Proposed environment-related changes in Swiss financial sector face opposition

Governing body views initiative as questionable and not necessary.

Switzerland's Federal Council is opposing the so-called "For a sustainable and future-oriented Swiss financial centre (financial centre initiative)," which the governing body considers unnecessary.

"In its view, existing legislation and the Federal Council's climate and financial market policies already adequately address the initiative's climate policy objective," the Federal Council said in a release. "There is no need for additional regulation."

Existing laws cited by the Federal Council include the Climate and Innovation Act and the Climate Disclosures Ordinance.

Amongst its proposals, the financial centre initiative wants to prohibit the Swiss financial market from providing financing and insurance to those looking to develop or expand fossil fuel reserves.

On this, the Federal Council argued: "If such bans were introduced in Switzerland, it is highly likely that these services would instead be offered by providers abroad, meaning the effectiveness of such measures would be questionable."

The proposed introduction of new supervisory and sanction mechanisms is also being opposed by the Federal Council, which will recommend that Parliament reject the financial centre initiative.

Additionally, the Federal Council does not deem it necessary to align business activities that impact the environment abroad with international biodiversity targets.

"Until meaningful, transparent, and internationally recognised standards have been established, an immediate obligation to align business activities with biodiversity targets will entail uncertainties and associated costs for the market participants concerned," it said.