Geneva aspires to become a global hub for sustainable finance. While it has all the right players on the ground, it also hosts an industry rich in allegations of climate-unfriendly practices.
Geneva faces Beijing, Tokyo, London and Frankfurt, as well as several cities in Canada, in a bid to host the International Sustainability Standards Board (ISSB).
The call for an international body for sustainable reporting comes from the International Financial Reporting Standards Foundation, which is looking for a financial center with a global reach.
Financial Hub vs. Global Governance
«International Geneva has already established a dialogue between U.N. organizations and NGOs specialized in sustainable finance and impact investing, and its financial institutions,» Edouard Cuendet, director of Fondation Genève Place Financière, a foundation which represents Geneva's financial industry, tells finews.com in an interview.
However, Geneva’s multitude of financial institutions might not be as important for its chances to win the bid. «The presence of the world’s governments, represented through their missions, and Geneva’s long tradition as host of international organizations and NGOs is key for the location,» Christoph Baumann from the Swiss ministry for international finance, tells finews.com over the phone.
He also stresses that Switzerland’s financial center is «strongly committed» to climate-related financial disclosures as laid out by The Financial Stability Board’s task force TCFD, which counts G20 countries as members.
Tarnished Role Model
For some, this commitment is insufficient: «Before Switzerland can serve as a credible global role model for sustainable finance, it has to clean up the highly problematic sectors it is hosting,» Oliver Classen a spokesperson for Public Eye, tells finews.com.
For the Swiss NGO, which wants Swiss politics and businesses to respect human rights and the environment in poor countries, the country’s sustainability push stands at odds with the numerous commodity trading companies allowed to be domiciled here.
«Switzerland’s authorities have a bad track record particularly when it comes to their human rights violations and environmentally damaging policies abroad,» Classen says. «As the Pandora Papers have newly shown, there is practically no international corruption scandal which isn’t in some way tied to our country’s financial service industry,» he adds.
Everyone at the table
For Cuendet it is clear that for there to be any progress in the transition towards a sustainable economy, you need to get everyone at the table: «Exclusion is not a solution in my opinion,» he says.
In any case, Geneva will find out if it will become home to the ISSB at the United Nations climate change conference COP26, which will take place in Glasgow next month.
