Many Swiss investors tend to invest in CO2-intensive companies. However, if banks were more transparent, they could demonstrate to those investors just how big the according climate risks are. That is why the Alternative Bank Schweiz (ABS) discloses the complete carbon footprint of their investment business with the help and support of South Pole Group.
Climate change is becoming more and more of a financial risk for investors. The mispricing of companies that have big reserves of fossil fuels or are active in CO2-intensive industries leads to a so called "carbon bubble". This bubble can burst, for instance, if local or international laws concerning carbon emissions become more strict and such an event can lead to impactful financial losses. Banks are obligated to educate their clients about risks - and increasingly, that includes climate based risks.
Max Horster, PhD and partner financial industry at South Pole Group confirms: "By calculating the climate footprint of their entire investment universe, ABS sets a good example for the industry. Through this measure, the bank shows the scope of climate risks in the investment business". Michael Diaz, Head of Investments at ABS and member of the board adds to this statement, explaining: "It's even more important for us to show that the Swiss banking industry can play an active role in the fight against climate change".
ABS is a pioneer in this field as the first bank in Switzerland to have analysed and evaluated the CO2 footprint of their entire investment business. The results speak a clear language: The ABS Investment Portfolio causes 50% less CO2 emissions compared to a standard index. This is because the investment universe of ABS is carefully selected according to social and ecological criteria.