Climate stress test for the Swiss financial centre

Klimaallianz Schweiz
Press release
The Swiss National Bank’s investments contribute to a catastrophic temperature rise of 4-6 degrees. On the occasion of the General Assembly on 27 April, the Climate Alliance calls for a climate stress test and publishes concrete recommendations.

Press release by the Swiss Climate Alliance ot the 23rd April 2018

The Swiss National Bank’s investments contribute to a catastrophic temperature rise of 4-6 degrees. This is in contradiction to the bank's own investment guidelines, which exclude investments in companies that systematically cause serious environmental damage. On the occasion of the General Assembly on 27 April, the Climate Alliance calls for a climate stress test and publishes concrete recommendations on how the stability of the financial system and the climate could be protected.

The National Bank's equity investments are responsible for more than the annual CO2 emissions of the whole of Switzerland and contribute to a temperature rise of 4 to 6 degrees. Greenhouse gas emissions come mainly from coal, oil and gas companies. The National Bank uses its money to finance exploration, development and production of new fossil fuel reserves. This is also confirmed by a new study by Artisans de la Transition in collaboration with Fossil-Free, which will be published on Tuesday 24 April.

The National Bank is still avoiding the issue of climate risk, even though Switzerland ratified the Paris climate agreement last year. In addition to reducing greenhouse gas emissions and strengthening adaptation to climate change, the agreement establishes the redirection of financial flows as an equivalent pillar, so that the goal of a warming of well below 2 degrees can be met.

"The Swiss National Bank must subject the Swiss financial centre to a climate stress test," explains Christian Lüthi, Managing Director of Climate Alliance Switzerland. "The later the SNB takes effective measures, the more sudden there may be a crisis in the Swiss financial system."

Climate Alliance, an association of 73 organisations in the fields of environmental, development and social policy, has published specific recommendations (see Annex) on how the SNB can protect the stability of the Swiss financial system and the climate.

"The Paris climate agreement cannot be implemented without the decarbonisation of the National Bank," says Christian Lüthi. The European Central Bank and eight central banks and supervisory authorities in England, France, Germany, the Netherlands, Sweden, China, Singapore and Mexico have already declared their leading role in climate protection.

 

For further inquiries

  • Christian Lüthi, Head of Climate Alliance Switzerland, +41 76 580 44 99
  • Sandro Leuenberger, Project Manager, Climate Alliance, +41 79 941 30 19
     

Experts who were involved in the preparation of the "Recommendations on Climate Risks":

  • Prof. Sergio Rossi, Chaire de macroéconomie et d'économie monétaire, University of Fribourg, Tel. 079 293 94 06
  • Prof. Marc Chesney, Head of Dept of Banking and Finance, University of Zurich, Tel. 044 634 45 80 / 634 41 07 (Secretary)
  • Prof. Philippe Thalmann, Chair of Environmental Economics, Sustainable Development and Climate Change, EPFL Swiss Federal Institute of Technology Lausanne, Tel. 021 693 73 21
  • Prof. Stefano Battiston, Chair of Dynamics of Financial Systems, founder of FINEXUS Center for Financial Networks and Sustainability, Dept of Banking and Finance, University of Zurich, 044 634 40 58
  • Prof. Anthony Patt, Environmental Systems Sciences, Climate Protection and Adaptation, ETH Zurich, Tel. 044 632 58 21

 

Recommendations on climate risk to the Swiss National Bank

With the following recommendations, the Climate Alliance shows how the SNB can invest in the existing mandate in a climate-friendly manner and fulfil its task of preserving financial stability by taking climate risks into account:

  1. In a public statement, the SNB acknowledges the Paris climate agreement and the UN Sustainable Development Goals and announces the first steps.
  2. As a precautionary measure, the SNB develops principles that enable climate risks to be controlled while maintaining the stability of the financial system.
  3. SNB begins by conducting climate stress tests and scenario analyses for the Swiss financial sector – insurance companies, banks, pension funds – and publishes measures to contain macro risks.
  4. SNB evaluates the exposure of its own investments to climate risks.
  5. SNB extends the investment guidelines to exclude investments in companies that systematically cause serious climate damage.
  6. SNB determines and publishes the 2°C compatibility and CO2 emissions of its securities portfolios.
  7. SNB reveals the measures it intends to take to achieve the 2°C compatibility path in good time and reduce CO2 emissions, and how it will measure their success.
  8. SNB starts by divesting from the coal companies and all the companies with the largest fossil fuel reserves of the Carbon Underground 200 list.
  9. For the other sectors exposed to climate risks (e.g. electricity producers, suppliers to fossil fuel companies or car manufacturers), SNB also takes a "best in class" approach. SNB supports those companies that are determined to implement the energy transition (e.g. by switching to renewable energies).

