The Asset Management Association Switzerland (AMAS) plans to establish a self-regulatory framework on sustainable investment products and greenwashing.
“The association is in the middle of discussions […] and it plans a self-regulation in 2022,” AMAS’s chief executive officer Adrian Schatzmann told IPE.
The framework would also build on recently published recommendations for sustainable investment products.
The recommendations published earlier this month by AMAS along with Swiss Sustainable Finance (SSF) offer guidance to asset managers to guarantee transparency on sustainable investment products to ultimately tackle greenwashing.
“The recommendations are not binding. Only in a second step could the recommendations become obligations,” Schatzmann said.
The three main goals of the recommendations are:
- define different sustainable investment approaches in detail and set minimum criteria for their implementation;
- specify minimum requirements to give investors information on different investment approaches; and
- identify the sustainable investment approaches that satisfy important sustainable goals for investors, meaning financial performance, value alignment and positive changes.
“Not all the strategies are equally well suited to reach a certain sustainable investment goal. With exclusion for example you can hardly achieve direct positive change but primarily value alignment,” the CEO said.
The guidelines also help create a convergence in the Swiss asset management industry around terminology and definitions.
AMAS has designed the recommendations together with asset managers in Switzerland. Blackrock, UBS, Credit Suisse, Lombard Odier and other asset managers were involved in the discussions to design the recommendations, IPE understands.
According to Schatzmann, the acceptance of the recommendations in the asset management industry is very high. “The timing is right because the issue of greenwashing is present,” he said, adding that the asset management industry needs to act against it.
Following the government’s lead
In November, the Swiss Federal Council decided on transparency measures to avoid greenwashing and to pursue agreements with financial market players at industry level.
Transparency on the negative or positive effects of investments on climate leads investors to making informed decisions, it added.
AMAS “fully supports” the topic of climate transparency addressed by the government, Schatzmann said.
The government has also touched on the commitment of the asset management industry to a net-zero goal.
“This is an important commitment for our members and the industry, but as a trade body we cannot enforce it. Nevertheless, we will, among other things, encourage our members to join the Net Zero Asset Manager Initiative,” the CEO added.
The third topic addressed by the government relates to the necessary actions to take to prevent and combat greenwashing, and “this is where self-regulation comes into play;” he said.
The Swiss asset manager industry is also active also in the EU, meaning that practically all asset managers in Switzerland have to comply with the SFDR and the EU Taxonomy.
There is some scepticism in the industry towards the EU Taxonomy, in particular with a view to the rather binary nature of it, Schatzmann said pointing at the split between good and bad industries, and adding that instead “we should concentrate on the transition to a carbon-free environment. That is where most impact can be generated.”