Swiss government adds to climate disclosure guidelines for financial products

The Swiss government has decided to update guidelines for voluntary climate disclosures for financial products.

The aim of the ‘Swiss Climate Scores’, from the government’s perspective, is to strengthen the credibility and climate transparency of the Swiss financial centre. They were introduced in 2022, with the Federal Council having said it would regularly review them to adapt them to the latest developments as necessary.

Aimed primarily at offerings by asset managers, banks and insurance companies, the Climate Scores are supposed to provide the latter’s institutional and private clients with comparable and meaningful information on the extent to which financial investments are compatible with international climate goals.

Following the recent update, the Scores now also feature optional questions on climate-related investment objectives while those reporting against the guidelines will have to disclose the exposure to renewable energies alongside the exposure to fossil fuels.

Also, certain aspects of the Scores have been refined to facilitate their implementation by the industry and increase their comprehensibility for investors, the government said in a statement.

The new optional climate goal-focussed questions ask if the fund manager considers the portfolio in question to be aligned with the temperature-capping goals of the Paris Agreement and if investing in the portfolio contributes to the mitigation of climate change. In both cases the financial institution should set out the basis for the assessment.

Developed in close cooperation with the Swiss financial sector and non-profit organisations, the Climate Scores are said to draw heavily on existing international frameworks to avoid duplication, particularly the Glasgow Financial Alliance for Net Zero (GFANZ) and the Taskforce for Climate-related Financial Disclosures (TCFD).

The use of the Climate Scores is voluntary although they may find their way into anti-greenwashing regulation that the Swiss finance ministry is working on. The finance ministry’s international finance secretariat is due to examine the state of voluntary uptake of the Scores next year.

They are likely to be adopted by the majority of Swiss financial institutions. Last month UBS published the first Climate Scores for 60 of its Switzerland-domiciled equity and bond funds.

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