“Switzerland has all the necessary conditions to be a leader in sustainable finance”

Presented as a major lever of the climate transition, sustainable finance is going through a difficult period. The commitments announced by large financial institutions did not last long, weakened notably by counterproductive political and legal pressures. The setbacks and departures observed within the “Net-Zero Banking Alliance” (NZBA) illustrate this dismay.

Yet, in a context still marked by the climate emergency and energy challenges, how can sustainable finance be given a clear direction again — a second wind? And what role could Switzerland play in this reconstruction?

A few days before the opening of “Building Bridges”, the Geneva summit devoted to sustainable finance, we continue our series of interviews this time with Naomi Pfister, Naomi Pfister, sustainable finance advisor for the Swiss Bankers Association (SBA).

The growing troubles encountered by the NZBA appear to be a blatant retreat by the banking sector in the quest for truly sustainable finance. Ten years after the Paris agreements, how can this be explained?

Net Zero alliances and other sustainability initiatives have served as platforms for exchanges between financial institutions on the climate transition. However, it is not within these groups that the real work is done. In the climate field in particular, many advances have resulted in new regulations in recent years. We therefore see this evolution not as a failure, but as a normal stage of maturation.

According to the statistics published each year by Swiss Sustainable Finance (SSF), the volume of sustainable investments managed in Switzerland reached 1,881 billion francs at the end of 2024. Ten years earlier, it was 71.3 billion. That corresponds to growth of about 2,500%. The importance of sustainability in investments has therefore been considerably strengthened, and we consider it very unlikely that it could regress. On the contrary, we anticipate a continuation of this dynamic, which should move toward generalization.

Is the exodus of the major banks from the NZBA not primarily due to political issues rather than financial considerations?

It is true that the context has evolved since the creation of the NZBA, but the reasons for this withdrawal are not only political. Many Swiss banks had already set ambitious sustainable finance targets long before the existence of the NZBA, and they will continue to pursue them, whether they are members or not.

In the current context, can banks really defend the interests of their clients while defending the climate?

It should be recalled that our clients' interests are defined by themselves. We believe our main role is to inform and advise them on the benefits of taking into account the risks and opportunities related to climate change, the ecological transition and resilience. The two self-regulations developed by the SBA are directly aimed at this objective.

Isn’t the main problem today linked to the impression that sustainable finance — and even the word “sustainability” — have become catch-alls without real substance?

Sustainability is indeed a concept as abstract as that of freedom. If these concepts are necessary, to be effective they must be based on precise definitions such as those developed over the past thirty years. However, expectations regarding sustainable finance have ended up evolving over time and concepts dating from the “boom” of sustainable finance a few years earlier are now increasingly questioned.

In Switzerland, the self-regulations of the SBA and of Asset Management Association Switzerland (AMAS) have brought clarity by rigorously defining what does, or does not, fall under sustainable finance. With their principles-based approach, they offer both openness and the flexibility necessary to adapt to future developments.

True progress lies in sustainable finance no longer being considered a new and exciting field, but rather as an integral part of a bank’s usual processes.

Similar to ESG criteria, shouldn't the term sustainable finance be completely overhauled, in order to chart a new path and recover the momentum that occurred in Paris in 2015?

Sustainable finance has evolved considerably in recent years. Trying to promote it solely through regulation has, as the EU example shows, mainly generated confusion — especially among investors, who are not experts in the field. If a revision is needed, it is probably less of the concepts than of the real impact of sustainable finance. One can also ask whether it would not be more relevant to focus efforts on creating favorable conditions that allow the real economy to fully play its role.

What actions could be taken to change the current narrative around sustainable finance, now tainted by the decline of the NZBA?

In my eyes, true progress lies in sustainable finance no longer being considered a new and exciting field, distinct from “traditional” banking activities, but rather as an integral part of a bank’s usual processes. We have moved out of the euphoria of a few years ago into a phase of maturation and generalization. Several indicators point in this direction: the continued increase in green bond issuance and the growth of revenues related to “green” activities for companies around the world.

With events like “Building Bridges”, shouldn’t Switzerland do everything to ensure a leadership role in the field of sustainable finance?

Switzerland is already doing so. It enjoys an excellent reputation in the financial sector: its services are perceived as high quality, as confirmed by the SBA image survey on banks published in March 2024. It is also among the most competitive and innovative countries in the world, according to the World Economic Forum (WEF) and IMD. This combination gives it all the conditions necessary to further strengthen its position in sustainable finance.

Published in October 2024, the “Global Green Finance Index” (GGFI) — which assesses the availability of sustainable investment offerings in major financial centers — thus ranks Zurich (2nd), Geneva (4th) and Lugano (13th) among the top 20 global financial centers. And we are convinced that this momentum will continue.

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