The results of the climate compatibility test organised by the Federal Office for the Environment (FOEN) in collaboration with the non-governmental organisation (NGO) 2° Investing Initiative were published on 23 October 2017. They show that pension funds are not yet aligned with the target of keeping global warming below 2° as set by the Paris Agreement on December 2015 and of which Switzerland is also a signatory. Ethos also submitted its funds to the test to check their compatibility. According to this assessment, the Ethos funds are compatible with the 2° scenario.
The study organised by the FOEN measures the alignment of investor portfolios with the 2° scenarios of the International Energy Agency (IEA). More precisely, the exposition of the stock and bond portfolios of investors to the sectors with the highest greenhouse gas emissions was measured and compared to a 2°C compatible model portfolio. The Swiss pension funds and insurers thus have the chance to measure the alignment of their portfolios free of cost.
Swiss pension funds still very exposed to fossil fuels
79 institutional investors (pension funds and insurers) took part in the study. On the basis of aggregated information, the FOEN published a study which shows that in general, Swiss pension funds maintain a significant exposure to fossil fuels. In particular, the percentage of investments in coal-fired power greatly exceeds the 2°C scenario. The study presents different courses of action to allow pension funds to improve their exposition and take concrete steps.
In the context of its activities, Ethos proposes different services to help investors improve their portfolios:
- 2°C compatible sustainable investment funds
- Exercise of voting rights in Switzerland and abroad
- Dialog programmes (engagement) with Swiss and foreign companies
- Portfolio analysis including measuring the exposition to sensitive sectors such as coal and other fossil fuels
Ethos’ funds are compatible with the 2°C scenario
Ethos also publishes the aggregated assessment of the whole of its investment funds carried out by the NGO 2° Investing Initiative. The analysis shows that Ethos’ funds are perfectly aligned with the target of keeping global warming below 2 degrees. Ethos has been dedicated since many years to reducing the environmental impact of its investment funds. In particular, Ethos excludes companies active in coal extraction or coal-fired power plants. Furthermore, in order to reduce the environmental footprint of its funds, Ethos has developed, in addition to its environmental, social and corporate governance analysis (ESG rating), a carbon rating which minimizes the exposure to the biggest emitters of greenhouse gases. As a signatory of the Montréal Carbon Pledge, Ethos also publishes the carbon footprint of its investment funds.
Since early 2017, the Ethos funds are open to all investor categories.
FOEN study on investor alignment with the 2° target (summary in French)
FOEN study on investor alignment with the 2° target (summary in German)
Climate compatibility test of the Ethos stock portfolio (in French)
Carbon footprint of the Ethos funds (September 2017 - in French)
Carbon footprint of the Ethos funds (September 2017 - in German)
