The Swiss National Bank’s equity holdings are heavily biased toward fossil fuels, a study shows, but the bank disputes this and has said its hands are tied by its mandate.
Greenhouse gas emissions from the Swiss National Bank’s equity portfolio are nearly as great as those of the central bank’s native country, a study sponsored by a series of NGOs said Tuesday.
The study «Unused Tools: How Central Banks Are Fueling The Climate Crisis» said SNB holdings were equivalent to 43 million tonnes a year of carbon dioxide emissions per year compared with Switzerland’s 47 million.
SNB Disputes Figures
The report also quoted research by Artisans de la Transition on the SNB’s carbon footprint as finding that as of the end of 2020 only 20 percent of its portfolio was invested in companies that plan to align with a 2 degrees Celsius global warming target.
The study said the SNB disputed these figures, but did not grant transparency. Further research showed that its share portfolio included equity in 27 of the world’s 100 most-polluting companies.
Operational Vs Policy Impact
Separate research into the SNB’s $94 billion of U.S. equity holdings showed that it included $1.847 billion in coal. Since the end of 2020, companies primarily active in mining coal were excluded from the central bank’s portfolio.
SNB executives have said that its operational activities have been carbon-neutral since 2011, but the report said the bank’s operational emissions are small compared with the impact of the its policies and investments.
Regulation Questioned
The study went on to say that prudential regulation in Switzerland has not been adapted to disadvantage fossil fuels.
A spokesman for financial regulator Finma has previous told finews.com it is down to financial institutions themselves to minimize risk and that environmental risks could be put under classical risk categories such as credit, market insurance or operational.
Public Reporting
Finma required the largest Swiss banks and insurers to report on potential climate risks related to its business, from June 1, saying this was an initial move, implying it wanted to extend the requirement to smaller financial companies, finews.com reported
The Swiss government said last week banks and insurers with 500 or more employees, over 20 million francs ($22 million) in total assets or a turnover of more than 40 million francs will be obliged to report publicly on climate issues from 2024.
«Tied by Mandates»
The parameters the government outlined also require companies to include the financial risk a company incurs as a result of climate-related activities as well as to disclose the impact of its activities on the climate and environment.
Both the SNB and Finma have previously told finews.com that they are tied by their mandates. An SNB spokesman said at the time that the bank had no mandate to operate structural policies, «i.e. it cannot make a positive or negative choice between sectors to support or punish the relevant sectors or to promote or hinder economic, political or social changes.»
