Switzerland backs TCFD for Climate Transparency
On 12 January, Switzerland officially became a supporter of the Task Force on Climate-related Financial Disclosures (TCFD), demonstrating the government’s support for greater disclosure of and transparency around climate-related financial risks. This development is part of a wider policy shift towards more sustainable finance.
The TCFD was established by the Financial Stability Board to develop a framework that enables companies and investors to assess their exposure to climate risk, and adjust their strategies accordingly. It ultimately aims to foster transparency and make economies better equipped to deal with climate change.
At a meeting in December, the Swiss Federal Council discussed proposals on how to strengthen the country’s position in sustainable financial services. While many major Swiss companies have already implemented the TCFD’s recommendations, the Council called upon remaining companies from across the economy to do so on a voluntary basis. During the coming year it will be drafting a bill to make the recommendations binding, in consultation with the private sector and financial industry associations
The move comes following the adoption of a range of Environmental, Social and Governance (ESG) reporting and due diligence requirements earlier in 2020. Despite a November referendum in which Swiss voters rejected the somewhat further reaching Responsible Business Initiative, the government-backed counterproposal approved by parliament in June is now highly likely to come into force, bringing Switzerland’s approach closer to that of the EU. From 2022 or 2023 companies of public interest will be subject to new ESG reporting duties.
All this adds up to a significant swing to greater transparency in and focus on ESG disclosure – one which we’ll be keen to watch, and support, as it unfolds. Perhaps digital versions are not far away?