Aurélia Fäh, Guillaume Toffel, Asset Management Association Switzerland.

Think the “ESG backlash” has brought sustainable finance in Switzerland to an end? Think again. Swiss asset managers are far from retreating from sustainable finance. On the contrary, they are taking it to the next level. The Asset Management Association Switzerland (AMAS) explains how.

Contrary to some perceptions, sustainable finance is not dead. In Switzerland, it is here to stay. Sustainability has become a structural component of investment processes, investor expectations and regulatory thinking. Rather than questioning its relevance, the industry is now focusing on the next step: translating sustainable finance into measurable impact in the real economy while continuing to generate competitive returns. This pragmatic approach reflects Switzerland’s financial ecosystem. As AMAS recently emphasised in a new position paper, Switzerland has developed a credible and sustainable model in recent years, built on principles-based self-regulation, close cooperation between the industry and public authorities, and a strong culture of fiduciary responsibility.

The Swiss model: conviction rather than compliance

The use of industry-led standards rather than prescriptive regulation is a cornerstone of the Swiss approach. AMAS has played a central role in this framework. AMAS has introduced binding self-regulation covering around CHF 1.4 trillion in assets — more than half of the assets managed in Switzerland — with clear definitions and robust transparency requirements designed to prevent greenwashing. In 2025, the framework was strengthened further: only best-in-class, stewardship, thematic, impact or climate-aligned approaches may now qualify as sustainable, while exclusions or ESG integration alone are no longer sufficient. Compliance with these rules must also now be audited. This model demonstrates that investor protection and market integrity can be ensured without excessive complexity, while preserving the flexibility required for innovation. Beyond self-regulation, AMAS has also contributed to the development of sustainable finance through the Swiss Stewardship Code and close cooperation with the regulator and public authorities.

From ESG integration to impact

The central challenge for the next decade is no longer whether sustainability should be considered in investment decisions, but how capital can most effectively support the transition towards a low-carbon and more resilient economy. According to international estimates, the annual financing gap for achieving climate and sustainable development goals amounts to around USD 4 trillion. Public budgets alone are insufficient to close this gap. Private capital, mobilised by asset managers and asset owners, will therefore be crucial.

To create real-world impact, investors need to act at several levels across the investment value chain.

Active ownership, or stewardship — including structured engagement with companies and the systematic exercise of voting rights — is one of the most powerful tools for influencing corporate behaviour. Engagement can help improve governance, climate strategies and the transformation of business models, while supporting long-term value creation. The Swiss Stewardship Code provides a common framework for strengthening this approach.

Another lever is the development of thematic and impact strategies that direct investment towards areas such as renewable energy, water management, the circular economy and sustainable infrastructure. These strategies combine financial performance with intentional environmental or social outcomes.

A third area with significant potential is the expansion of private-market investments. Directing capital towards areas such as infrastructure, private equity and private debt is particularly important for financing the transition of the real economy. Reducing barriers to access and broadening participation across different investor groups, including private investors, could significantly increase capital flows towards sustainable projects.

A fourth area is blended finance — the structuring and combination of public, philanthropic and private capital — which offers considerable potential, particularly in emerging markets where financing needs are greatest. However, existing structures remain too small and too complex to achieve meaningful scale. Governments and development institutions can play a key role by providing guarantees, concessional capital and risk-sharing mechanisms that make such investments more attractive to institutional investors.

Finally, the mandates of asset owners such as pension funds, insurers and foundations need to be strengthened. Asset owners ultimately determine how capital is allocated. Clear mandates, long-term investment horizons and investments anchored in transition or impact strategies are essential to enable asset managers to develop innovative solutions.

AMAS’s commitment: mobilising capital for transformation

Going forward, AMAS intends to strengthen Switzerland’s role as a sustainable finance hub around three priorities.

The first is to accelerate transition and impact finance by working with its members to develop strategies that channel capital towards companies, sectors and regions undergoing credible transformations.

The second is to strengthen collaboration across the ecosystem. Sustainable finance requires coordinated action between asset managers, asset owners, regulators and policymakers. AMAS engages with institutional investors to help catalyse capital flows and advocates for the removal of structural barriers — including tax-related obstacles — that hinder the growth of sustainable investment.

The third priority is to maintain a stable and competitive framework. A predictable, principles-based regulatory environment is essential for attracting capital and talent. AMAS therefore advocates proportionate regulation that is internationally compatible, alongside targeted incentives, particularly for blended finance and investment vehicles.

A strategic opportunity for Switzerland

Switzerland has major strengths — stability, financial expertise and public-private cooperation — that position it to remain at the forefront of sustainable finance. By combining environmental objectives with fiduciary discipline and financial performance, the Swiss financial centre can demonstrate that sustainability and returns can reinforce one another.

The momentum is already there: sustainable finance in Switzerland is entering a new phase. With continued commitment from the industry, public authorities and investors, Switzerland can establish itself as a leading global hub for sustainable asset management and make a decisive contribution to the economic transition.