Pensionskasse des Kantons Schwyz (PKSZ), the CHF3bn (€3.2bn) pension fund of the Swiss canton of Schwyz, will continue to invest in oil and gas companies – including those operating in authoritarian regimes – arguing that greening the portfolio would damage returns.
The canton’s government has rejected a motion tabled by members of the Social Democratic Party (SP) to amend the law governing the fund’s investments, which would have introduced sustainability criteria and excluded fossil fuel holdings.
The executive council, led by finance department head Herbert Huwiler, who also chairs the PKSZ board, said that imposing stricter sustainability rules would “likely have a negative impact” on expected returns.
The government added that sustainable investment rules would both reduce benefits and restrict the board’s authority as set out in law. It described the SP’s motion as being based on moral prejudice, framing sustainable investment as a “black and white” issue.
The political push followed an investigation by WAV Recherchekollektiv and non-profit newsroom Correctiv, which found that PKSZ has exposure to oil and gas companies, including those operating in autocratic states.
According to the research, the fund invests via vehicles run by large asset managers such as Zürcher Kantonalbank (ZKB), UBS Asset Management and BlackRock.
Around €500m is allocated to a ZKB-managed equity fund that invests more than 70% of its assets in technology companies such as Apple, Microsoft, Tesla and Meta, alongside oil and gas majors ExxonMobil and Chevron.
The pension scheme also holds bonds issued by oil-producing autocracies, including Saudi Arabia, Qatar and the United Arab Emirates, the research showed.
Asked if PKSZ will continue investing in oil and gas, or will consider integrating sustainability criteria in its investment strategy, Martin Bieri, managing director of the pension fund, told IPE an asset and liability management (ALM) review is scheduled for next year, noting that any changes in this process remain to be seen.
PKSZ is among a shrinking minority of Swiss pension funds not subject to legal or regulatory ESG requirements. The integration of sustainability into investment regulations has increased sharply in recent years, according to Swisscanto.
Almost three-quarters of public pension funds have now adopted ESG criteria. Smaller funds have raised their allocation to sustainable assets from 10% to 22%, although they still lag larger funds, which on average allocate 62% of assets in line with ESG standards, Swisscanto’s research showed.
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