 

Background information: Climate risks of the National Bank

A study published in December 2016 by Artisans de la Transition and fossil-free.ch shows that the National Bank's equity investments produce similarly high annual CO2 emissions as the whole of Switzerland. It contributes to a climate warming scenario of 4 to 6 degrees Celsius and runs against the 2015 Paris Convention, ratified by Switzerland, which aims to limit warming to below 2 degrees Celsius. This finding is confirmed by a new study by Artisans de la Transition and fossil-free.ch, which will be published on Tuesday, April 24.

In April 2017, 135 personalities from the natural and environmental sciences, economics, law and finance, ethics and sustainability, religious communities, development, environmental organizations and politics called on the Swiss National Bank (SNB) to withdraw from investments in coal, oil and natural gas.

 

In a parliamentary initiative submitted in June 2017 to amend the National Bank Act, National Councillor Adèle Thorens proposes that sustainable development and the sustainable conservation of natural resources be clearly included in the mandate to support the federal government's general economic policy. 

 

Action on the AGM of SNB of 27 April

On the occasion of the Annual General Meeting of the Swiss National Bank on 27 April in Berne, a street campaign will be held by fossil-free.ch and the Grands-parents pour le climat, members of Climate Alliance Switzerland.

Date and Time: Friday, April 27th, 09.45 a.m.
Location: Entrance Kursaal Bern, Kornhausstrasse 3, 3013 Bern

                                                                              

About Climate Alliance Switzerland

Climate Alliance Switzerland comprises 73 organisations from the fields of environmental, development and social policy as well as politics and churches. Together they stand for a fair, sustainable climate policy in Switzerland.

www.climate-alliance.ch

A Rocha Switzerland
ACG – Geneva Climate Association
ACSI – Consumers' association in Italian-speaking Switzerland
Actares – Shareholders with responsibility
aefu – Medical doctors for environmental protection
Alliance Sud
Alpine Initiative
Alternatiba Léman
Artisans de la Transition
Biomasse Suisse
BirdLife Switzerland
Bread for all
Bruno Manser Fund
Campax
CCJS Coordination Climat Justice Sociale
CIPRA
Comundo
Eaternity
Evangelical Women Switzerland
Fastenopfer (Swiss Catholic Lenten Fund)
Fondation Antenna Technologies
Fossilfree
Generation Klima Schweiz
GIBB Gesundes Haus / Gibbeco
Green Liberal Party (GLP)
Grands-Parents pour le Climat
Greenbuzz
Greenpeace
Green Party
Grüner Fisch
Hausverein
HEKS / EPER Swiss Church Aid
Helvetas
Incomindios
Integrale Politik
INWO
Young Greens
KlimaSeniorinnen
Mountain Wilderness
myblueplanet
myclimate
Naturfreunde Schweiz NFS
Noé21
Oeku Church and Environment
PanEco
Partner Sein
Pro Natura
Pro Velo
Protect Our Winters
Public Eye
SES – Energy Foundation
SEV – Transport Workers' Union
SGB – Swiss Federation of Trade Unions
SKF – Swiss Catholic Women’s League
SKS – Consumer Protection Foundation
Small Farmers’ Association
SolarSpar
Solidar Suisse
Social Democratic Party of Switzerland
SSES – Swiss Solar Energy Society
SSF Schweiz. Schutzverband gegen Flugemissionen
Swiss Eco Centre Langenbruck
Swiss Quakers
Swissaid
Swissolar
SYFC – Swiss Youth for Climate
Terre des hommes
Thinkpact Zukunft
umverkehR
vbu Vereinigung Bündner Umweltorganisationen
VCS – Swiss Association for Transport and Environment
WWF
Zukunft statt Kohle