Climate change is a big threat. I cannot remember the last time I went more than a day without receiving some sort of press communications focusing on the environment and firms’ attempts to become more sustainable.
However, at least from the outside, it appears firms are largely doing this in isolation. While the solutions and pledges may seem similar, wealth managers are eager to claim ownership and prove their offerings are better than those of their competitors.
Should something that is designed to benefit the whole planet and its population be used as a differentiator? If just one firm gets it right, it will not be enough.
Competitive advantage is imperative to wealth managers – like it is to any business. However, there are so many other factors that clients consider when it comes to choosing who they want to entrust their money to.
Some firms proved more successful than others long before ESG and climate change came onto the radar in any meaningful way.
On issues like climate change, industry-wide collaboration has the potential to cause genuine and significant change.
Of course, regulators have a part to play in this. Industry standards will help align firms and encourage them to apply similar metrics and definitions, helping clients gain a clearer picture and – hopefully – leading to meaningful climate action.
Switzerland appears to be ahead of the curb in this regard so far.
The Swiss Federal Council has recently launched a set of climate scores in a bid to position itself as an international leader in terms of credible climate transparency.
The Swiss Climate Scores aim to provide Swiss institutional and private investors with comparable and meaningful information on the extent to which their financial investments are compatible with international climate goals.
While voluntary for now, these are designed to help bring the industry closer together and give clients clear and meaningful information about firm’s climate action.
We cannot beat climate change or achieve net zero alone, either as individuals or firms. The only way we will overcome these very real threats is by coming together and sharing expertise, ideas and resources.
