On 17 december 2020, the Swiss National Bank (SNB) published its decision to exclude companies whose business primarily consists of operating coal mines from its approximately 900 billion in foreign currency reserves placed abroad. The Climate Alliance welcomes this small step, but calls on the SNB to drop oil and gas companies as well and to recognize the Paris Climate Agreement as a guideline for its entire investment policy.
As the eighth largest global institutional investor, the SNB has considerable leverage to protect humanity and its livelihoods from climate catastrophes. At the end of 2019, the SNB held USD 5.9 billion in 148 fossil fuel companies in its US portfolio: only 5 of these were coal companies with a very low value of USD 4.7 million. These few companies were expelled by the SNB. Even after the exclusion of coal mines, the SNB - along with other central banks - continues to invest in oil and gas companies such as Chevron, ExxonMobil, Shell and BP. By only excluding companies with a majority of their business in coal, it appears that SNB even intends to keep some of the largest coal producers, such as Glencore, in its portfolio.
"With today's decision, the SNB recognises for the first time that it has a responsibility to protect the climate with its globally influential investments" says Christian Lüthi, Director of the Climate Alliance. "Now, we call on the SNB to lead by example and systematically fulfil its duty in implementing the Paris Climate Agreement through phasing out all its investments in fossil energies and investing in the green economy".
The SNB has invested an estimated 10 percent of its approximately 900 billion reserves in the US stock market. The share invested in other industrialised countries and the emerging markets is unknown. But already with the money invested in the USA, the SNB causes indirect emissions of 43.3 million tonnes of CO2eq per year, about the same as Switzerland's domestic emissions.
On the occasion of the SNB's General Meeting on 27 April 2018, the Climate Alliance published a study with concrete recommendations to the SNB on how the climate and the stability of the financial system could be protected:
- In a public statement, the SNB acknowledges the Paris climate agreement and the UN Sustainable Development Goals and announces the first steps.
- As a precautionary measure, the SNB develops principles that enable climate risks to be controlled while maintaining the stability of the financial system.
- SNB begins by conducting climate stress tests and scenario analyses for the Swiss financial sector – insurance companies, banks, pension funds – and publishes measures to contain macro risks.
- SNB evaluates the exposure of its own investments to climate risks.
- SNB extends the investment guidelines to exclude investments in companies that systematically cause serious climate damage.
- SNB determines and publishes the 2°C compatibility and CO2 emissions of its securities portfolios.
- SNB reveals the measures it intends to take to achieve the 2°C compatibility path in good time and reduce CO2 emissions, and how it will measure their success.
- SNB starts by divesting from the coal companies and all the companies with the largest fossil fuel reserves of the Carbon Underground 200 list.
- For the other sectors exposed to climate risks (e.g. electricity producers, suppliers to fossil fuel companies or car manufacturers), SNB also takes a "best in class" approach. SNB supports those companies that are determined to implement the energy transition (e.g. by switching to renewable energies).