Swiss pension funds association updates ESG reporting standards

Swiss pension funds association ASIP has reworked its ESG standards following calls from pension schemes for better standards and a focus on key quality data.

The association has updated the standards to strengthen qualitative reporting, especially for stewardship, and to improve transparency on asset classes covered by disclosures through quantitative key data, it said.

Pension funds following the new standards, intended as recommendations, will disclose how climate topics are taken into account in engagement and voting rights policies.

“What matters is the quality of engagement, not the quantity,” ASIP said. The association will provide its members with an engagement-reporting template to improve the quality of reporting.

It recommends pension funds use the Swiss Climate Scores to calculate their exposure to fossil fuels in portfolios, and the share of assets bound for net zero with verified credible interim targets, it added.

The calculation of emissions for government bonds should be based on the current version of the Financed Emissions Standards drafted by the Partnership for Carbon Accounting Financials (PCAF), it said.

ASIP’s ESG standards only require pension funds to disclose how they deal with emissions from derivatives, as the calculation of CO₂ emissions from the assets underlying the derivatives is still controversial.

Schemes are asked to report quantitative key figures for equities, corporate bonds, convertible bonds, real estate and government bond investments, but not alternatives, although for those asset classes, key figures can be disclosed if available, according to the standards.

Pension funds will disclose their share of total assets for which ESG key figures and the share of asset classes, products or mandates for which key figures are available, based on market capitalisation, it added.

It is crucial that pension funds receive relevant information from asset managers, custodian banks and investment foundations to implement the ESG standards, ASIP said, adding that “there is still need to take action”.

ASIP has drafted the updated version of its reporting standards with the Swiss Association for Responsible Investments (SVVK ASIR), Swiss Asset Management Association (AMAS), CFA Society, PwC and KGAST, the association representing investment foundations.

The new standards apply from 1 January 2025.

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