Geneva: leading the way on sustainable finance

The Paris Agreement on Climate Change, the United Nations’ Agenda 2030 and the recently announced European Green Deal provide the basis for the international community to address the unprecedented social and environmental challenges of our time. It is vital that governments cooperate with the private sector to support these efforts. Redirecting capital flows is an important step along the path towards sustainability. Geneva plays a leading role in this new partnership between the public and private sector, as the city is able to lend its weight to the initiative in numerous ways.

Premier international hub

As the second headquarters of the United Nations, Geneva is a prominent international hub. It is home to a total of 28 international organisations, permanent missions representing 177 countries and 431 NGOs. It also hosts the international headquarters of the United Nations Environment Programme Finance Initiative (UNEP FI) which launched the UN Principles for Foreign Investment (UN PRI) in 2006, followed later by the UN Principles for Responsible Banking (UN PRB). Several other prestigious organisations such as the World Economic Forum (WEF), the World Business Council for Sustainable Development (WBCSD), the International Network of Financial Centres for Sustainability (FC4S) and the SDG Lab have also chosen Geneva as their home. In so doing, they help to generate numerous synergies around sustainability at the international level.

A dynamic, diversified financial centre

A top-class financial centre has evolved at the western end of Lake Geneva with no fewer than 92 banks, mainly active in private and institutional asset management, commercial banking and trade finance. The business model of the private banks, which have traditionally had a strong presence in Geneva, is sustainable by its very nature, as private bankers bear unlimited liability for their customers’ assets. They follow a long-term vision and the goal of ensuring assets are passed on to future generations. Also based in Geneva are the many service providers linked to the financial industry such as auditors, insurers and lawyers. Moreover, the city is home to two world-class centres of learning: University of Geneva and the Graduate Institute of International and Development Studies (IHEID).

In 1997 the Ethos Foundation was established in Geneva, a trailblazer in socially responsible investment currently representing 224 pension funds and charitable foundations. Geneva is also a global pioneer in the fields of impact investing and microfinance, partly thanks to synergies between the public and private sector reaching back to the 1990s. During that period, UN bodies such as the International Labour Organization (ILO) and the United Nations Conference on Trade and Development (UNCTAD) worked with various local private actors to develop the first impact funds. Out of this initiative came BlueOrchard (2001), Symbiotics (2005), Bamboo Capital Partners (2007) and various other leading providers.

Geneva is also a global pioneer in the fields of impact investing and microfinance

To create synergies in this unique ecosystem, a group of visionary specialists in Geneva established the association Sustainable Finance Geneva. Its mission is to position Geneva and Switzerland as a top financial centre for sustainable finance. Today, Calvin’s home city combines tradition with innovation – two aspects that are essential for harmonious development over the long term.

Building Bridges: a catalyst for change

This legacy and the common desire to build bridges between Geneva’s financial centre and international community encouraged banks – with the support of Geneva Financial Center, Swiss Sustainable Finance and Sustainable Finance Geneva – to organise the first Building Bridges Week in October 2019. With almost 1,000 participants, 31 events and 52 partners, the event was a big success. It has boosted efforts to position Geneva and ultimately Switzerland as a leading global centre for sustainable finance.

Preparations for the next Building Bridges Week are already underway: it will take place in November 2021 with the active participation of the Swiss Bankers Association. The construction of a Building Bridges Village will offer an even better platform for participants to share thoughts and experiences. A new initiative, the Building Bridges Community, will also help to sustain momentum over the course of the year. This year’s event provides the opportunity to extend the reach of Building Bridges and examine leadership issues in both the real economy and NGOs. It also offers the chance to generate more synergy effects by exploring every avenue for mutual support between Geneva and Zurich’s financial centres.

A trio of threats – the current health crisis, erosion of biodiversity and climate change – have highlighted the systemic nature of the challenges we face and the need for coordinated solutions. Building Bridges wants to assemble all actors around the table and turn words into action.