Report: Major Swiss financial institutions continue financing dirty projects

Major Swiss financial institutions lack robust climate policies and continue to channel billions of dollars to companies developing new coal, oil and gas supply projects, according to a new report.

The report, authored by Reclaim Finance, BreakFree Switzerland and Greenpeace Switzerland and released last month, examines the policies of five major Swiss financial institutions–UBS, the now defunct Credit Suisse, Swiss Life AM, Zurich, and Pictet. They account for nearly US$2tn in banking assets and US$3.6tn in assets under management. The report concludes that “major loopholes and weaknesses” in banks’ policies mean that they “continue providing financial services that are essential to the development of new coal, oil and gas projects”.

It demonstrates that the banks’ policies have not effectively banned coal expansion. For example, although UBS and Credit Suisse have stopped providing direct support to most new coal mines and plants, the five institutions are still underwriting their bond issuances, which allows the firms to raise capital elsewhere. UBS refuses to provide financial services for mining and power companies that derive more than 20% of their revenues or capacity from thermal coal and if they do not have a transition strategy “aligned with the goals of the Paris Agreement”, but the report states that there are 76 companies below that 20% threshold that have coal expansion plans. In addition, the report concludes that none of the five institutions are asking companies to decrease their oil and gas production.

“The report reveals that the climate guidelines of the investigated Swiss banks are insufficient to prevent them from continuing to support  the expansion of  fossil fuel production,” said Niki Vischer, technical expert for sustainable finance at Greenpeace Switzerland.

According to the report, the institutions continue to provide financing support to companies like ExxonMobil, which is planning to add 7 billion barrels of oil equivalent (bboe) to its production portfolio; Shell, which is planning to add 3.8 bboe; and the Adani Group, which is planning to add 12 gigawatts of new coal plants and expand eight coal mining operations.

“Swiss finance needs to stop bankrolling coal developers like Glencore and the Adani Group”, said Lara Cuvelier, sustainable investments campaigner with Reclaim Finance, “and regulators must ensure that any future rescue using public money is conditional on curbing financial flows to climate wreckers.”

Four of the five institutions evaluated by the report have committed to net zero by 2050. However, they continue to support fossil fuel development through loans, underwriting securities and purchasing bonds by fossil fuel developers and without significant conditions on ending the firms’ expansion strategies, according to the report. New coal, oil and gas projects are contrary to the goal of limiting global warming to 1.5 degrees. Research shows that holding fossil fuel-backed assets may pose financial risks to financial institutions.