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The suspicion has become stronger in recent years: Not only assets in general, but also socalled “sustainable investments” presumably do not generate a significant positive investment impact on the environment and society, as the name of the definition might lead to believe. Even though not all sustainable investment approaches are aimed at generating a positive investment impact in the first place (see chapter 3.2.4), it is often explicitly or implicitly suggested in the fund name or documents. This is why the accusations of “greenwashing” have become louder in connection with sustainable investments. According to the EU Sustainable Finance Action Plan, greenwashing is “the use of marketing to portray an organisation's products, activities or policies as environmentally friendly when they are not.”35 Greenwashing in the context of financial markets can be misleading claims about environmental products, performances, and practices in order to attract capital. It “refers to a wide variety of practices that range from mis-labelling to mis-representation and mis-selling of financial products”.36 Meanwhile, both the Swiss government37 and the Swiss Financial Market Supervisory Authority FINMA have also drawn attention to problems related to greenwashing. FINMA, as part of its strategic sustainability goal for the years 2021 to 2024, will pay special attention to greenwashing risks and, if necessary, take the necessary action.38 Both greenwashing and the substantial amount of private capital to help finance a transition towards a sustainable economy have driven fast and effective political action during the last five years. Particularly noteworthy is the EU Sustainable Finance Action Plan 39 which, to a large extent, has already been cast into far-reaching regulations (see chapter 5.2.1). The Swiss Federal Council has so far focused on voluntary actions by the market, but just recently indicated that new regulations might be necessary to achieve the goal of financial flows becoming Paris-compatible by 2050.40 The Federal Council furthermore stated that Switzerland would be guided by international developments, particularly in the EU, in addressing the challenges (see chapter 5.2.2).41
2.2. How investments can contribute to sustainability Against this backdrop, this study aims to help shed light on whether or not the current, rapidly growing "sustainable investments" are effectively contributing to sustainability goals. To do this, it is first necessary to clarify how investors can contribute to sustainability in the first place in order to understand where the problems currently are, and how they can be solved. 35
European Commission 2018. Maijoor 2020. 37 Swiss Federal Council 2021. 38 FINMA 2020. 39 European Commission 2018. 40 Article 1 of the Swiss CO Act also makes a reference to the Paris Agreement Article 2c, see BBI 2020 and, for further details, 2 chapter 5.2.2. 41 Swiss Federal Council 2021. 36
INFRAS | 3 May 2021 | Summary
