Switzerland has issued its first green bond raising CHF766m (€791m) in total, with an interest rate of 1.50%, and a maturity up to 26 October 2038, it was announced this week. The issuance also attached total bids from investors of CHF974.05m.
The Federal Council decided last November to issue green bonds to strengthen Switzerland’s commitment to sustainability and to turn the country’s financial centre into a leading global provider of sustainable financial services, the Federal Department of Finance said, explaining the framework for green bonds issuance.
The Swiss green bond framework is aligned with the Green Bond Principles set by the International Capital Market Association (ICMA).
The proceeds from the bond issuance will finance projects in the fields of clean transportation, agriculture, forestry, natural landscapes and biodiversity, green buildings and energy efficiency, renewable energy, international cooperation, and research and innovation, according to the green bond investor presentation of the Swiss confederation.
The indicative amount of eligible green expenditure amounts to close to CHF4.5bn, based on financial statements for 2021, it added.
Switzerland has decided to join other European countries in the issuance of green bonds to further expand its investor base, meeting the increasing demand from investors for green investments on the capital market, it said in the presentation.
According to the Federal Department of Finance, the issuance of green bonds also intends to promote the application of international standards for green bonds in Switzerland, offering investors further avenues to invest sustainably and encourage the issuance of green bonds by private and public players.
In November, the government will decide on measures aimed at improving transparency on sustainability in financial markets, including potentially requesting larger Swiss companies in all sectors to implement the recommendations of the Task Force on Climate-Related Financial Disclosure (TCFD), it added.
The Federal Council recommends companies apply the Swiss Climate Scores, a series of current and forward-looking indicators to improve transparency with regard to financial products and their impact on climate.
Climate scores can provide investors with scientifically-based guidance as to whether their investments are in line with the goals of the Paris Agreement, highlighting greenhouse gas emissions and net zero.
Switzerland has designed a climate strategy for the long term to reach net-zero emissions in 2050, has adopted a biodiversity strategy with 10 strategic objectives, and has put in place an action plan to preserve biodiversity, ecosystems and genetic diversity.
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