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Sustainable finance

The Federal Council’s approach

Since about 2020 the Federal Council has declared sustainable finance a strategic priority for the Swiss financial centre. It has pursued this aim mainly through transparency, voluntary standards and cooperation with the industry, leaving prescriptive product rules aside. The State Secretariat for International Finance coordinates an action plan for 2022 to 2025 with fifteen measures intended to consolidate Switzerland’s position as a leading location for sustainable finance. In March 2026 the SIF reaffirmed the commitment in a policy paper that emphasised sustainability as a factor of competitiveness. The ordinance on climate reporting, in force since 1 January 2024, obliges large public-interest companies, banks and insurers to report on climate matters, with the first reports covering the financial year 2024. In June 2025 the Federal Council decided to pause a revision of that ordinance and asked for pragmatic variants in light of developments in the European Union.1

The Swiss Climate Scores are a characteristic instrument of this approach. The Federal Council introduced them on 29 June 2022 as a voluntary best-practice standard for transparency on the alignment of financial investments with the climate goals of the Paris Agreement. On 8 December 2023 it decided to develop them further in order to enhance their credibility and international competitiveness.2 The scores cover indicators such as greenhouse gas emissions, exposure to fossil fuels, net zero commitments and verified transition targets. Many Zurich asset managers publish them for their funds and mandates.3 The scores give Swiss investors a common language for climate transparency without imposing product labels.

FINMA and the prevention of greenwashing

FINMA addressed greenwashing in its Guidance 05/2021 of 3 November 2021. The guidance set out expectations in three areas. At the level of the product, FINMA announced that it would check whether Swiss collective investment schemes described as sustainable actually possess those characteristics and whether they disclose them adequately. At the level of the institution, managers of sustainable schemes must have adequate processes, expertise, strategies and tools. At the point of sale, FINMA addressed the risk of misleading advice on sustainable products.4 Because Swiss financial market law contains no specific rules on sustainability, FINMA’s instruments are limited to the general principles of transparency, proper organisation and protection against deception. In October 2022 FINMA’s then chief executive Urban Angehrn stated that a legal framework applicable across all sectors and enforceable through supervision was necessary.5

The Federal Council’s position and the turn to self-regulation

On 16 December 2022 the Federal Council adopted a position on the prevention of greenwashing. It held that financial products and services could be described as sustainable only if they pursued at least one specific sustainability objective beside their financial objectives, or contributed to the achievement of such an objective. The government reserved the option of state rules if self-regulation by the industry proved insufficient.6

The industry responded. AMAS adopted a self-regulation on transparency and disclosure for sustainability-related collective assets, the Swiss Bankers Association revised its guidelines on the integration of ESG preferences and risks and on the prevention of greenwashing in investment advice and portfolio management, and the Swiss Insurance Association adopted minimum standards for sustainability-related unit-linked life insurance. The AMAS and SBA rules entered into force on 1 September 2024, with transitional periods, while the insurance rules followed on 1 January 2025.7 On 19 June 2024 the Federal Council decided to refrain from state regulation for the time being. It acknowledged that the self-regulation met several of its objectives, including the definition of sustainability goals and review by third parties. It noted open questions concerning compatibility with European law and the reference frameworks for sustainability goals. The transitional period of the self-regulation runs until 1 January 2027. The Federal Council announced that it would monitor the regulatory path of the European Union and reassess the need for state rules, at the latest by the end of 2027.8

As of September 2026 the self-regulatory model remains in place. The European Commission’s revision of the Sustainable Finance Disclosure Regulation, which the Federal Council named as the trigger for a reassessment, is still in the legislative process.9 The transition period of the Swiss self-regulation ends on 1 January 2027. For Zurich asset managers the practical result is a dual regime. Swiss funds and mandates follow the AMAS and SBA rules, while funds domiciled in Luxembourg or Ireland are subject to the European disclosure regulation. The houses that manage both ranges from Zurich must therefore run two sets of classifications, documentation and controls. Critics among environmental organisations have argued that the self-regulation does not prevent greenwashing effectively.10 The debate is therefore likely to return when the Federal Council reassesses the matter.

