SUSTAINABILITY IN FOCUS
Swiss Climate Scores for Transparency in Financial Investments
The Swiss Federal Council launched Climate Scores in order to increase transparency towards clients and investors of financial investments. The Climate Scores were launched at a meeting of the Federal Council on June 29th, 2022.
The aim of the Climate Scores is to provide institutional and private investors in Switzerland transparent information on how financial investments are compatible with international climate goals and how they consider climate-related risks. The Swiss Climate Scores should be applied by all market players, the Federal Council recommends.
The Swiss Climate Scores include a number of indicators of investment portfolios to reflect a current state and positioning towards future climate goals, i.e. net zero by 2050. The indicators present a best practice approach to climate transparency.
The Paris Agreement, the framework for global climate goals, was established in 2015 with the ambition to limit global warming to well below 2 degree Celsius (2°C) and reconfirmed in 2018 to limit global warming to 1.5 degrees Celsius (1.5°C) by the end of the Century compared to pre-industrial levels. In order to maintain a probability to reach the climate goal, entering a pathway to achieve net zero by 2050 and reducing 50% of global greenhouse gas (GHG) emissions by 2030 is key.
The voluntary Climate Scores should enable clients and investors to make investment decisions more efficient.
“Investors can benefit from economic opportunities in the transition to net zero and at the same time better contribute to achieving climate goals.”
Source: State Secretariat for International Finance, SIF (link, as of 31.07.2022)
Bank J. Safra Sarasin and its Sustainable Asset Management is firmly committed contributing to the Paris Agreement and providing climate transparency. In 2020, J. Safra Sarasin Sustainable Asset Management launched an ambitious Climate Pledge aiming for a net-zero outcome by 2035 for all assets under management, and in 2021 joined the Net-Zero Asset Managers Initiative. The Climate Pledge, along with other sustainability commitments, are important milestones towards achieving the Paris Agreement’s goal.
The Bank’s ambition on climate is underpinned by a range of sustainable investment strategies, including the actively managed sustainable equity strategy “Global Climate 2035”. The proposed Climate Scores are in large part already firmly established indicators in the periodic ESG reporting at J. Safra Sarasin Sustainable Asset Management. For illustration, the Climate Scores for the example of the sustainable equity strategy “Global Climate 2035” are highlighted below:
Swiss Climate Score Global Climate 2035– Indicators on Greenhouse Gas Emissions and Exposure to Fossil Fuel Activities
Source: Bank J. Safra Sarasin Ltd; Certain information © 2021 MSCI ESG Research LLC. All data refers to the holdings of the portfolio as of 30 June 2022. * Note: Scope 3 GHG emissions data is estimated and includes upstream and downstream.
Swiss Climate Score Global Climate 2035 – Indicators on Global Warming Potential, Management to Net-Zero and Credible Climate Stewardship
Source: Bank J. Safra Sarasin Ltd; Certain information © 2021 MSCI ESG Research LLC. All data refers to the holdings of the portfolio as of 30 June 2022.
Net Zero Monitor Global Climate 2035 – Climate Pledge Net Zero 2035 and Decarbonisation Pathway
Sources: Bank J. Safra Sarasin Ltd; Certain information ©2021 MSCI ESG Research LLC. Reproduced by permission. As of 30.06.2022. Allocations and underlying holdings may change without notice. Portfolio: JSS Sustainable Equity - Global Climate 2035. Benchmark: 100% MSCI World NR. Note: Carbon Footprint data is only based on Scope 1 & 2 GHG emissions.
The J. Safra Sarasin Sustainable Asset Management Climate Pledge aiming for a net-zero outcome by 2035 is currently under implementation. By the end of 2021, 19% of assets under management are already managed in line with net zero. The Climate Pledge methodology is outlined in the Climate Policy and follows the Paris Aligned Benchmark regulation with four elements:
- The reduction target is based on the carbon footprint of the benchmark per 31.12.2020.
- The initial target is a 30% reduction of the benchmark carbon footprint. In each following year this is reduced by 7%. This amounts to a fair share reduction of approx. 50%
- From 2030 onwards the target reduces linearly
- until the carbon footprint reaches 0 in 2035.
Currently, the carbon footprint includes Scope 1 and 2 GHG emissions. The ambition is to phase in scope 3 emissions over time.The sustainable equity strategy “Global Climate 2035” has implemented the Climate Pledge, as displayed in the Net Zero Monitor that tracks its decarbonisation pathway.