The Federal Council wants to strengthen the position of the Swiss financial center as a leading location for sustainable financial services. To this end, it has adopted a framework for the issuance of green federal bonds.
The Federal Council wants to strengthen the leading position of the Swiss financial center in the field of sustainable financial services. By issuing green federal bonds, it wants to promote the application of international standards on the Swiss capital market and encourage private sector players to issue their own green bonds. The Federal Council had taken this decision in principle at the end of 2021.
The funds raised with green bonds may only be allocated to expenditures that have a positive environmental impact. This includes, for example, the promotion of public transport, the preservation of biodiversity or the construction of environmentally friendly buildings.
Framework based on the 'Green Bond Principles
The framework adopted by thel Federal Council forms the basis for issuing green federal bonds in the future. It shows how the bonds will be integrated into the Confederation's sustainability strategy, which green expenditures from the federal budget can be allocated to the green federal bonds and how these expenditures will be reported on. In developing the framework, the Confederation was guided by the Green Bond Principles (GBP) of the International Capital Market Association, which are internationally regarded as the market standard. The framework was subjected to an external evaluation and certified.
Annual issuance volume to be a few hundred million
The analysis of the federal budget is based on the 2021 state accounts, and has identified green expenditures of around CHF 4.5 billion. These are mainly found in the areas of public transport, biodiversity, international cooperation and research. Since the available green expenditure exceeds the longer-term issuance volume of the Confederation, and at the same time conventional bonds will continue to be issued, only part of the green expenditure is allocated to green federal bonds. An issuance volume of several hundred million Swiss francs per year is targeted.
The new financing instrument enables the allocation to green expenditures that have already been approved by parliament. Green federal bonds do not have a direct environmental impact on their own: political decisions by parliament are required for concrete measures regarding climate and environmental protection.
First issuance planned for autumn 2022
The Federal Finance Administration (FFA) plans to issue the first green bond in autumn 2022. The exact specifications of the first issue (volume, maturity, and coupon) depend on the Confederation's financing needs and the prevailing market conditions at the time of the issue.
