Sustainability in the Finance Sector – A Status Quo Analysis for the Swiss MarketMailin Bues

17 September 2018

Sustainable finance has received increasing interest in recent years. Various initiatives in the private sector, on a regulatory level as well as in academia have emerged all over the world to create more sustainable financial markets that are able to withstand future challenges and benefit from arising opportunities. Sustainable investments (SI) provide an approach to integrate environmental, social, and governance (ESG) factors into the selection and management of investments. To catalyze further growth of the SI market, this market study aims to generate a deeper understanding of the application of SI by financial market participants. More specifically, it intends to shed light on the SI trends and dynamics that exist in the Swiss finance sector. In collaboration with the association Swiss Sustainable Finance (SSF), a large-scale standardized survey among asset managers and asset owners of the SSF membership network, was employed to capture their SI activities. Data analysis demonstrates that the Swiss market for SI has continued to grow significantly from 2016 to 2017. For example, the total volume of core SI has increased by 82%, accounting for CHF 390.6 billion at the end of 2017.
Furthermore, this market study identified existing challenges and possible opportunities regarding the further growth of the SI market. For example, market participants rated concerns regarding financial performance as a prominent barrier and investors’ demands as an important driver for this development. Altogether, the findings of this market study create a favorable picture of the status quo of SI in Switzerland and allow to assume a steep upward trend of sustainable finance in the coming years. However, they also call for further action by the finance sector as well as academia to address identified barriers and to support a positive trend in the future.