Sustainable investment is a key driver for Swiss asset owners
The value of sustainable investments held by Swiss asset owners almost doubled in the past year, according to a survey by Forum Nachhaltige Geldanlagen (FNG), the association for sustainable investments in Germany, Switzerland, and Austria, which reported that sustainable investments grew to CHF104bn (€95.8bn) as of year-end 2016, compared to CHF55bn a year earlier.
A total of 41 Swiss players took part in the 2017 edition; these included 27 asset managers and 14 asset owners.
The increase was in part due to Swiss asset owners being more willing to open up about their sustainable investment strategies: the number of asset owners taking part in the annual survey of the Swiss sustainability investment market rose from four to 14.
FNG has been looking into sustainable investments in the region since 2005. However, it was only last year that Swiss asset owners began to take part in the survey.
The increased sustainable investment activity mainly fed into increased inflows to sustainable investment funds (+59%), while the assets in directly awarded mandates gained 2%.
Many pension funds only started to use sustainability strategies last year, while others have only just started talking about doing so.
Overall, the FNG survey found most asset owners were using exclusion criteria, norm-based screenings, and engagement in their sustainability strategies.
One of the main drivers of the increased activity in sustainable investments was the establishment of the SVVK-ASIR platform in 2015 by seven major Swiss asset owners, many of which chose to join the FNG survey this year for the first time. Founding member Suva, the accident insurance fund, was the only one of the seven to already take part in 2016.
The FNG report also gave an update on the SVVK-ASIR platform, confirming there was “a lot of interest” from pension funds wanting to join.
The platform’s role includes developing strategies for its members, discussing exclusion lists, and helping with engagement.
Asset owner respondents to the survey included heavyweights such as the public pension fund Publica, Pensionskasse Post, BVK, and the pension fund for the city of Zurich.
According to researchers, Swiss players have also seen the introduction of a number of changes in the past year. Different factors contributed to raising the profile of the issue among authorities and market players. The research cited the roadmap published by the Swiss Federal Office for the Environment, issued a new financial market policy isseud by Federal Council and the Swiss Association for Responsible Investments (SVVK), an association of major pension funds from the public sphere, which set up to implement sustainable investment strategies.
34 study participants reported what they see as being the key drivers, and 33 ventured predictions regarding the further development of sustainable investments in 2017. The core key driver of further growth in the sustainable investment market in 2016 was "demand from institutional investors", once again coming in first place, the report cited.