As you can see, the SNB is keen to deepen its understanding of the potential implications of climate risks for its work, and it is actively engaged at the international level to achieve this goal. Beyond its prerogatives with respect to monetary policy and financial stability, the SNB integrates its thinking on environmental sustainability into its operational activities. Environmental management at the SNB For many years now, the SNB has been fully meeting its sustainable development responsibilities in its day-to-day operations. Since 1996, the SNB has applied a systematic environmental management concept aimed at reducing its energy consumption. We publish annual reports detailing the environmental impact of our operational activities and the progress being made on this front. 9 Our strategy for reducing CO2 emissions is based on four pillars: first, avoid; second, reduce; third, replace existing solutions with cleaner energy sources; and, finally, offset. For the past eight years, the SNB’s operational activities have been carbon neutral. In other words, it offsets all unavoidable CO2 emissions by investing in a range of climate protection initiatives around the world, including wind farms, geothermal projects and photovoltaic plants. But the SNB’s commitment does not end there: we have also done pioneering work in introducing the first environmental impact assessment for banknotes. This work allows the SNB to assesses the environmental impact of a banknote over its entire life cycle, and it has inspired other central banks to do likewise.
On the other hand, the SNB employs ESG criteria in the management of its equity portfolio via a selective exclusion policy. Since 2013, it has refrained from acquiring shares in companies whose products or production methods seriously violate ethical principles – notably, firms that produce internationally condemned weapons, seriously violate fundamental human rights or systematically cause severe environmental damage. Such exclusions, which also apply to our corporate bond portfolio, enable the SNB to align its asset management with the fundamental values and norms of our country. How does the SNB go about identifying the companies to be excluded? It follows a clear and structured process, in which it draws on the knowledge of external experts. With respect to the environment and human rights, we regularly evaluate our investments in a two-step process. First, an expert consultancy collects all publicly available information and then draws up a warning list containing high-risk companies (i.e. companies that most likely meet our exclusion criteria). In a second step, another specialist firm evaluates these allegations in detail and prepares a full report for each high-risk company, accompanied by a recommendation. The final decision on whether or not to exclude a company is taken by the SNB. In addition, the SNB exercises its voting rights for a portion of the shares in its portfolio. It focuses on aspects relating to good governance. Good governance contributes to the positive development of a company, which ultimately improves the return on our investments.