Last year marked a significant increase in sustainable investment activity from Swiss asset owners and asset managers, according to Swiss Sustainable Finance (SSF).
The organisation – which aims to boost awareness of sustainability issues in Switzerland – reported a clear trend towards activity related to environmental, social and corporate governance (ESG) issues.
“Pension funds are sensing the mounting public pressure to address the impact of their investment activity, and they are looking for ever more systematic ways to do so,” the study noted.
The researchers added: “More and more asset managers are integrating ESG factors into the investment processes of entire product lines, often driven by corresponding demand from their (primarily institutional) clients.”
The new record figure of CHF390.6bn (€338.3bn) of ESG assets managed in Switzerland was achieved “despite a stricter definition of sustainable investments underlying this study”.
However, the 82% increase reported by SSF could not be taken at face value, the organisation pointed out, as the number of respondents to the study grew from 41 to 66 year-on-year. Half of participants were asset owners, including insurers and public and corporate pension funds.
Overall, institutional investors accounted for 86% of all sustainable investments.
Asked about their motivation for applying ESG standards, asset owners mainly mentioned “the alignment of investments with international or national norms and/or specific values of their organisation”.
“It is followed by the vision of fostering a long-term sustainable economy and society in second place,” the authors added.
Of the different sustainable investment approaches, the study found that all were growing in volume, with the expection of negative screening. The authors said this was mainly “due to a more restrictive definition of what counts as exclusion criteria”.
Shareholder voting saw the largest increase year-on-year among the widened group of participants, followed by ESG integration and norms-based screening.
The SSF emphasised the importance of “the alignment of definitions and understandings of [sustainable investment] approaches as an important step in order to anchor sustainable finance as an established topic within the financial industry”.
See this month’s issue of IPE for the latest Country Report for Switzerland