November 24, 2022
Pacta Climate Test 2022: Potential for climate-friendly financial flows

In the PACTA Climate Test published today, the Federal Office for the Environment (FOEN) has again taken stock of the climate compatibility of financial flows. While the FOEN identifies potential for further development in the report, AMAS points out that Swiss asset managers provide their clients also with other transparent methods for the differentiated assessment of the climate compatibility of a portfolio.

After 2020, Swiss financial institutions have again been invited by the Federal Office for the Environment (FOEN) to participate in the voluntary "PACTA Climate Test 2022" in 2022. The "Paris Agreement Capital Transition Assessment" aims to create transparency in an internationally coordinated manner in the financial flows and portfolios of the various financial sectors regarding their alignment with the goals of the Paris Climate Agreement. This has the goal of limiting global warming to 2 degrees Celsius.

The report published today sheds light on and provides important insights into the progress made by the Swiss financial sector regarding the climate compatibility of financial flows. The Asset Management Association Switzerland (AMAS) had - as in 2020 - supported its members to participate in the "PACTA Climate Test 2022". The creation of comparable transparency, as intended by the PACTA methodology, as well as measurable bases to support climate-friendly investment decisions is an important concern for AMAS. However, PACTA is only one of numerous methodologies for measuring climate impact and is not applied across the board in the industry.

AMAS is focusing on Swiss Climate Scores

Since asset managers act on behalf of their clients, implement their investment objectives and thus fulfil their fiduciary duty, it is highly relevant that the methods used for a differentiated assessment of the climate impact of a financial product and portfolio also meet the needs and information requirements of the clients so that they can make qualified investment decisions.

For this reason, AMAS and the Swiss asset managers are currently focusing on the implementation of the Swiss Climate Scores. Thanks to six indicators, these provide statements on the transition towards net zero and thus on the effective impact of a financial product, in addition to transparency regarding climate compatibility.

In the current year, AMAS has also introduced the environmentally relevant indicators for Swiss real estate funds, which are binding for AMAS members through the self-regulation on transparency and disclosure for collective assets with sustainability relevance published in September 2022. Furthermore, by joining the Net Zero Asset Manager Initiative a year ago, AMAS has committed itself to the net zero goal and to promoting this important initiative among its members.

AMAS supports all methodologies to create and increase transparency on the climate impact of portfolios. Currently, it recommends the use of Swiss Climate Scores to increase the significance and transparency of the climate impact of financial investments and financial flows.