Switzerland to launch voluntary climate-disclosure guidelines for companies and investors

Switzerland is readying itself to introduce voluntary climate-disclosure guidelines for companies and investors, as part of a slew of policy changes and research initiatives taking place in the country.

The nation’s Federal Office of the Environment has launched a public consultation inviting industry bodies, investors, NGOs and other stakeholders to give feedback on guidance aiming to help investors “actually assess the CO2 relevance of assets”, alongside a wider overhaul of national climate legislation.

“To implement the Paris climate agreement, a total revision of the CO2 law is necessary, which enshrines the objectives and measures by 2030 legally,” the ministry said in a statement.

Switzerland already has a levy on C02 emissions, and an independent emissions trading scheme that is currently undergoing a consultation around whether it can link up to the EU Emissions Trading System. Last September, the ministry commissioned South Pole and CSSP to research the carbon footprint of Swiss listed equity funds, and the potential costs of associated with those emissions based on different carbon-pricing scenarios.

The department is now doing similar analysis focused on the carbon footprint of the fixed-income market, according to Andrea Burkhardt, head of Switzerland’s climate division. It expects to publish the results this month. Following that, it will look at the profitability of funds focused on environmental, social and governance opportunities, compared with their conventional ‘plain vanilla’ peers in the country.

Burkhardt said that, despite the government’s proactive stance on climate and finance, Switzerland had no plans to follow France’s Article 173 model, through which companies and investors will be legally obliged to disclose their carbon footprints, or explain why they don’t.“It’s very useful to learn from France and their laws on this, but for now we would not suggest any legislation around investors and climate disclosure that would be comparable with what they have implemented.”

The guidelines are hoped to promote standardisation around climate disclosure, she added.

“The Swiss government wants to work with other international bodies, including other governments and NGOs, to develop clearer indicators and more meaningful information to actually assess the C02 relevance of assets. That’s how we want to contribute as a government – to help create standards. If we provide the tools to disclose in an efficient, comparable way, we lower barriers for investors and companies.”

The consultation will run until November, with parliamentary debate expected to kick off next autumn. The new climate legislation – which focuses on how Switzerland can mitigate and adapt to climate change – is expected to be implemented in 2021.

A report this week from the Swiss Finance Institute warned that there was “an urgent need for a credible commitment to, and stronger support for, sustainable finance from the upper echelons of the Swiss financial sector”. It added that “all large players in the Swiss financial sector are deal with sustainable finance, at least to some minimum degree”, claiming this was driven by the international move towards sustainable finance, and the anticipation of higher demand for sustainable financial products.

“There should be a careful examination of whether specific policy and regulatory measures to be found elsewhere, such as reducing investment barriers for pension funds and other institutional investors, or an official endorsement of sustainability as a core principle of the Swiss financial market place, could be implemented by Swiss policymakers. However, the main impetus for a broader adoption of sustainable finance must come from the core of the financial sector itself.”