Regulate or not regulate sustainable finance in Switzerland? 

Amidst social unrest, biodiversity loss, and climate change, regulators worldwide are strengthening sustainable finance regulations by:

1. Increasing transparency of sustainability characteristics of financial products and the companies who issue them, complemented by due diligence;

2. Suggesting classifications for determining the degree of sustainability of economic activities and financial products;

3. Introducing requirements to align the sustainability preferences of end investors with their portfolios.

In Switzerland, sustainability regulation for financial actors is so far mostly market based. The Swiss legislator has announced stricter regulation around greenwashing, while leaving Swiss financial institutions to self-regulate in a coordinated way via industry associations. Many Swiss financial market actors anyways need to report under the complex European Sustainable Finance Disclosure Regulation (SFDR) in the EU. In that context, industry associations have issued guidance to mainstream best practices and increase transparency.

Still, many doubts remain, especially on harmonized data management, and in particular for smaller actors. Through formal interviews, this study gathers opinions of Swiss financial market actors on recent regulatory developments. Last year, the Enterprise for Society (E4S) Center published a series of white papers on how to improve Swiss Sustainable Finance Regulation. With this study, we add a practical angle, showcasing diverse financial market sentiments collected via formal interviews with financial market actors. The aim is to shed light on the ongoing self-regulatory developments in Switzerland, focusing on greenwashing prevention and transition financing.