December 16, 2022
A credible sustainable financial centre without greenwashing

Today, the Federal Council published its Sustainable Finance Strategy for the Swiss financial centre until 2025 and defined fields of action for measures to be developed. The Asset Management Association Switzerland (AMAS) welcomes this strategy update and, together with the other Swiss financial associations, supports the common goal of establishing a leading sustainable financial centre.

Switzerland needs a holistic climate strategy

AMAS is convinced that this goal, and in particular the net zero target, can only be achieved in line with the long-term Swiss Climate Strategy 2050, which includes all parts of the Swiss economy. We do not see isolated national sectoral agreements for the financial industry as being conducive to achieving this goal.

New product category for impact investments

Among the further measures for a leading sustainable financial centre, the Federal Council has identified the mainstreaming of impact investments. A working group with industry representatives is to examine the introduction of a new product category oriented towards the characteristics of a Long-Term Investment Fund (LTIF). AMAS considers the integration of the distribution perspective to be central, as such products have a higher degree of complexity and are associated with additional risks compared to traditional investment products.
Previous experience with the European Long-Term Investment Fund (ELTIF) has shown that a corresponding effect is only achieved with private investors if the threshold for the minimum investment is set correspondingly low (for example at CHF 10,000).

Financial products must show sustainability impact

Today, the Federal Council also defined the further procedure to avoid greenwashing in the financial market. Like the Federal Council, AMAS also takes the view that there needs to be a clear and general understanding of when a financial product or service can be offered as sustainable. AMAS has already set this out comprehensively in its self-regulation and will contribute to the working group set up to prevent greenwashing.

AMAS welcomes the fact that the Federal Council advocates differentiated communication to investors on the sustainability impact of investment products. Products that only include sustainability indicators or exclude certain companies lack a direct link to sustainability goals.

Effect of self-regulations to be seen

In its self-regulation on transparency and disclosure for collective assets with sustainability reference published last September, AMAS no longer classified such products as "sustainable". The binding requirements contained in the self-regulation serve the goal of establishing high quality standards for sustainability-related financial investments in the Swiss asset management industry.

Both the self-regulation and the self-regulation of the Swiss Bankers Association (SBA) continue to pursue the goal of preventing and combating greenwashing at the organisational and product levels specified by the Swiss Financial Market Supervisory Authority (FINMA). AMAS is convinced of the subsidiary role of the state communicated by the Federal Council last year. The implementation of the two self-regulations and the development of their effect remain to be seen.