“Green” investments are experiencing a slowdown in Switzerland, after having suffered a decline in the United States. A study by a financial research institute in Zug reveals that for the first time in years, financial flows are greater in traditional funds than in sustainable funds.
In Switzerland, so-called “green” investment funds, ESG, which meet environmental, social and governance criteria, still attract capital, but no longer enough to catch up with traditional funds. The latter, having no investment restrictions, particularly in fossil industries, are gaining ground, according to a study by a financial research institute based in Zug.
This study also showed that while the demand for sustainable investments had increased in Switzerland between 2018 and 2023, managing to attract 550 billion francs, the inflow of money had decreased last year. According to researcher Brian Mattman, interest in funds linked to climate, environment or energy has weakened.
Paradoxically, the offer of sustainable products continues to develop in certain banks and the Swiss financial center has placed a lot of emphasis on this type of asset. According to experts, this stagnation of flows is normal after years of strong growth. Investors have seen the range of investment funds triple since 2020. However, their proliferation has made it difficult for investors to distinguish truly sustainable products from those that claim to be.
The impact of the war in Ukraine
The question of performance plays a role in this loss of enthusiasm. If sustainable finance, long more efficient than traditional finance, has lost ground, it is partly linked to the war in Ukraine. Indeed, energy supply problems have favored polluting and arms companies.
In addition, a general context of growing rejection of ESG themes by certain investors around the world influences this development. This slowdown comes at a time when the Swiss financial center had relied heavily on sustainable finance to reposition itself after the end of banking secrecy. Despite this decline, experts believe that the sustainable finance sector will continue to play an important role in the Swiss financial landscape.
Radio subject: Mathilde Farine
Adaptation web: itg
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