In 2017, recognizing the importance of the financial sector in the transition to a low carbon economy, the Swiss Federal Office for the Environment (FOEN) and the State Secretariat for International Financial Matters (SIF) initiated a voluntary assessment of the alignment of Swiss pension funds and insurance portfolios with the below 2-degrees climate goal.

79 pension funds and insurance companies, representing about two thirds of the total market as measured by assets under management, used the PACTA methodology to test their portfolios for climate compatibility. The volume of the assets under examination and the participation of various sizes of pension funds and insurance companies made a representative analysis possible.

The results showed that investments currently support global warming of 4 to 6 C. There are, however, great differences between individual insurance companies and pension funds. Some are already making climate friendly investments, while others favour particular sectors or classes of investment. However, in other sectors, such as the expansion of renewable energies, the average investor tends to lag behind the world market. The tests may contribute to a further rethinking within the Swiss financial sector.

Funder information: This report has received funding from the European Union’s Life programme under LIFE Action grant No. GIC/FR/00061 PACTA. This report reflects only the author’s view and the Agency and the Commission are not responsible for any use that may be made of the information it contains.