The majority of Swiss pension funds’ real estate investments are located in Switzerland. For the Climate Alliance Switzerland, it is crucial that the funds become pioneers in the decarbonization of buildings. It has developed a climate rating for this purpose.
If the science-based 1.5°C target of the Paris climate agreement is to be reached, more investments must be made in a sustainable way. Investments in the fossil and unsustainable economy instead pose a risk not only for the climate, the planet and humankind, but also for pensions. «The pension funds are putting the capital of the insured at risk», explains Sandro Leuenberger of the Swiss Climate Alliance. And he warns: «The inevitable economic decline of the coal, oil, and natural gas industries, as well as the fossil-fuel economy, is causing savings to melt. Moreover, fossil-fuel-heated real-estate investments of pension funds are falling in value, while green buildings are becoming attractive.»
Climate rating Financial assets
According to Climate Alliance Switzerland, all financial institutions have an obligation to redirect financial flows sustainably. This is the only way to support limiting global warming to 1.5°C. Pension funds, major insurance companies, AHV funds and Suva must therefore also adhere to this obligation. With the Climate Rating Financial Investments, Climate Alliance Switzerland already evaluates around 420 Swiss pension funds, which account for almost 90% of the total investment volume.
Climate rating real estate
With the climate rating for real estate, the Climate Alliance Switzerland has now created another tool for comparability. It complements the Climate Rating Financial Investments. Sandro Leuenberger is satisfied: «With our influence on the majority of large and medium-sized pension funds since the beginning of 2023, we have carried out extensive detailed investigations in order to check our justifications for completeness of the underlying cases. We continue to monitor progress. Depending on the state of progress, we make recommendations as to which concrete steps the institutions could plan and implement for a sustainability strategy with a more ambitious decarbonization path.»
The intensive consultation phase of Climate Alliance Switzerland with around 100 pension funds has now been completed. Climate Alliance Switzerland thus covers around 75% of the total investment volume of around 1400 billion Swiss francs. Leuenberger adds: «The starting point has now been set. Now it is time for implementation with updating, extension and measurement of progress.»
