Almost 60% of the 30 Swiss pension funds surveyed by the department of banking, finance and insurance at the Zurich University of Applied Sciences ZHAW – covering combined assets of over CHF300bn (€280bn) – have put forward “clearly formulated” climate strategies, despite their short track records.
Around 20% of the large pension institutions in Switzerland rely on sustainability performance figures of five years or less, the study shows.
Activities with regards to sustainable investments will, however, continue to accelerate, it added.
In the last 18 months, nine pension funds adopted a climate strategy, including the Aargauische Pensionskasse (APK), ASGA, the Pension fund of Swiss canton of Bern (BPK), Caisse Intercommunale de Pensions (CIP), the pension fund for the canton of Vaud (CPEV), and the pension fund of the canton of Lucerne (LUPK).
LUPK is expanding its sustainability strategy to include direct real estate investments. The CO2 emissions of Swiss buildings currently amount to over a quarter of the total emissions in the country, with an average share of real estate allocations in the Pensionskassen’s portfolios of over 20%.
Almost all of the pension funds surveyed have laid out the basis to integrate sustainability policies in their investment rules, emphasising that ESG criteria must be taken into account when making investment decisions.
But the rules on sustainable investments vary widely from non-binding references to the integration of ESG principles to specific goals, particularly with regards to commitments and CO2 emission targets, it said.
According to the analysis, pension funds tend to focus primarily on engagement rather than on exclusion with Swiss companies, it said.
The study pointed out that two-thirds of the companies on the exclusion list of the Swiss Association for Responsible Investments SVVK-ASIR deal exclusively with cluster munitions, while fossil fuels play a minor role as an exclusion criterion.
The role of Swiss pension funds in addressing climate and sustainability issues is increasing: 60% of the pension institutions surveyed define themselves as a “supporter” of Climate Action 100+, while 40% are members of the Ethos Engagement Pool. Additionally, one third of schemes are also members of SVVK-ASIR, and another 20% of the Swiss Sustainable Finance initiative.
Swiss pension funds are making further steps on transparency, with Pensionskasse for the Swiss canton of Zurich (BVK), Migros Pensionskasse, PKBS, the pension fund for the Swiss retail and wholesale company Coop-Gruppe, CPV/CAP and Publica, providing detailed information on the progress made with regards to climate change and future plans.