Swiss Federal Council Discusses Sustainability in Financial Sector
During its meeting on June 24, 2020, the Swiss Federal Council adopted a report and guidelines on sustainability in the financial sector. The report provides an overview of the international developments and the position of Switzerland with respect to sustainable finance. The report focuses on environmental aspects and examines thirteen measures for sustainability in the financial sector in detail, some of which are also being discussed in the EU. The measures primarily concern transparency, investment activities, training and further education, and risks. The Federal Council has published corresponding guidelines based on the report presented. In addition, FINMA notified that it is addressing the subject of climate-related financial risks as part of its supervisory remit. It is also reviewing regulatory approaches for improved transparency regarding climate-related financial risks by major financial institutions.
Federal Council wants to review the regulatory framework for optimization potential, expand its international commitment, and intensify exchanges with the parties involved. To achieve the aim of making Switzerland a leading location for sustainable financial services, the Federal Council wants to shape the framework conditions to improve competitiveness of the financial center in Switzerland while ensuring that the financial sector can make an effective contribution to sustainability. The framework conditions for the Swiss financial center in the area of sustainability have been identified and will be further developed by the end of 2020. These include the following:
- Information for market participants—Environmental and climate information for financial products and companies, including financial institutions, should be made available to all market participants in a systematic and comparable way.
- Quality of information—The chosen reporting standard is to be measured against the traceable and effective achievement of sustainability goals in accordance with the 2030 Agenda reference framework.
- Quality of service—Informed advice, a high level of training and further education in the sector, and products that are efficiently and effectively geared to achieving sustainability goals are key factors on the supply side.
- Innovation—In general, including in the three areas mentioned above, the use of digital business and analysis models plays a central role.
- Risk pricing—Financial risks from environmental and climate developments must be identified. This also includes the long-term perspective and developments during the transition and adaptation phase.
- Exportability—International developments, especially in EU, must be closely monitored to identify at an early stage which steps are necessary to maintain competitiveness. Switzerland remains committed to the exportability of high-quality financial services, which makes the sustainability of Swiss financial services transparent in the international context.
Related Links
- Press Release of Swiss Federal Council
- Press Release of FINMA
- Report (PDF in German)
- Guidelines (PDF)
Keywords: Europe, Switzerland, Banking, Insurance, Securities, Sustainable Finance, ESG, Climate Change Risk, FINMA, Swiss Federal Council
Previous Article
CMF Reports Performance of Supervised Banks Amid COVID-19 CrisisRelated Articles
EBA Updates List of Validation Rules for Reporting by Banks
EBA issued a revised list of validation rules with respect to the implementing technical standards on supervisory reporting.
EBA Responds to EC Call for Advice to Strengthen AML/CFT Framework
EBA published its response to the call for advice of EC on ways to strengthen the EU legal framework on anti-money laundering and countering the financing of terrorism (AML/CFT).
NGFS Advocates Environmental Risk Analysis for Financial Sector
NGFS published a paper on the overview of environmental risk analysis by financial institutions and an occasional paper on the case studies on environmental risk analysis methodologies.
MAS Issues Guidelines to Promote Senior Management Accountability
MAS published the guidelines on individual accountability and conduct at financial institutions.
APRA Formalizes Capital Treatment and Reporting of COVID-19 Loans
APRA published final versions of the prudential standard APS 220 on credit quality and the reporting standard ARS 923.2 on repayment deferrals.
SRB Chair Discusses Path to Harmonized Liquidation Regime for Banks
SRB published two articles, with one article discussing the framework in place to safeguard financial stability amid crisis and the other article outlining the path to a harmonized and predictable liquidation regime.
FSB Workshop Discusses Preliminary Findings of Too-Big-To-Fail Reforms
FSB hosted a virtual workshop as part of the consultation process for its evaluation of the too-big-to-fail reforms.
ECB Updates List of Supervised Entities in EU in September 2020
ECB updated the list of supervised entities in EU, with the number of significant supervised entities being 115.
OSFI Identifies Focus Areas to Strengthen Third-Party Risk Management
OSFI published the key findings of a study on third-party risk management.
FSB Extends Implementation Timeline for Framework on SFTs
FSB is extending the implementation timeline, by one year, for the minimum haircut standards for non-centrally cleared securities financing transactions or SFTs.
