Sustainable finance at FINMA

Sustainability is a significant challenge for the financial markets, which is why FINMA, as the supervisory authority, is also actively addressing this issue. In line with its mandate, FINMA’s focus is on the associated potential financial risks and client protection issues.

Sustainability in all its dimensions represents a significant challenge for the financial markets. In its strategic goals 2021 – 2024, FINMA committed to contributing to the sustainable development of the Swiss financial centre. In line with its mandate, FINMA’s focus is primarily on the sustainability-related financial risks for financial institutions and the financial system. Climate-related financial risks are currently the most measurable and significant financial risks in connection with sustainability and are therefore the primary concern. To protect investors, FINMA is also addressing the issue of greenwashing in the distribution of financial products and services. FINMA’s mandate does not include actively promoting sustainable investments or investments in sustainable assets.

In line with its strategic goals and legal mandate, FINMA is pursuing four medium-term priorities:

  • Integrating climate risks into supervisory practice
    The source of climate risks for banks, asset managers or insurers is usually physical climate change risks or climate-related transition risks, for example due to climate policy measures (Climate change risks). Financial institutions must capture and manage these risks as part of their risk management. FINMA monitors and supports this as part of its risk-based supervisory activities. It is expanding its supervisory activities in this area and continuously enhancing its corresponding supervisory tools.

  • Transparency about climate risks
    FINMA additionally ensures greater transparency about climate-related financial risks by regulating the standardised disclosure of these risks by significant financial institutions and monitoring the implementation of and compliance with these requirements. At the end of May 2021, it therefore clarified the disclosure requirements for significant financial institutions in the area of climate-related financial risks.

  • Combating greenwashing
    From a client protection perspective, FINMA is also addressing the risks involved in the provision of financial services and the distribution of sustainability-related financial products. Clients may not be deceived by exaggerated or misleading claims about sustainable attributes – for example of investment products.

  • Other potential sustainability risks
    Over and above climate-related financial risks, FINMA generally considers the various dimensions of sustainability and, in this context, is vigilant about potential emerging or growing sustainability-related financial risks.

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