An important point: Switzerland is the country in the world with the highest number of sustainability-oriented start-ups in relation to its population. In addition, sustainable investments are supported by financial industry collaboration, government and institutional involvement, and the regulatory framework. In 2021, the volume of invested assets came close to 2 trillion Swiss francs.
In recent years, Switzerland has been steadily moving towards becoming one of the world's leading investors in sustainable development. The country's past, present, and future play an important role in this process: Switzerland has a long history as a strong financial center, an ecosystem that fosters innovation, and a plan for ethical and sustainable growth.
In this context, institutional efforts are combined with initiatives by financial centers, industries, and start-ups. For all these stakeholders, investing in sustainability means making a commitment to growing responsibly with the planet.
The key players
The study Why Switzerland is One of the Leading Hubs for Sustainable Finance and How to Support This Further, published in The Capco Institute Journal of Financial Transformation and subsequently released by Finance Swiss, points to a key player in creating a context that supports sustainable investments: the Swiss government. According to the report, the Swiss government promotes collaboration with the financial industry and fosters the creation of a favorable regulatory framework.
In 2022, the Federal Council launched the Swiss Climate Scores, a rating system designed to align financial investments with the objectives of the Paris Agreement and to position the country as an international leader in climate transparency. In the same year, the Swiss Bank Association (SBA) and its members outlined an action plan with specific measures to integrate sustainability requirements into investments and foster participation in zero-emission initiatives, among other initiatives.
Businesses are also involved in this process, showing a clear interest in sustainability. According to data from the Swiss Startup Radar 2022/2023, Switzerland is currently the country with the highest number of sustainability-oriented start-ups per capita in the world. Furthermore, the study indicates that the total volume of venture capital investments in the sector increased from 200 million Swiss francs to 600 million Swiss francs between 2019 and 2021.
There are many instances of investments in start-ups in the food industry and foodtech sector, which attracted a total of 87 million Swiss francs in investments in 2022 alone. While this figure is not limited to sustainable initiatives, many of these new companies are striving to establish a more environmentally responsible approach.
Examples include start-ups that promote the use and consumption of plant-based foods and plastic-free packaging, and others focused on more efficient production systems to minimize food waste.
And who are the investors? According to the Swiss Sustainable Finance study, institutional investors account for the largest share, outnumbering private investors. In 2022, the former accounted for 73% of the volume of sustainable investments, while private investors accounted for 27%.
The main projections indicate that Switzerland will remain a leader in sustainable investments in the short and medium term. The challenges for maintaining this position in the future include placing greater emphasis on education and collaboration to ensure that sustainability is central to investments.
Sustainable investment numbers in Switzerland
Understanding Switzerland's potential as a driver of sustainable investment starts with its privileged position as a solid and reputable financial center. In addition, despite its small size, the country is a major production center for innovative goods and services. This enables it to direct investments towards sustainability-oriented economic activities.
The figures illustrate the importance of sustainable investment in Switzerland today. According to the Swiss Sustainable Investment Market Study 2022, conducted by Swiss Sustainable Finance in collaboration with researchers from the University of Zurich, the volume of assets invested sustainably in Switzerland amounted to 1.9 trillion Swiss francs in 2021. In 2011, a decade earlier, this figure stood at 41 billion.
Overall, sustainable funds accounted for 53% of the total Swiss market. While the 2023 report does not provide an overall figure, since it analyzes investments from different perspectives, it still points to significant growth over the last decade. What is certain is that sustainability represents a tremendous opportunity for a country with a significant level of development and a benchmark for the wealthiest and most developed countries.
