Future-proofing: an obligation

By Antoinette Hunziker-Ebneter, 02.03.2016

Antoinette Hunziker-Ebneter

Antoinette Hunziker-Ebneter is CEO and founding partner of the sustainable asset management company Forma Futura Invest, Zurich.

In terms of sustainability, the Swiss financial centre is in a good place: the range of sustainable investments on offer is broad. However, greater transparency is needed if it is to succeed as a responsible financial centre in the long term.

The sustainability obligation is our responsibility. Scarce resources, climate change, social inequalities: the challenges we face are pressing and this is why we must act now. For this reason the thinking in many areas of life is changing today – for example, in education and the labour market, company foundations, consumer behaviour and nutrition, and, last but not least, living and mobility. As individuals, we assume responsibility in our everyday lives by forming our own well-founded opinions and by making informed decisions.

A responsible approach to finance and money is part of this zeitgeist. Anyone who recalls the excesses of the finance industry in recent years will find it difficult to associate this sector with sustainability. However, the successful transition to a responsible approach to the environment and society in the context of a future-proof economic system is equally inconceivable without the involvement of the financial sector.

Financial service providers in Switzerland recognised this shift at an early stage and developed a corresponding range of sustainable investments. Combined with its commitment to the Weissgeldstrategie  (‘clean money strategy’), the finance industry has a solid basis for the development of a sustainable financial centre.

It is crucial that the financial system serve the needs of the real economy and society so that the transformative power of money as a means of promoting a sustainable quality of life can be exploited. A future-proof financial system must recall its primary role as a supplier and must not become an end in itself.

Taking the entire value-added chain into account

A sustainable financial centre can only emerge through the involvement of all actors. Hence it is the responsibility of the financial intermediaries to enable the allocation of financial resources in a way that supports a future-proof economic system – not only in the case of investments but also in the areas of lending and due diligence for company mergers.

An economic system can only be future-proof if companies take account of all costs arising along the entire value-added chain in the pricing process and thus create congruence between price and value. This is not the case when personal profit takes priority and ecological and social cost implications are externalised, that is imposed on the general public.

More and more investors are also actively demanding this kind of allocation. Hence, the recently launched “Swiss Foundation Code 2015”, which formulates governance guidelines for foundations, recommends that sustainability should be a target for asset management – along with the payment of funds. The current wave of disinvestments away from fossil fuels among major pension funds is evidence of this trend.

It remains to be hoped that the finance industry will recognise its favourable starting position and actively use it to create a sustainable financial centre. To do justice to the title ‘sustainable’, the efforts must go far beyond the provision of sustainable investments. As actors who are aware of their responsibilities, market participants must make all of their transactions traceable; transparency is required, above all, in relation to bank balance sheets. In addition, the power relations of all actors must be revealed and incentive systems formulated with a long-term direction that serve the interests of social objectives. If the state also provides a binding and effective policy framework which can be implemented simply and accountably by all actors, there is a good chance that Switzerland will be able to position itself credibly as a sustainable financial centre.

This contribution was first published on “Die Volkswirtschaft – Plattform für Wirtschaftspolitik”, a website for economic policy.

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Last modification 02.03.2016

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