Switzerland boasts arguably one of the most coherent ecosystems of green fintechs, affiliated financial institutions and academic partners worldwide, officially supported by the national regulator, the State Secretary for International Finance SIF.

GFN: a powerful network

The Green Fintech Network has grown from a small group of visionary sustainable finance leaders in 2023 to a vibrant network of over 50 members. The key membership consists of startups of various stages, predominantly dedicated to data-gathering and data-analysis, but also in the area of tech-enabled retail and institutional investor assistance. That is why GFN’s member base includes also numerous domestic and internationally leading incumbents, such as financial institutions and professional services firms (UBS, PostFinance, and EY), Switzerland’s exchange SIX Group, global data provider MSCI, and major academic institutions (University of Zurich, ZHAW, and IMD) which provide cutting-edge research, and build a pipeline for science-based spin-offs.

Regulatory developments in Switzerland

The regulator’s focus is on enhancing sustainability disclosures’ transparency and comparability. Presently only targeting large firms, compulsory reporting requirements will increasingly include a larger set of firms. Many SMEs are already required to collect sustainability information due to the trickle-down effect on the whole supply chains of larger firms. Additionally, reporting frameworks are being developed beyond climate and will include nature and biodiversity, just as social aspects. Switzerland aims to strengthen comparability through international platforms and open data, such as the Net Zero Data Public Utility (NZDPU). This presents a great opportunity for Green Fintechs to build technology- and data-enabled tools and solutions, as the focus will be on making primary data broadly accessible, not locking data behind paywalls. Many Swiss green fintechs thus offers data-driven and analytics solutions, benefitting from Switzerland’s world-leading academic institutions in disciplines like data science and AI. 

Compliance with EU regulation

Switzerland is greatly affected by evolving EU regulation, as many Swiss corporates are active in the EU market or are suppliers to larger EU corporates that require ESG data for their own reporting. This means the real number of Swiss companies that will have to collect and report sustainability data goes much beyond the 300 large companies, probably by a factor of 10. However, many Swiss SMEs affected do not dispose of the required know-how. There is tremendous scope for green fintechs to assist SMEs in their coming reporting tasks.

Tangible business cases

With the overall direction of the economy transition being clear, a vast space of business opportunities emerges, too. Disclosures and compliance have been the early drivers of the need for green fintech solutions. Now, immense investments are required for the renovation of building stock, industrial processes, agro-economy, and the technologies related sectors are leveraging. New ways of capturing related data, generating real-time insights, monitoring, and ultimately financing will emerge, many strongly tech-enabled. Therefore, some green fintech segments are reinventing and empowering the way the transition can be financed, whether institutionally or individually, whether with public or private money, connecting impact and return. 

– Author: Philippe Lionnet, Envoy for Sustainable Finance, State Secretariat for International Finance SIF

– This contribution is brought to you by Finance Swiss, a valued partner of Building Bridges 2024.