electric vehicles on the low-carbon end, both of which are now aligned with the IEA Sustainable Development Scenario;
- A dramatic increase in climate actions, such as shareholder engagement, with over 40% of recorded actions taking place in the past 18 months. Financial institutions that participated in the 2017 pilot led the way, with more than 50% saying they had taken action based on the results of that assessment.
- Strong progress in mainstreaming this topic: 69% of participants had defined a climate target or aspiration for at least one asset class; 65% were part of at last one sustainability initiative; and around 20% of portfolios submitted were labeled as ESG.
But despite improvements from 2017, the 2020 assessment shows that overall, Swiss financial markets are still not aligned with the Paris Agreement goals:
- In spite of increased deployment of new “green” technologies, the retirement of high-carbon technologies like coal power capacity is still far too slow to achieve the 1.5° or even 2°C goal;
- In terms of climate actions, portfolio analysis of financial institutions with coal exclusion policies showed that more than 50% of their listed equity and more than 70% of their corporate bond portfolios still contained coal assets;
- The delta between reduction in portfolio emissions and real-world impact may be widening. While the aggregate exposure to coal power in the listed equity portfolio of financial institutions participating in both 2017 and 2020 decreased by around 15-20%, the underlying investment of companies in coal power led to a nearly 50% increase in installed capacity. These findings highlight the benefit of tracking progress over time and distinguishing portfolio vs. real-world impact.