Advice to customers on climate-friendly investments from and green products offered by Swiss banks are not up to the mark despite the industry's professed intention to play a significant role in combating climate change, Greenpeace says.

A Greenpeace «mystery shopper» test at 19 Swiss banks on climate-friendly investments concluded that the quality of advice was poor and the recommended products were only marginally more climate-friendly than conventional ones, the environmentalist organization said late Tuesday.

In the test, 33 Greenpeace members pretended to be customers interested in investments compatible with the Paris Agreement on climate change.

The «mystery shoppers» held a total of 43 discussions with advisors from the banks tested. They discussed investments of 5,000, 10,000 or 50,000 Swiss francs ($54,641) for ten years.

Rhetoric, Reality Jar

The study said that the test clearly demonstrated that investing in a manner compatible with the Paris Agreement is currently almost impossible.

«This conclusion is in stark contrast to the professed goal of the Swiss financial center to be a leader in sustainable finance,» project manager for climate and finance at Greenpeace Switzerland, Peter Haberstich, said.

«Financial institutions are currently contributing barely anything to making the real economy climate-friendly with their so-called sustainable capital investments, even though the Paris Agreement has long called for all financial flows to be climate-friendly.»

What is the financial industry actually doing?

This study’s conclusion is not new in itself. In a recent study, Greenpeace also found that sustainable investments were no more successful in directing significantly more capital into a sustainable economy than conventional funds.

Former Blackrock sustainability chief investment officer Tariq Fancy said something similar in an essay. With the boom in ESG (environmental, social, governance) banking products, so-called «greenwashing» has emerged, i.e. products labeled ESG which are no more sustainable than conventional products. U.S. regulator the Securities and Exchange Commission launched an investigation into German fund provider DWS, owned by Deutsche Bank, after it was accused of «greenwashing» by its former head of sustainability.

Products Fail Test

Greenpeace does not mention the term «greenwashing» in the study, but the «mystery shoppers» showed that there was a huge gap between the banks’ promises in glossy advertising campaigns and the reality.

The 19 banks were only able to offer a total of ten products that were specifically designed to be climate-friendly. In a later analysis. Greenpeace said it was unable to these products were compatible with the Paris Agreement.

It said the products did not pursue a reduction in the greenhouse gas intensity of the companies included, which is compatible with the goal of a maximum global warming of 1.5 degrees Celsius.

The environmentalist organization even accused UBS and Credit Suisse of «misleading» advertising.

The «UBS Vitainvest» fund promises to help reduce CO2 emissions. Emission-intensive companies are effectively underweighted in the fund, but this does not result in any real reduction in emissions, Greenpeace said.

Too Vague

The «Credit Suisse Responsible Consumer Fund B» defines its sustainability criteria so vaguely that all a company has to do is to be aware of its impact on the environment to be included in the fund, Greenpeace said. It added that the fund promised outcomes, which existing data showed were not deliverable.

  • The «mystery shoppers» visited the Aargau Cantonal Bank, Alternative Bank Switzerland (ABS), Bank Avera, Bank BSU, Bank Cler, the Basel Countryside Cantonal Bank, the Basel Cantonal Bank, Bernese Cantonal Bank, Credit Suisse, Graubünden Cantonal Bank, Migros Bank, Postfinance, Raiffeisen, the Thurgau Cantonal Bank, UBS, the Uri Cantonal Bank, Valiant Bank, VZ Vermögenszentrum, and the Zurich Cantonal Bank.