The Swiss government has decided to hold off on new regulations for greenwashing and data exchange in the financial sector for the time being. The industry has been under pressure to act due to the threat of state regulations, and the Federal Council is closely monitoring developments in Brussels.
It’s not uncommon for state regulation to increase over time as life becomes more complex, foreign developments push Switzerland to adapt, and politicians turn to legal measures when faced with societal issues. However, it’s surprising when the government in Bern doesn’t push for regulations.
Recently, the Federal Council decided not to implement state regulations in two key areas of the Swiss financial sector: greenwashing and customer data ownership. In greenwashing, products are sold as sustainable or climate-friendly when they aren’t. The government had warned the industry to take action or face government intervention. It seems that this warning had an effect, as the industry has made progress in avoiding greenwashing by publishing self-regulations.
These self-regulations include guidelines for informing customers about product sustainability, gathering customer preferences, training employees, and conducting internal and external audits for compliance. While these guidelines are not binding for all members of the industry, further progress is needed to meet the goals defined in 2022.
In customer data ownership in the financial sector, Switzerland committed to promoting an open financial center where customer data would be made accessible to other providers at their request in 2022. Although there is no legal obligation for financial institutions in Switzerland to provide access to customer data, many institutions have signed a letter of intent to support multi-bank offerings.
The Federal Council will continue monitoring developments in both areas and assessing whether further regulations are necessary by 2027. EU regulations will also play a crucial role in future decision-making regarding these issues.