Switzerland introduces climate scores for investment products

Switzerland’s Federal Council has launched Swiss Climate Scores, which is based on a series of indicators focused on providing transparency into the connection of firms and global climate goals.

According to ESG Today, the council is requesting, on a voluntary basis, that banks, asset managers and insurance firms apply the scores to their client portfolios and investment products, which will enable investors to better assess the climate alignment of their investments amongst other things.

Some of the criteria assessed in the scores include greenhouse gas emissions, fossil fuel exposure, global warming potential, net zero strategy and commitments as well as climate stewardship.

The new scores are meant to be compatible with existing climate measures, drawing heavily on existing initiatives.

The council claims that the scores go beyond current systems, such as the EU Taxonomy, by not only providing a climate snapshot of company or portfolio’s current environmental status, but also including forward-looking information of where firms are positioned and their transition plans relative to the global climate goal to limit warming to 1.5 degrees.

The Federal Council said, “The voluntary use of the Swiss Climate Scores is intended to make investment decisions more efficient. Investors can benefit from economic opportunities in the transition to net zero and at the same time better contribute to achieving climate goals.”

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