Within two decades the tech industry in the US has outperformed all financial markets by 30% annualised.
Initially seen simply as a trend, these technological innovations ended up altering the very structure of our lives and consumption habits, and have become a secular growth driver. “The Swiss equity market has low exposure to carbon-intensive sectors like travel, automotive and energy, whereas it has high exposure to sectors with above-average ESG scores, such as healthcare.” And it will be all the more convincing for its genuine belief that companies with strong sustainability credentials or positive impact objectives have greater long-term value-creation potential than those that are resistant to change.Ī compelling parallel can be drawn with the technology sector: the surge of new technologies in the 1990s deeply disrupted not only companies but entire sectors, culminating in what was dubbed at the time the “new economy”. A bank intent on participating in the transition will have a natural inclination to promote the sustainable nature of its investment solutions to its clients. It must now be treated as a new dimension and an integral part of the investment process. The age of seeing sustainability as an investment theme like any other is past. In short, the finance sector can make a strong contribution to the environmental movement and speed it up, provided it delivers firm performances. But the key for asset managers is not in how green they make themselves look but rather in how successfully they preserve their clients’ capital and create long-term value, which, let us not forget, is the prime mission of a private bank. Parallels with the tech sectorĬarried along by this trend, market players have made grand commitments to prove their ability to think, act and invest sustainably. The overall volume of sustainable investments in this country, which was lingering below CHF 80 billion in 2014, had shot up to CHF 1,520 billion by 2020, and the rise should continue at a steady pace. In Switzerland, that category is now dominant on the investment fund market, accounting for 52% of assets under management, according to Swiss Sustainable Finance (SSF).