8.1 Current Landscape for International Investors
Sustainability is no longer considered a mere “nice-to-have” or a marketing exercise. Rather, it has become an integral part of risk/opportunity considerations and corporate strategies. Investors want to know how companies add value over the long term and how environmental, social, and governance (ESG) factors influence a company’s financials. This “financial materiality” perspective also forms part of some sustainability reporting requirements and standards, such as the European Corporate Sustainability Reporting Directive (CSRD) and the related European Sustainability Reporting Standards (ESRS).
Since 2025, sustainable investments in Switzerland have seen massive growth, reaching a volume of almost CHF 2,000 billion by the end of 2021. The decrease to around CHF 1,600 billion in 2022 is primarily attributable to market developments. Since then, the volume has nearly returned to its previous level. It grew by 3% year on year in 2025, but lagged behind the broader financial market, which expanded by 7%. The 2026 SSF Market Study identifies three reasons for this:1
Sector allocation: Sustainable portfolios were typically underweight in defence stocks, which performed particularly strongly, while having greater exposure to real estate. Although real estate investments were more stable, they delivered lower returns than equity markets.
International outflows: In 2025, sustainable funds recorded global net outflows for the first time. As many sustainable investment products managed in Switzerland are distributed internationally, these outflows also weighed on the development of Swiss investment volumes.
Market maturity: Sustainable investing now accounts for approximately 50% of the Swiss fund market. Following several years of exceptionally strong growth, the market is approaching a more mature phase, in which volume growth is likely to track the broader market more closely.
Development of sustainable investments in Switzerland1
in CHF billion
Since the Asset Management Association Switzerland (AMAS) first published its self-regulation on transparency and disclosure for sustainability-related collective assets on 26 September 2022, the requirements for investment products marketed as “sustainable” in Switzerland have evolved considerably. Version 2.2, effective since September 2025, sets a significantly higher standard: at least 70% of a sustainable collective investment scheme’s assets, excluding cash and derivatives, must either be aligned with specific sustainability objectives or actively contribute to achieving them. Exclusions, ESG integration and the exercise of voting rights, whether used separately or in combination, are no longer sufficient on their own for a product to qualify as sustainable. The tighter requirements are prompting providers to take a more cautious approach to the naming and marketing of sustainable investments. For investors, credible ESG offerings and effective greenwashing prevention depend on sustainability criteria being clearly documented, verifiable and easy to understand in reports, on websites and in prospectuses.1
Development of sustainable investments in Switzerland1
In % of sustainability-related AuM in CHF (n=73)
Exclusions remain the most widely used sustainable investment approach in Switzerland. This involves removing securities considered unsustainable, such as those issued by companies in the tobacco and weapons industries, from the investment universe. The integration of ESG risks and opportunities into financial analysis has returned to second place, followed by ESG engagement, through which shareholders seek to encourage management to give greater consideration to sustainability criteria, and ESG voting. From a thematic perspective, climate-focused investments continue to lead, while impact investing remains a niche. As a result, its contribution to closing the annual USD 4 trillion SDG financing gap estimated by the United Nations remains limited. However, pursuing impact does not necessarily require investors to compromise on financial returns. A survey of asset managers and asset owners indicates a general expectation that impact investments should deliver at least comparable risk-adjusted returns to conventional investments.1
Expected risk-adjusted financial return compared to market rate for asset managers and asset owners1
In % of respondents (n=73)
Climate-, nature- and transition-related risks are generally incorporated into ESG considerations as part of investment processes. Extreme weather events are most frequently identified as the most significant nature-related financial risk, followed by water scarcity. At the same time, new investment opportunities are emerging in areas such as renewable energy, resource efficiency, climate resilience and sustainable infrastructure. Artificial intelligence is also playing an increasingly important role in the investment process, supporting activities such as screening, research, evaluation, risk analysis and ESG ratings. However, its use also raises challenges relating to data quality and reliability, as well as integration with existing systems.1
Internationally, sustainable and responsible investment has evolved from a niche practice into a more systemic consideration, according to the Global Sustainable Investment Alliance (GSIA). At the same time, the market environment is increasingly shaped by geopolitical tensions, diverging regulatory developments and political controversy surrounding ESG. Europe continues to focus on transparency and sustainability regulation, while its Omnibus simplification initiatives seek to reduce administrative burdens and strengthen competitiveness. In the United States, ESG has become increasingly contested in the political arena. Meanwhile, climate-related disclosures and sustainability reporting continue to gain momentum across many Asia-Pacific markets. Against this backdrop, many financial institutions have adopted a more cautious approach to communicating their sustainability ambitions. This does not necessarily signal a fundamental retreat from incorporating sustainability considerations into investment processes. Rather, the focus is shifting towards economic resilience, energy and supply security, decarbonization, and the financing of infrastructure and technological transformation. Reliable and internationally comparable sustainability information remains essential to directing capital efficiently towards companies and projects that create long-term value and support the transition to a more resilient economy.2