Switzerland is one of the world’s leading financial centres. Not only is it a global leader in wealth management, but it is also one of Europe’s major asset management centres and a world-class hub for insurance services. Moreover, the Swiss financial sector has proven that it has the capacity and the know-how to contribute to global sustainability efforts.
There is no doubt that the financial sector has a key role to play in providing capital and steering investment decisions in a direction that supports the achievement of global objectives such as the UN SDGs and the Paris Agreement.
Sustainable finance has a strong foothold in Switzerland, illustrating the many facets of the country’s solid sustainability framework that has evolved over the past four decades.
Made in Switzerland: global firsts in sustainable finance
As a leading financial centre, Switzerland has, indeed, a long tradition in sustainable finance dating back to 1983 with the birth of the first independent pension fund focusing solely on sustainable investments. Its economic and political stability has paved the way for many pioneers in finance to identify sustainability trends at an early stage. In more ways than one, the country is a first-mover in creating a financial landscape that contributes to a sustainable world.
Innovative solutions for sustainable investment and insurance services
Switzerland has a rather strong position in sustainable wealth and asset management as a result of continuous market growth over the past 10 years – as well as the efforts made in the insurance industry.
The country’s leading role in private wealth management has laid the foundation for the creation of sustainable investment services both for private and institutional clients. Local research firms have been highly instrumental in crafting sophisticated offerings not just for Switzerland, but also for international markets.
By the end of 2018, the volume of sustainable assets managed in Switzerland reached CHF 716.6 billion, which represents a share of 21% of total assets managed in Switzerland, double the size of the global share as calculated by McKinsey.
The recent dynamic market growth in sustainable assets is mainly due to the fact that insurance companies and large Swiss pension funds have recognised the advantages of adopting sustainable investment policies.
Spearheading the impact investing field
One special talent of the Swiss financial market is its strength in managing investments that contribute to the development of lower and middle-income countries. Inspired by the work of international organisations headquartered in Geneva, as well as a large number of charitable foundations, and having a long tradition in humanitarian aid, Switzerland has become a centre of excellence in microfinance early on, and today manages 32% of global impact investments and 41% of global microfinance funds. This segment is particularly important for closing the financing gap to achieve the UN Sustainable Development Goals (SDGs).
Education: a commitment to excellence
Outstanding academic talent is a vital prerequisite for innovative financial services and solutions. Switzerland is home to several high-ranking universities, technology institutes and other academies that place the country’s education system among the best in the world. In addition, the growing number of programmes devoted to sustainability and sustainable finance make it an even more attractive centre for learning.
Favourable business environment and sustainability as part of the constitution
Finally, sustainability in finance and in the real economy have been fostered by Switzerland’s political and economic stability and its favourable business environment. Sustainability isn't just ingrained in Swiss culture, it's even part of the federal constitution’s Articles 2 and 73. It is clear that the main Swiss political institutions are willing to support this trend towards a more sustainable financial system. As Ueli Maurer, President of the Swiss Confederation in 2019, put it:
“Sustainability as a strategic objective creates incredible opportunities for Switzerland’s financial centre. Particularly when paired with digital technology, sustainability drives innovation forward and makes finance more competitive.”
About Swiss Sustainable Finance (SSF)
The mission of Swiss Sustainable Finance (SSF) is to strengthen Switzerland’s position as a leading voice and actor in sustainable finance, thereby contributing to a sustainable and prosperous economy. The association, founded in 2014, has representative offices in Zurich, Geneva and Lugano. Currently, SSF unites over 130 members and network partners from financial service providers, investors, universities and business schools, public-sector entities and other interested organisations. Through research, capacity-building and the development of practical tools and supportive frameworks, SSF fosters the integration of sustainability factors into all financial services. An overview of Swiss Sustainable Finance’s current members and partners can be found on its website: www.sustainablefinance.ch