Swiss sustainability in Geneva

Appearing in the Spotlight column in Le Temps on Monday, 5 August 2019

Long supported by a handful of pioneering institutions, sustainable finance has accelerated dramatically over the past four years, to the point where it is now becoming the norm rather than the exception in a booming financial industry. Every financial centre is therefore looking to position and establish itself as a point of reference for sustainable finance in order to take full advantage of the sector's very strong growth.

Of course, not all financial centres are equal when it comes to sustainability expertise. Analysis of environmental and social impacts cannot be improvised, and asset managers need substantial investment – and often several years – to develop the tools, methodologies and expertise needed to compile these data precisely and ensure that they become decisive criteria in the decision to invest, on the same basis as risks and returns.

In this respect, the Geneva financial centre has undeniable advantages: the proximity of international organisations, UN agencies and large private foundations allows Geneva's banks and managers to develop their expertise by working alongside the international community which, on the other side of the lake, addresses the challenges of sustainable development on a daily basis, often in the field. This proximity, which is unique worldwide, has not always been fully exploited in the past. With the notable exception of microfinance, where the proactive collaboration of the various players in the ecosystem has given rise to what is now called impact finance, exchanges between the two shores have sometimes struggled to move beyond the stage of good intentions to concrete achievements.

Over the past two years, however, there have been improvements to structures and organisation, and Geneva and Switzerland are now fulfilling their role as laboratories and innovators in sustainable finance. Innovative projects involving international organisations and Geneva's banks are multiplying, such as the Humanitarian Impact Bond set up by the International Red Cross, with which Lombard Odier is closely associated. The Pipeline Builder, a platform developed on the initiative of the SDG Lab, is another striking illustration. The tool, currently under development, aims to accelerate the achievement of the Sustainable Development Goals by pinpointing the best investment opportunities from the various UN agencies and other partners in close collaboration with financial specialists.
 

The SwiSOX project, led by Sustainable Finance Geneva, involves setting up the "Nasdaq for social enterprises" in Geneva, and would not have been possible without the participation of the academic sector or that of a large Genevan private foundation with an environmental focus. We must also mention local fintech players, many of whom focus on sustainable finance or impact measurement. They help boost innovation and build the transformative solutions that will be used by the international financial community in the future. Finally, the establishment in Geneva of the sustainable financial centres network (FC4S) in 2018, which was a hard-fought deal, reaffirms its role as an international hub for sustainable finance.