Jacqueline Oh, managing director of the Swiss Association for Responsible Investments, tells Susanna Rust that Switzerland is lagging behind some other European countries but that it is catching up
At a glance
• The Swiss Association for Responsible Investments (SVVK/ASIR) was formed in December 2015.
• It has seven members: first pillar fund buffer compenswiss/AHV; the pension scheme for telecommunications company Swisscom (comPlan); accident insurance fund Suva, public pension fund Publica; and the pension funds for the postal service (Pensionskasse Post); federal railways (Pensionskasse SBB); and the canton of Zurich (BVK).
• Jacqueline Oh was appointed managing director in May 2016, after working some eight years in banking, primarily at Credit Suisse but most latterly at Julius Baer. At both, she worked on responsible investment product offerings.
• Patrick Uelfeti, deputy CIO at Publica, is the association’s president.
Earlier this year, ShareAction and WWF conducted a survey upon responsible investment by Swiss pension funds, concluding that, on balance, the largest have “a long way to go”.
That may be, but Jacqueline Oh, managing director of the Bern-based Swiss Association for Responsible Investments (SVVK/ASIR), is sanguine.
“If you compare [them] to the Nordics, Swiss pension funds are not as advanced when it comes to responsible investment, but you can really tell that they are catching up,” she says. “Here we have so many funds, from very small ones to large schemes, and there is no standard answer on ESG investing but it is on everyone’s agenda.
“Investment guidelines and set-ups can vary a lot, so this makes it difficult to generalise as to what would be the best approach,” she adds.
As concerns the ShareAction/WWF survey, Oh notes that a big part of it concerned transparency, and she says that the mindset has changed, or at least is changing.
“Providing transparency – that’s something they get now,” she says.
A big step, according to Oh, was the formation of the responsible investment association. SVVK/ASIR now counts seven pension funds as members, which together represent more than CHF150bn (€137bn) in assets.
Rather than having a lobbying or campaign focus, it was founded as a service provider to meet the needs of its members.
Patrick Uelfeti, deputy CIO at Publica, Switzerland’s largest second pillar pension fund, is its president, with Oh having joined in May.
Her main task, in partnership with the members, is to carry out screening of portfolios based on a set of derived criteria, which are based on domestic and international law and conventions.
This is intended to identify problematic investments and serves as a starting point for deciding whether to start engaging with those or to divest. It will be conducted across members’ equity and credit portfolios. The association recently chose an external specialist to aid with the screening, and has an engagement provider lined up for when it starts this part of the project.
“But, first we need to know what is in the portfolios and then we can decide which cases should be looked at for engagement and which for disinvestment,” says Oh.
She says that although she is the day-to-day lead on the screening, members are actively involved.
“There are a lot of discussions about what should be weighted how, depending on how you calibrate the criteria the rankings of the companies,” she says. “For now, I’m setting everything up but I will go back to the members and there will be discussions about the calibration and scope for small adaptations.”
There has been interest from pension funds to join the association, but a decision on this will not be taken before the end of the year, according to Oh.
“The important thing for now is to get the operation set up and then the board members will discuss membership at the end of the year,” she says.
Asked about the role of pension fund members in influencing responsible investment stances, Oh says that, so far, there has been little pressure but that “the request for more disclosure on environmental, social and governance (ESG) has been increasing and my assumption that this will continue”.
On regulation, Oh says that “unlike France or the Nordics there are no regulatory requirements in Switzerland concerning ESG matters, so far”.
She continues: “In my view, regulation isn’t always the best way to integrate it into the investment process because, as I mentioned before, there is no one-size-fits-all solution,” she adds.
The Swiss Federal Office for the Environment (FOEN) recently launched a consultation on the country’s climate policy, and has proposed that it develop guidelines for assessing and reporting on the financial markets’ impact on climate warming.
It said that Swiss investment and financing behaviour is not currently aligned with the international community’s goal of adapting a financial system to support climate targets.
The FOEN does not, however, have plans to make this a legal requirement for investors as in France, which passed a law requiring institutional investors to report on ESG in general, and on their carbon footprint and energy strategy in particular. The head of the government’s climate division, Andrea Burkhardt, has ruled out prescriptive legislation
Oh acknowledges that climate change is a major topic, but again stresses that Swiss pension funds are at different states of engaging with this.
“It’s clearly a topic my members are aware of, but it is not something the association is working on at the moment,” she says. “Some of the association members are looking into it and doing something, some have decided not to take any action for now.”
Publica is an example of a SVVK/ASIR member that has taken action. Early this year the CHF37bn fund decided to divest from coal producers because of the financial risks posed by their vulnerability to policy measures to combat climate change, specifically carbon taxation.
It decided that oil and gas companies were “relatively broadly diversified and capable of adapting” but that this was not the case across the coal sector.
Publica is thought to be the first Swiss pension fund to divest on climate change-related grounds, although local government schemes are coming under pressure to do so, too.
Pensions In Switzerland: Parliamentary ping pong
- Currently reading
Interview: Jacqueline Oh, Swiss Association for Responsible Investments