The impact of pension fund investments in Switzerland
The issue of pension fund investments is becoming increasingly important in a world seeking greater sustainability. With over 1,100 billion Swiss francs at stake by 2023, these funds influence not only our pensions, but also our country’s economy. How do you know if your pension fund is part of this effort? And how can you, as a company or employee, encourage more responsible investment choices? Discover the answers in this article, which highlights the ClimateAlliance Switzerland‘s climate ranking of pension funds.
At the end of 2023, Switzerland’s pension funds managed a portfolio worth over 1,100 billion Swiss francs, according to the report on the financial situation of pension funds 2023. This colossal amount plays a central role in the national economy, as it is invested in a wide variety of assets: companies, infrastructure, government bonds, real estate and more. In other words, this money is not simply “in reserve” for Withdrawal; it circulates throughout the country’s economy, helping to finance numerous sectors. These investments have a dual function: on the one hand, they serve to secure citizens’ pensions by generating stable returns for pension funds; on the other, they indirectly influence the economy and society, as the choice of projects in which to invest can encourage certain practices. For example, by directing funds towards organizations committed to sustainability, these investments become a significant lever for encouraging a more responsible economy.
The Climate Alliance Switzerland ranking: a guide to more responsible investments
In view of the impact these investments can have, the Climate Alliance Switzerland, an organization committed to progressive climate policy, has created a climate ranking of pension funds. Its mission is to regularly assess the climate impact of the investments of over 400 Pension funds in Switzerland, to ensure that these institutions are contributing to a more sustainable economy. The ranking assesses how pension funds manage their funds in line with climate protection principles: it measures their commitment to supporting projects aligned with greenhouse gas emission reduction targets. The aim of this ranking is to give companies and employees greater transparency over the use of their pension funds’ money, and to encourage investment in more responsible projects.
By establishing this ranking, the Climate Alliance hopes to encourage pension funds to adopt investment practices that take climate risks into account and contribute to a more sustainable economy. This kind of transparency helps companies and employees to make more informed choices, and to support sustainability efforts beyond their own organization.
In concrete terms, how do our specialists use this classification?
In the same way as our insurance team’s eco-score, which rates insurance companies according to their commitment to various aspects of sustainability, our BVG specialists use the Swiss Climate Alliance’s rankings for equities, bonds and alternative investments, as well as for real estate, to help our customers make their occupational pension decisions. By presenting this ranking, we aim to encourage companies to integrate sustainability aspects into their choice of pension fund, in addition to traditional financial criteria. This process enables our corporate clients to select a fund that not only meets their pension needs, but is also aligned with their values.
Acting as an organization or as an employee?
Companies and their employees have a key role to play in encouraging more responsible investment choices: as a company, you can take action by choosing pension partners aligned with sustainability values. Being aware of where your pension funds are invested helps to encourage investments that support environmentally-friendly projects. Selecting a pension fund that stands out in the climate rankings is an approach that goes beyond financial performance and integrates social and ecological responsibility issues into pension management. As an employee, don’t hesitate to ask your employer about his or her pension plan choices. By informing yourself about the climate impact of the pension funds you choose, you encourage your organization to look into these criteria and make well-considered choices that take their impact into account.
Want to find out more?
In conclusion, we believe that pensions can and must be a driving force in the transition to a more responsible economy. If you are interested in this subject, please do not hesitate to contact our team of experts.
Your contact
Sébastien Barbey
Head of Pension Fund sbarbey@loyco.ch
+41217035200