Notes

  1. State Secretariat for International Finance (SIF), “Sustainable Finance”, on the action plan 2022–2025 with fifteen measures, the policy paper of March 2026, the climate reporting ordinance in force since 1 January 2024, the Federal Council’s position on greenwashing of 16 December 2022, its decision of 19 June 2024 and its decision of 25 June 2025 to pause the revision of the climate disclosure ordinance, https://www.sif.admin.ch/en/sustainable-finance. ↩
  2. State Secretariat for International Finance (SIF), “Swiss Climate Scores”, on the introduction by the Federal Council on 29 June 2022, the voluntary character of the scores, their purpose of creating best-practice transparency on the Paris alignment of financial investments and the decision of 8 December 2023 to develop them further, https://www.sif.admin.ch/en/swiss-climate-scores-en. ↩
  3. Federal Council, Swiss Climate Scores (8 December 2023), https://www.sif.admin.ch/dam/de/sd-web/9ZbBGJazuI-g/SCS%20DE.pdf, listing the indicators greenhouse gas emissions, exposure to fossil fuels and renewable energy, global warming potential, verified commitments to net zero, credible climate dialogue and management to net zero. ↩
  4. Hansjürg Appenzeller and Benjamin Leisinger (Homburger), “FINMA on Green Financial Centre and Greenwashing”, on FINMA Guidance 05/2021 of 3 November 2021 and its three areas of fund documentation, organisational requirements for institutions managing sustainable schemes and conduct at the point of sale, https://homburger.ch/en/insights/finma-on-green-financial-centre-and-greenwashing. ↩
  5. Tippinpoint, “Greenwashing in der Finanzbranche: Jetzt wird der Bundesrat aktiv” (7 October 2022), on the statement of FINMA chief executive Urban Angehrn that the Federal Council would decide on the need for regulation by the end of 2022 and on FINMA’s view that industry self-regulation, although welcome, did not replace a cross-sectoral legal framework enforceable through supervision, https://www.tippinpoint.ch/greenwashing-in-der-finanzbranche-jetzt-wird-der-bundesrat-aktiv/. ↩
  6. State Secretariat for International Finance (SIF), “Sustainable Finance”, on the Federal Council’s position of 16 December 2022 that a clear and common understanding of when a financial product or service may be labelled sustainable was needed, and on the decision of 19 June 2024 to examine further state provisions in the light of developments in the European Union, https://www.sif.admin.ch/en/sustainable-finance. IPE, “Switzerland holds back on state greenwashing regulation”, reports that the Finance Ministry was instructed to reassess full implementation of the position once the European Union amends the SFDR, and by the end of 2027 at the latest, https://www.ipe.com/news/switzerland-holds-back-on-state-greenwashing-regulation/10074097.article. ↩
  7. Swiss Bankers Association, “AMAS, SBA and SIA welcome the Federal Council’s decision in favour of self-regulation to prevent greenwashing” (19 June 2024), on the content of the AMAS self-regulation on transparency and disclosure for sustainability-related collective assets, the SBA guidelines on ESG preferences, ESG risks and greenwashing, the SIA self-regulation on unit-linked products, and their entry into force on 1 September 2024 and 1 January 2025 respectively, https://www.swissbanking.ch/en/media-politics/press-releases/amas-sba-and-sia-welcome-the-federal-councils-decision-in-favour-of-self-regulation-to-prevent-greenwashing. ↩
  8. finews.ch, “Greenwashing: Bundesrat schaut bei Regulierung in Richtung EU” (19 June 2024), on the decision to forgo state regulation for the time being, the transitional period until 1 January 2027, the objectives achieved and the open questions, and the intention to observe developments in the European Union and reassess the approach by the end of 2027, https://www.finews.ch/news/finanzplatz/63129-bundesrat-regulierung-esg-greenwashing. See also IPE, “Switzerland holds back on state greenwashing regulation”, https://www.ipe.com/news/switzerland-holds-back-on-state-greenwashing-regulation/10074097.article. ↩
  9. Debevoise & Plimpton, “SFDR 2.0: Recap Briefing”, 14 September 2026, on the Commission proposal of November 2025, the Council position of June 2026, the pending plenary vote of the European Parliament and trilogues expected to run into late 2026 or early 2027, https://www.debevoise.com/insights/publications/2026/09/sfdr-20-recap-briefing. ↩
  10. WWF Schweiz, “Neue Selbstregulierungen verhindern Greenwashing im Finanzmarkt nicht”, 19 June 2024, https://www.wwf.ch/de/medien/neue-selbstregulierungen-verhindern-greenwashing-im-finanzmarkt-nicht, criticising the decision of the Federal Council to rely on self-regulation until 2027 because of vague requirements and the lack of enforceable investor protection. ↩

For general information only. This article does not constitute legal or tax advice, does not replace advice on an individual case and creates no lawyer-client relationship. It reflects the legal position as of September 2025.

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