Swiss central bank invests US$9bn in fracking, study finds

November 27, 2023|Written by |Swiss National Bank

The Swiss National Bank (SNB) invests roughly US$9bn in 69 oil and gas fracking companies despite many Swiss states banning the environmentally damaging oil extraction method, a new study shows.

Fracking accounts for half of the US$16bn the SNB has invested in fossil fuel extraction, or 4.27% of its equity investments. This makes it responsible for seven megatonnes of carbon dioxide equivalent through its investments, according to the SNB Coalition and Climate Alliance Switzerland.

Fracking uses high-pressure liquid to force open fissures to extract oil or gas. The method has been shown to cause a vast amount of wastewater, emit high levels of greenhouse gases, and damage natural habitats and wildlife.

As such, fracking has faced significant opposition, including in Switzerland. Fourteen of the 26 cantons which make up the federal state have taken stances against fracking. These 14 cantons are home to 69% of the Swiss population, owning around three-quarters of SNB shares held by cantons, the report has found.

Investing in fracking goes against the SNB’s own investment values, the group said. The SNB claims to consider the “norms and values of Switzerland” when making investment decisions and does not invest in companies that “systemically cause serious environmental damage”.

“Due to the broadly supported rejection of fracking by cantonal governments and the population, it can be considered a norm and value of Switzerland, which the SNB should also respect,” the report states.

Switzerland passed a climate law in June to reach net-zero emissions by 2050, which was backed by 59.1% of voters in a public referendum. In light of this law, the SNB should acknowledge that rejecting harmful extraction methods like fracking is “a norm and value of Switzerland,” the coalition said.

“Fracking falls under the SNB’s formulated criteria, according to which investments in companies that poison water bodies and nature, and seriously violate human rights should be excluded,” the report said.

The SNB Coalition and Climate Alliance Switzerland recommended that the SNB instead exercise its shareholder rights to make sure companies align with climate and biodiversity goals and implement an escalation strategy for companies that fuel the climate crisis. The organisations also said the bank should disclose the investment strategies for its foreign exchange portfolio and disclose its progress on aligning reserves with climate goals.

This page was last updated November 27, 2023

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