Swiss Financial Sector Takes Action on Greenwashing
On June 19, 2024, the Swiss Federal Council acknowledged the financial industry's new self-regulatory measures to address greenwashing.
This move aligns with the Council's December 2022 position on preventing misleading claims about sustainability in financial products.
Previously, the Council considered government regulations but opted to give the industry a chance to self-regulate. The Federal Department of Finance (FDF) consulted stakeholders and reviewed proposals from industry associations.
Industry Self-Regulation Takes Shape
The Swiss Bankers Association, Asset Management Association Switzerland, and Swiss Insurance Association have developed new self-regulatory provisions. These will be published soon and implemented with a grace period extending to January 1, 2027.
The provisions focus on defining sustainable investment goals, outlining sustainability approaches, ensuring accountability, and requiring independent audits. However, some aspects remain unclear, including compliance with EU law and the reference framework for sustainability targets and enforcement.
Monitoring Developments and Potential Future Action
Considering this progress, the ongoing revision of the EU's Sustainable Finance Disclosure Regulation (SFDR) and the importance of the European market, the Swiss government is holding off on state regulations for now.
The Federal Council has instructed the FDF to reassess the need for further action by the end of 2027, taking into account the final EU SFDR amendments and ensuring full implementation of the Council's greenwashing prevention position.
Source: Federal Council
