The Ethos Foundation and its Climate Transition Ratings methodology have been awarded the Ethics in Finance Award 2024. This prize, conferred by the University of Neuchâtel, recognises an innovative and forward-looking methodology that enables institutional investors to assess the extent to which a company contributes to climate change.
The Ethos Foundation and its ‘Climate Transition Ratings’ methodology, which measures the climate impact of companies, are the winners of the 2024 Ethics in Finance Award. Launched in 2023 by the Institute of Financial Analysis (IAF) of the University of Neuchâtel (UniNE), this honorary award recognises each year the ‘best practices of organisations active in the financial markets’. The Ethos Foundation succeeds Alternative Bank Switzerland, which was awarded the first award in 2023.
“‘It is interesting to note that, despite the urgency of the problem, there is currently no internationally recognised standard for measuring a company's efforts to address climate change, nor is there a forward-looking standard. This is what the Ethos Foundation has corrected”, points out the jury chaired by Professor Eelco Fiole in a press release. “As such and without hesitation, Ethos‘ methodology is an exemplary practice that deserves attention and widespread monitoring in Switzerland, Liechtenstein and beyond.”
“We are very pleased to receive this distinction, which rewards the hard work and strong conviction of the Ethos teams, in particular its analysts but also its IT team, in developing an innovative methodology that makes it possible to respond to one of the major challenges of our century”, says Vincent Kaufmann, CEO of the Ethos Foundation. “We now hope that the financial industry as a whole will play its part in the future and contribute to the fight against global warming.”
Since its creation in 1997, the Ethos Foundation has endeavoured to develop innovative services to help and support Swiss pension funds to invest in a sustainable and responsible manner. The Ethos teams have worked hard over several months to develop a methodology to measure the tangible progress made by companies in limiting their climate impact and aligning their activities with the objectives of the Paris Agreement. While more and more companies are committing to reduce their greenhouse gas emissions, it is still necessary to be able to ensure that these commitments are reliable.
This is precisely one of the objectives of the Ethos Climate Transition Ratings: to determine the climate impact of companies by assessing the credibility of their climate strategies. To this end, Ethos' methodology takes into account the extent to which past targets have been met, the carbon budget available and the company's use of carbon sinks to offset emissions and meet targets (a practice considered less credible than simply reducing emissions).
Recognising and promoting exemplary, substantial and sustainable practices
While poor ethical behaviour in the world of finance is often highlighted and reported in the media, this is less the case for ‘exemplary’ commitment. With the creation of the Ethics in Finance Award, its initiators Eelco Fiole, Tim Kroencke and Florian Weigert, all professors at the IAF, aimed not only to distinguish such behaviour, but also to promote these practices. “The award supports efforts to make Switzerland an even more important player in international sustainable finance.”
Applications are open to all financial market players domiciled in Switzerland or Liechtenstein, whose activities range from asset management to financial consulting. A jury made up of academics and professionals from the private sector selects the entries that best exemplify ethical and sustainable behaviour.
It should also be noted that this year the jury also paid tribute to Dominique Biedermann, founder, former director and then chairman of the Ethos Foundation and former assistant professor of corporate social responsibility and governance at UniNE, who recently retired from the faculty.
