Swiss pension funds to participate in sustainability modelling programme
Written by Mark Evans
Swiss pension funds and insurance companies are being given an opportunity to participate in a modelling programme to gauge their alignment to the sustainability target of keeping climate temperature changes below 2 degrees, as outlined in the Paris Agreement.
The model has already been tested with over 100 institutional investors globally, and in cooperation with two European central banks. The voluntary, free and confidential analysis of equity and bond portfolios will be conducted with only anonymous information published.
In an open letter, the Federal Office for the Environment (FOEN) have requested that funds use the model, pointing out that investment decisions can have a significant impact on future greenhouse gas emissions. Between mid-April and mid-July 2017, in cooperation with the independent, non-profit think tank 2° Investing Initiative, FOEN and the State Secretariat for International Financial Matters (SIF) will offer all insurance companies and pension funds in Switzerland a compatibility test.
Swiss occupational pensions trade body ASIP has replied in another open letter, declaring that it believes there is no need for legal requirements or requirements to what extent pension funds must take sustainability criteria into account when investing, and that such decision should rest with the board of trustees. However, it fully supports the testing programme, and has encouraged schemes to participate.