In cooperation with WWF Switzerland, Inrate has launched the latest rating study “Swiss pension funds and responsible investing – WWF pension fund rating 2018/2019”. On 4 February 2019 it was portrayed by the Swiss radio and television as part of the business magazine “ECO”.
The study assessed the 20 largest Swiss pension funds. The study analysed the extent to which these funds invest their policyholders’ money sustainably and provide transparent information about it. The rating shows that most of the pension funds examined, deal with sustainability aspects in their investments. However, only a few pension funds have consistently integrated sustainability into their investment processes and decisions. This means that the majority of the 20 largest Swiss pension funds are still relatively far from actively contributing to the transformation towards a sustainable society.
Half of the pension funds with improvements
Overall, there has been progress in many areas compared with the first rating three years ago. Almost half of the examined pension funds have improved. For the first time, three pension funds – the Bernische Pensionskasse, the Caisse de prévoyance de l’État de Genève and the Pensionskasse Stadt Zürich – achieved the “pioneer” category. They are pursuing relatively holistic approaches and are courageously making progress on important sustainability issues of the second pillar. There are four pension funds in the “pursuer” category, which is also classified as above average.
There is a need to catch up in the following valuation classes. The “upper midfield” comprises seven and thus one third of the pension funds exanimated. Two pension funds were classified in the “lower midfield” and there were no “latecomers”. Four pension funds remain non-transparent. They refrained from active participation and were assessed on the basis of publicly available information. One pension fund was rated one valuation class lower in the overall evaluation.
Only a few pension funds take climate change into account
Climate-related risks and opportunities still receive too little attention from pension funds. Only four of the 20 largest pension funds disclose a detailed strategy for dealing with climate risks for their investment activities, while two others at least publish a summary. Nevertheless, some progress can be detected compared to 2015/2016: at that time, only one pension fund had its own climate strategy.
Creating an impact
At the end of 2017, Swiss pension funds managed around 910 billion Swiss francs, equivalent to 133.1 percent of the local gross domestic product. Pension funds are thus among the largest and most influential investor groups. They are in a strong position to influence and steer the companies in which they invest. They must fully integrate environmental, social and responsible management into their investment decisions. Pension funds are among the key players when it comes to making the economy more sustainable. As shareholders and investors with a generation-spanning mandate, pension funds represent the holistic and long-term interests of their policyholders.
