The Swiss National Bank is leaving no room for an eco-friendly investment policy. The question is how this squares with a parliament that has become decidedly greener at the recent elections.
The Swiss National Bank (SNB) is one of the biggest institutional investors with stocks worth some 150 billion Swiss francs ($152 billion) in its portfolio. With the huge increase of its holdings over the past years, which was the consequence of large-scale currency interventions, the management of the portfolio increasingly became an issue of public interest.
At Thursday’s media conference dedicated to monetary policy issues, Andréa Maechler insisted that the bank won’t change its approach. Maechler, who is in charge of the investment policy at the bank, said that the SNB didn’t pursue either strategic or structural objectives with its investments.
Climate Policy: Not the Bank’s Business
Instead, the managers try to achieve the broadest possible market coverage – or, in other words, a passive investment policy. Thereby, the SNB ensures that the balance sheet can be used for monetary policy purposes at any time and, ideally, preserves the value of the currency reserves.
«We can’t pursue a climate policy, that’s left to the political authorities,» said Maechler.
A Question of Definition
While the banking industry is busy churning out sustainable investment funds and is selling its stakes in businesses that harm the environment (the coal industry being one example), the SNB is keeping itself to the sidelines.
And yet, the ban to pursue structural objectives hasn’t prevented the bank from identifying industries that it won’t invest in because they stand in conflict with norms that are widely accepted in Swiss society. The bank avoids shares in companies which produce internationally banned weapons, seriously violate fundamental human rights or systematically cause severe environmental damage.
A Contradiction Within the Guidelines
It stands to reason that criticism about the restrictive interpretation of the central bank’s mandate won’t abate in a federal parliament that has become decidedly greener in the recent general election. After all, there is a contradiction between the bank’s policy of not engaging «in any stock selection» and the decision to exclude certain firms for reasons that are largely moral.
A year ago, the old parliament, which was dominated by a conservative majority, defeated a motion by Green Party member Adèle Thorens Goumaz, which aimed to oblige the SNB to uphold the principles of sustainable development and the preservation of nature – as is stipulated in the Swiss constitution.
A Greener Parliament
In the new parliament, it falls to the centrist parties to tip the scale. With memories fresh of a green landslide, the majority may decide that the central bank should get an updated version of the investment guidelines. In other countries, such as Sweden, a more active approach is already the standard.
