Funds encourage humane, pro-environment investment

WWF Switzerland director Carol Franklin Keystone

The World Wide Fund for Nature Switzerland (WWF), which supports investment projects that work through sustainable development, has helped two investment funds run by the Swiss Cantonal Banks Association (Swissca).

To qualify for funding, companies must prove that their environmental and social policies are acceptable to the banks’ fund managers.

Investments in alcohol or tobacco can be turned away, and companies without effective trade union representation or equal opportunity policies for their staff may also face rejection.

Carol Franklin, head of the WWF Switzerland, told swissinfo at a Zurich-based conference promoting sustainable development that the WWF would “like to show that investment in sustainable firms and good performance go well together”.

“Sustainable” stocks, bonds

“We firmly believe that only sustainable firms will survive,” explained Franklin. “To that end we have set up, with Swissca, the Green Invest Stock Fund and the Prevista Pension Fund, which are both based on sustainable bonds and stocks.”

Figures can speak louder than words in this case, with around SFr2 billion ($1.25 billion) of Swiss institutional money already invested in sustainable funds. The state pension fund already earmarks two per cent of its investments for the same purpose.

Carol Franklin said that when they first set up the Green Invest Fund three years ago they weren’t certain of success, but in the end they have done much better than expected.

“At the beginning we weren’t quite sure what success we would have. Three years ago when we started the Swissca Green Invest Fund the banks said they thought SFr50 million would be the maximum it could attract, but now three years later, despite the difficulties on the stock exchange we’ve already accumulated SFr300 million. So it’s already 6 times more than expected.”

Investment trend

On a broader level Franklin believes that investing in companies that implement a sustainable development policy is becoming more widespread.

“If you look at what’s happening in the States, more than ten per cent of equity is invested in companies that have this sustainable filter,” added Franklin.

For example, the supporters of sustainable investment consider companies that run a fair social policy for employees will have a happier workforce and in the end a higher level of productivity.

“The companies who work on a sustainable basis must have a better performance as they look after the environment better and their employees better, so they must also do better,” expanded Franklin.

by Tom O’Brien