Geneva loses bid to host sustainable finance body

Geneva: nice lake, but no ISSB. Keystone / Salvatore Di Nolfi

Frankfurt has been chosen as the seat of a new sustainable finance reporting body announced at COP26 this week. Observers say Geneva was overlooked largely for political reasons.

The International Sustainability Standards Board (ISSB)External link, unveiled at COP on Wednesday, is tasked with coming up with a list of “baseline” global standards to help investors gauge the sustainability of companies.

Switzerland, an ambitious player in the area of sustainable finance, was keen to attract the ISSB headquarters to Geneva – an “ideal location” due to its independence, neutrality, and proximity to international organisations, the finance ministry said in August.

In the end, however, the German city of Frankfurt was chosen, a decision which according to the Le TempsExternal link newspaper was based on political pressure, notably by the European Union (EU), who didn’t want the body in non-member Switzerland.

The EU’s stance was entrenched by current bad relations with Switzerland after the shelving of discussions on an institutional agreement in May, the paper writes, citing several sources.

Geneva’s candidacy “made a strong impression at the highest level and we hoped to win, but when it emerged that the seat would go to an EU member which is also part of the G7, Geneva was out of the equation”, said banker Patrick Odier.

Switzerland nevertheless remains ambitious in the area of sustainable finance, a spokesperson for the Swiss State Secretariat for International Finance told Le Temps, echoing the comments of finance minister Ueli Maurer on Wednesday.

Indeed, over the past decade, sustainable investments in Switzerland have risen from CHF40.6 billion to CHF1.16 trillion ($42.7 billion to $1.2 trillion), leaping by 62% in 2019 alone, according to the Swiss Sustainable Investment Market Study 2020.

The ISSB will publish its first batch of global norms for climate-related company disclosures next year. Up to now, disclosure practices among companies have been largely voluntary and based on loosely-defined environmental, social, and governance (ESG) standards, Reuters writes.