Half of Switzerland’s largest retail banks are demonstrating “good practice” in integrating environmental objectives into their businesses. However none can be described as “visionaries” or “pioneers”, a new survey by WWF Switzerland has found.
The study, carried out every four years, shows that the Swiss banking sector has made progress since 2017, when just three banks – Bern Cantonal Bank, Raiffeisen Group and Zurich Cantonal Bank – were found to be setting a good example when it came to working sustainably with their clients’ money.
This year, those showing good practice also include Credit Suisse, UBS, Basel Cantonal Bank and Basellandschaftliche Kantonalbank (BKLB). However, no Swiss bank was considered “visionary” or “pioneering”, WWF’s top two classifications.
To be considered “visionary” banks need to be publishing how they plan to reach net zero goals across all business areas.
“In different ways, all banks are actively involved in climate, environmental or social initiatives. Nevertheless, it is rare that they have already taken concrete measures to align, using scientific methods, the environmental impact of their core business with the climate objectives of the Paris Agreement,” WWF said in a statement.
Another six banks were ranked “average” while two cantonal banks – Aargau and Lucerne – were listed as laggards among their peers.
What the findings show. WWF collaborated on the survey with PwC Switzerland to analyse how sustainable retail banks’ practices were across savings, investment, provident funds, loans and financing, as well as corporate governance. Here are some of the main verdicts:
Transparency on the sustainability of products is still lacking. While transparency has improved since the last survey, the information available is still far from sufficient for bank customers to make sustainable investment decisions, WWF and PwC said.
Sustainability too often limited to corporate management. Most of the banks in the survey focus mainly on topics directly related to ecology within the company itself but when it comes to their investment and financing activities, these criteria are not sufficiently taken into account. “Only a few of the banks examined already include all of their investment and credit products in these considerations,” the authors said.
Biggest backlog in the area of loans and financing. Loan solutions that specifically promote and finance sustainable projects are still a rarity. WWF says this area shows the greatest potential for expanding sustainable product solutions and framework conditions.
Across savings accounts, sustainable solutions are still scarce. Only two banks identify products such as savings accounts as a potential lever for promoting sustainable development. Most banks were rated "below average" because they do not have any sustainability-related guidelines for savings accounts, WWF and PwC said.
On the positive side, banks are offering more investment and pension products with sustainable options than before. However, the study said there is still a lack of binding minimum standards in the financial markets for declaring sustainable (and non-sustainable) products.
There is also an absence of a standard definition; sustainable products are interpreted differently from one bank to another – something that new rules introduced by the European Union that set out a new ESG taxonomy should help address. For the time being, this makes it difficult for customers to compare products with complete transparency, the authors said.
Andreas Staubli, managing director of PwC Switzerland, said:
“As the results of our joint study show, the great potential of financial institutes lies in a more marked effort to differentiate using criteria linked to sustainable development and by a more effective contribution to international agreements such as that of Paris and in favour of a transition to a sustainable economy. ”
Thomas Vellacott, director general of WWF Switzerland, said: “"We expect a retail bank to strike a fair balance between environmental, social and economic interests over the long term."