Switzerland Country Report
The Swiss team for the UNEP Inquiry brought together representatives of the financial sector, NGOs, academia and policy makers to reflect on the Inquiry’s questions regarding a financial system aligned to sustainable development.
They highlighted three main problems that inhibit the financial system from providing stronger support for a more sustainable economy: the failure of prices to reflect true costs, the disconnect between long-term impacts and short-term decisions, and the instability of the financial system. They called for four principles govern the transition towards a sustainable financial system: the establishment of a financial system that serves the needs of the real economy, the valuation of true costs, the application of the precautionary principle of ‘doing no harm’ when transacting on financial markets, and the adoption of a rule of law involving simple but effective regulation. While these pre-conditions are generic, they highlighted more specific recommendations for action in Switzerland:
- Align the economic, legal and political frameworks to mobilise the supply of funds to meet the demand of sustainable investments. This includes review fiscal incentives and taxes and strenghtening of transparency requirements.
- Establish a common understanding of the terminology and criteria for financial relevant and comparable data.
- To ensure applicability, regulation should be simple, clear, limited in size and focused on key problems and their resolution. Unless regulation is based on generally accepted standards and predictable patterns, uncertainty among market participants may discourage them from committing to long-term investments.
- A shift in business, economics and finance education is needed to to provide knowledge and build competencies amongst consumers, investors and financial analysts.