6. Discussion of Results

Nevertheless, since many Swiss financial market players do business in the EU and offer financial products, the EU rules discussed in the previous section are also relevant for Switzerland. It is remarkable that even some market players doing business only within Switzerland –especially but not only sustainability pioneers – are preparing to adhere to EU regulations. The motives may be reputational resp. credibility reasons and/or anticipation of Swiss regulations following EU regulations.

Meanwhile, in December 2020, the Swiss Federal Council decided to work on a proposal for “necessary amendments to financial market legislation to prevent so-called greenwashing”.104 International developments, especially in the EU, are to be taken into account to ensure that Swiss financial products remain exportable. Besides making an effective contribution to sustainability, an important goal of the government is to maintain the competitiveness of the Swiss financial centre. In addition, the completely revised CO2 Act, which is still to be submitted to a vote of the people due to a referendum, stipulates that financial flows are to be aligned in a climate-compatible manner.105 End of January 2021, Switzerland’s Long-Term Climate Strategy was published. It contains the following 2050 target for the financial market: “Switzerland's financial flows are to be made consistent with a pathway towards low greenhouse gas emissions and climate-resilient development by 2050 in accordance with the target of the Paris Agreement.”106 Consequently, regulatory activities are also increasing in Switzerland, albeit at a somewhat slower pace.

In this chapter, we discuss the results of the empirical research (chapter 4) in greater depth. The more detailed empirical results (data and figures) are to be found in chapter 4 and Annex B. With the discussion of results, we provide inside into research questions one and two (as described in chapter 1) as follows: ▪ In chapter 6.1 we set out the results for the investigated capital allocation effect. This sheds light into whether sustainability retail funds in Switzerland and Luxembourg effectively channelled capital into sustainable economic activities, respectively to what extent they were still invested in problematic activities (first research question). ▪ In chapter 6.2 we describe the findings concerning the asset management effect. In contrast to the capital allocation effect, which determines the actual capital flows, the asset

104 Swiss Federal Council 2020a. 105 BBI 2020: CO2-Gesetz. 106 Swiss Federal Council 2021.