Geneva body aims to make SRI a conventionJanuary 2009
Mike Scott talks to one of the founders of a new organization that intends to spread the word about sustainable finance in Switzerland, where the private banks are a particular target for education Geneva holds an unusual position as both a major European banking centre and host to a number of the world’s most prominent international organizations addressing global challenges, such as the United Nations, the Red Cross and the World Business Council for Sustainable Development.
Add in the prevalence of Swiss private banks, which spend a large portion of their time dealing with philanthropic investments for clients, and it’s not surprising that Geneva boasts an active sustainable finance community.
Now, it also has a body – Sustainable Finance Geneva (SFG) – devoted to promoting the issue and developing the city as a centre for responsible investing .
The Swiss market for socially responsible investments (SRI) is fairly well-developed, with both the institutional and retail markets in the country being worth about €3bn, according to Eurosif, the European Social Investment Forum. Swiss banks were among the first to offer SRI and to develop the necessary expertise, according to Eurosif. It was a Swiss company – Sustainable Asset Management – that was responsible for one of the big steps towards SRI gaining a broader audience by forming, with Dow Jones, the Dow Jones Sustainability Index.
Although there are a number of people involved in SRI or philanthropy in Geneva, SFG has been formed because ‘many were quite isolated and marginalised within their institutions’, according to Antoine Mach of SFG’s executive board and co-founder of Covalence, a consultancy that tracks the ethical reputation of multinational companies.
‘We wanted to support them and show their conventional finance colleagues the work they are doing – and its value,’ he adds. ‘Now, more than ever, there is a need for something more sustainable.’
SRI has grown more strongly among institutional investors than their private counterparts, and the Swiss financial sector has a high proportion of private banks. This, coupled with the innate conservatism of the Swiss market, means ‘there is a need to push new ideas.’
Mach says Geneva looks more to France in its SRI concerns and emphasises issues such as labour rights, while Zurich and German-speaking Switzerland puts more weight on climate change and environmental issues, influenced more by Northern Europe. The presence of global humanitarian organizations and the Swiss tradition of humanitarian initiatives means that issues like international development are an important focus for SFG. ‘One of our aims was to link the financial sector with international organizations such as the UN,’ he adds.
UNEP-FI, the finance initiative of the UN’s Environment Programme, wants to convince institutions to adopt the organization’s Principles for Responsible Investment (PRI). ‘While they may be only a few hundred metres away, at the same time there is a great distance between them,’ Mach points out. Many organizations sign up to the PRI without realising the commitments involved. ‘The PRI is still very young, so a number of organizations are going to have to show what they are doing to meet the principles,’ he says.
SFG also aims to spread the word about good practice and innovative products, and to provide training ‘to help banks willing to move forward in the field’.
Sustainable finance seems to be spreading beyond the small group of sustainable investment specialists, with 250 people from the ‘conventional finance’ community attending the launch. ‘We have a lot of work to do to stimulate sustainable investment, but there’s a lot of interest at the moment,’ Mach says.
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