Setting sail for a carbon-neutral future: Net Zero Insights 2022

Progress update at the start of a long and joint effort to achieve a net zero Swiss financial centre

By adopting its 2050 climate strategy, the Swiss Federal Council in accordance with the Paris Agreement is aiming for Switzerland to achieve a net zero economy and to contribute to limiting global warming to 1.5°C compared to pre-industrial levels.

To reach these climate goals, every sector needs to play its role and support decarbonisation with timely and impactful actions. While a large share of the burden lies with emission-intensive sectors, the financial sector can provide essential support for the transition. For the Swiss financial sector, this implies concrete action to accelerate decarbonisation, specifically through its domestic and international financing and investment management activities.

While there is a lot of work ahead, the first results show that the Swiss financial market has a proactive role in transitioning the world to net zero and thereby confirming Switzerland as a global leading hub in sustainable finance.

The Asset Management Association Switzerland (AMAS), the Swiss Bankers Association (SBA), the Swiss Insurance Association (SIA) and Swiss Sustainable Finance (SSF) have created a study together with PwC giving their stakeholders and society the possibility to review the progress made to achieve a net zero Swiss financial centre.

Contributors

On behalf of the following four associations, PwC Switzerland has analysed the current status of the voluntary commitment for the first time.

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Executive summary

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"The insurance industry is making a clear commitment to sustainability, incorporating ESG criteria into 80 percent of its self-managed investments."

Urs Arbter CEO, Swiss Insurance Associaton

"SSF has been committed to a sustainable Swiss financial center for many years. This study illustrates that the financial industry is becoming increasingly aware of its responsibility to mitigate climate change. It thus lays the foundation for measurable progress on the issue."

Sabine Döbeli CEO, Swiss Sustainable Finance

"We are rising to the challenge of climate change. By creating transparency we lay the foundation for all financial centre players to take further steps."

Jörg Gasser CEO, Swiss Bankers Association

"The Swiss asset management industry sees itself in an important position in promoting climate protection and making a measurable contribution to reducing global CO2 emissions. With this study, we have taken a fundamental step towards being able to transparently identify further progress along this path."

Adrian Schatzmann CEO, Asset Management Association

“Carbon neutrality is an inevitable part to become a sustainable society. To reach it, we not only need to have a clear vision of the target state, but also from the pathways that lead us there as individuals and entrepreneurs.”

Andreas Staubli CEO, PwC Switzerland

Key learnings

New standards

Net zero alliances and initiatives are becoming standards for net zero engagements within the financial services industry. An active communication on net zero alliances presents institutions with an opportunity that will become more relevant in the future.

Engagements are an opportunity

Engagements in net zero alliances represent a credible opportunity to make a valuable contribution to achieving the goals of the Paris Agreement. Following the launch of GFANZ in April 2021, a steady stream of additional financial institutions has been engaged.

Larger institutions joined net zero alliances

Remarkably, proportionately more larger institutions have tended to join net zero alliances. The efforts necessary to implement net zero policies as well as the uncertainties associated with the implementation, which pose relatively greater hurdles for smaller institutions in particular, are certainly likely to be reasons for this. Smaller players will have to develop their paths first as they do not have the resources of the larger players to develop all these plans.

A long way to go

It will require many more years of effort to achieve the goals of the Paris Agreement. By setting up challenging net zero goals and pathways as well as reporting on progress, the journey has just started.