“We must learn to do business within planetary boundaries”

Presented as a major lever for the climate transition, sustainable finance is going through a difficult period. The commitments announced by major 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 climate urgency and energy challenges, how can we give sustainable finance a clear direction — a second wind? And what role could Switzerland play in this reconstruction?

A few days before the opening of “Building Bridges”, the Geneva summit dedicated to sustainable finance, we are launching a new interview series with the ambition of providing some answers. And who better to kick off the series than WWF Switzerland, through the voice of its senior advisor in sustainable finance, Dominik Rothmund? Interview.

Overall, the impression is that, in large banks as well as in listed companies around the world, the climate issue is no longer a priority for shareholders. Do you share this observation?

While the climate and biodiversity crises remain urgent, and losses for companies as well as populations continue to worsen, we observe a growing reluctance among large asset managers — particularly American ones — to support climate-related resolutions.

In the United States, often motivated by the fear of lawsuits, the climate issue has faced strong headwinds in recent months, mainly within large financial institutions. The political shift, the ensuing anti-ESG debate, but also short-term economic pressures, geopolitical instability and regulatory uncertainty have contributed to a shift in priorities for American companies. A striking example: ISS — a proxy voting services provider — deciding not to support a climate proposal in the United States.

In Europe and Asia, the situation is different. This can be seen both at the level of individual shareholders and civil society and among engaged institutional investors. For many, sustainability remains a major priority. For example, the Dutch pension fund PFZW withdrew $14 billion from BlackRock, while the UK fund People’s Pension withdrew £28 billion from State Street.

Although the numbers are down in 2025, many investors continue to file and support climate resolutions, proof that demand remains very much alive.

WWF advocates for clear definitions, aligned with scientific targets, robust data and transparency ensuring that sustainability commitments are translated into concrete actions.

In the current context, is it really possible to invest sustainably?

Of course. Long-term value creation, the risk of stranded assets and transition risks all underscore the need for an investment strategy focused on the future and integrating sustainability at its core.

Many products and solutions already exist, and many companies continue to progress in their approach. According to SBTi data, the number of companies setting short-term science-based targets nearly doubled (+97%) in just 18 months, while those going further — adopting both short-term targets and net-zero targets — more than tripled (+227%) over the same period.

Promising developments can also be observed, such as the rise of nature-related financial reporting (TNFD), which helps investors better understand biodiversity risks and impacts. Finally, according to the GIIN, the impact investing market has grown continuously since 2019, with a compound annual growth rate of 21% (2019–2024), notably for funds targeting measurable environmental and social outcomes.

Isn't the main problem today related to the impression that sustainable finance — and even the word “sustainability” — have become catch-all terms without real substance?

Yes, the term “sustainability” has been diluted in recent years. This evolution should push us to reclaim and redefine it — not to abandon it. WWF advocates for clear definitions, aligned with scientific targets, robust data and transparency ensuring that sustainability commitments are translated into concrete actions.

Another challenge lies in the geopolitical context. Armed conflicts and the resulting energy crises have favored, in the short term, the outperformance of arms manufacturers as well as oil and gas companies. This feeds the illusion that non-sustainable investments would be more profitable. Yet, over the last decade, sustainability-related investments have outperformed “conventional” indices over the long term (see MSCI and SRF), and we expect this trend to continue.

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

A complete overhaul is not necessary, but a recalibration is. The Paris Agreement gave us a vision; we now need a financial system capable of delivering it. Governments must honor their commitments, companies design and implement credible transition plans, and the financial sector must encourage this dynamic by mobilizing the full range of sustainable finance tools — including active ownership.

Wouldn't it be time, for example, to lift the taboos around certain words like “degrowth” or “sobriety”?

Absolutely. If we want a future where humans and the planet live in harmony, we must learn to inhabit and do business within planetary boundaries. This inevitably implies transforming our economic system, which is currently based on the ever-increasing exploitation of finite resources.

Take a simple comparison: when money is scarce, most people start saving — and often they set a budget from the start. With nature, we don't do that. As a result, every year, Earth Overshoot Day comes earlier. We are therefore clearly living beyond our means.

It does not necessarily mean applying generalized degrowth to all activities, but rather ensuring that consumption remains within ecological limits. This requires stopping harmful activities while massively developing those that contribute to carbon neutrality and a nature-positive world.

We must also promote decoupling by inventing economic models that separate human well-being from environmentally destructive growth. Finally, it is urgent to encourage a change in behaviors to counter the prevailing short-termism and to remind that finance must support — not undermine — societal transformations toward sustainability.

Switzerland and its financial sector can — and must — assume a leadership role in the transition.

With events like “Building Bridges”, shouldn't Switzerland do everything to secure a leadership role in sustainable finance?

Switzerland has unique strengths: financial expertise, wealth, capacity for innovation and collaborative platforms like “Building Bridges”. It could become a champion of sustainable finance, steer portfolios aligned with the Paris Agreement and nature-positive, and encourage cross-sector collaboration to build a narrative based on science, equity and impact.

However, this leadership opportunity remains hampered by the political agenda and the limited ambition of many large Swiss financial institutions. While the United Kingdom sets an example with the “Transition Plan Taskforce”, the Swiss government has just suspended an ordinance intended to provide more guidance for transition plans.

Admittedly, the Federal Council published a report in 2022 explaining how the financial center could become a leader in sustainable finance, but companies have not lived up to the Paris or Kunming (Montreal) agreements. As for regulation, it often remains insufficient: too voluntary, too vague or not scientific enough to meet the climate and biodiversity objectives ratified by Switzerland.

To change this situation and strengthen Switzerland's position in sustainable finance, WWF advocates for the “Finanzplatz-Initiative”, which aims to require Swiss financial actors to also align their activities abroad with international climate and biodiversity objectives.

Switzerland and its financial sector can — and must — assume a leadership role in the transition. But this can only be achieved with measurable actions, not just declarations of intent.

This article has been automatically translated using AI. If you notice any errors, please don't hesitate to contact us.