The investment portfolio of the Swiss National Bank and its carbon footprint

ABSTRACT

This paper details the nature of the equity holdings of the Swiss National Bank (SNB) and estimates its carbon footprint. By analysing SNB holdings in the 100 most polluting companies in the world, I find that the share of assets owned by the SNB is responsible for at least a quarter of Switzerland’s domestic CO₂ emissions. This represents as much as the greenhouse gas emissions of all Swiss households combined or 0.05% of global greenhouse gas emissions. Using two different estimation methods, I find that the SNB’s portfolio generates between 12 and 20 million metric tons of CO₂ per year. This could be reduced by 99.7% with an investment reallocation of just 2% of the equity portfolio of the SNB.

KEYWORDS:

• Carbon emissions
• financial pollution
• asset management
• Swiss National Bank

JEL CLASSIFICATION:

• E50
• Q28
• Q38
• G11

Acknowledgments

I thank Gaurav Gandhi for excellent research assistance. For comments and discussions, I am grateful to Sam Foxall, Ritika Goel, Cécile Hediger, Richard Heede, Simon Hinrichsen, Jens van’t Klooster, Yasmin Shearmur, Dóra Simon, and participants to the Berkeley research Fika.

Disclosure statement

No potential conflict of interest was reported by the author.

Notes

¹ The figure of 71% is from Griffin (2017) for all global industrial GHG emissions from 1988-2015 and excludes non-energy methane, nitrous oxide, land use and deforestation.

² Bank (2015).

³ For a more detailed overview of the methodology and its limitations, see Naef (2020).

⁴ https://www.globalcarbonproject.org/carbonbudget/19/files/Norway_CICERO_GCB2019.pdf.

⁵ https://www.bfs.admin.ch/bfs/fr/home/statistiques/themes-transversaux/mesure-bien-etre/tous-indicateurs/environnement/emissions-gaz-effet-serre.assetdetail.10027928.html.

Additional information

Funding

This research was supported by the Swiss National Science Foundation [P2SKP1_181320].