Preventing greenwashing in the Swiss financial sector: latest developments

Greenwashing is seen, both in Switzerland and abroad, as a major risk to the implementation of effective sustainability policies. Efforts to combat greenwashing are therefore intensifying. Among the most recent developments occurred in Switzerland, this paper covers the Federal Council’s decision of October 2023 to regulate by ordinance its strategy for combating greenwashing and the guideline published last December by the Swiss Commission for Fair Trading on green marketing.


  1. A few reminders

This first section provides a brief overview of the notion of greenwashing in Swiss law/self-regulation and the measures in force to prevent the risk of greenwashing in the financial sector.


a. What is greenwashing?

To date, the notion of greenwashing has not been defined in law or in the self-regulations issued by the Swiss Banking Association (SBA)[1] or the Asset Management Association Switzerland (AMAS).

However, some scattered attempts at definition can be found. In particular, the Swiss Financial Market Supervisory Authority (FINMA) refers to greenwashing as practices that have, intentionally or unintentionally, the effect of misled investors and clients about the sustainable characteristics of financial products and services.[2]

As for the Federal Council, it considers that greenwashing occurs in the financial sector when, for example, a financial instrument or service is portrayed as having sustainable characteristics or pursuing sustainability goals, and this portrayal does not adequately reflect reality.[3]

In the context of financial products and services, defining greenwashing raises a preliminary question that needs to be answered: what is a sustainable investment? Yet, the notion of “sustainable investment” remains vague under Swiss regulations.

As it stands, only the AMAS Self-Regulation on transparency and disclosure outlines a definition of what is meant by sustainable investment: an investment is considered sustainable if it has a link with sustainability. Such a link exists if the investment is described or positioned as sustainable with reference to the ESG approaches described in the Self-Regulation (e.g., thematic investment, stewardship, climate-alignment).


b. What measures are in place in Switzerland to combat greenwashing?

The measures adopted to date to prevent greenwashing are essentially self-regulatory. The AMAS Self-Regulation[4]and the SBA Guidelines on ESG Preferences[5] aim, among other things, to combat greenwashing by creating greater transparency at the level of the financial institution and with regards to product characteristics (AMAS Self-Regulation), as well as at the level of information communicated to the customer (point of sale) (SBA Guidelines).

These measures are based on a strategy of transparency. The approach is to set up a system where clients can access reliable information, enabling them to compare products and make informed investment decisions. However, these self-regulations are only binding on SBA and, respectively, AMAS members.



  1. Gaps in current self-regulation

In its position of December 16, 2022, the Federal Council noted that the responses provided by self-regulation were not sufficient. In particular, it advocates the introduction of a uniform framework applicable to all financial products and services. The goal is to move away from the fragmented approach that prevails today.

The key elements of the proposed new regulation are the following:

  • Common classification to clarify what constitutes a sustainable financial product or service
  • Description of the sustainability approaches applied, in the form of information that is easily accessible to the public, transparent, and comparable
  • Accountability for the chosen sustainability objective(s), so that the alignment between the stated objectives and their implementation can be assessed
  • Verification by an independent third party (auditor) of the transparency principles applied by the financial institution
  • Binding nature of the new anti-greenwashing regulations, effective implementation of its obligations and legal recourse for clients in the event of non-compliance.



  1. Latest developments


a. Moving closer toward binding regulation in the financial sector

Following its position of December 2022, the Federal Council decided on October 25, 2023 that the measures it advocates to combat greenwashing in the financial sector should be regulated by ordinance.

The Federal Department of Finance (FDF) has until the end of August 2024 to draw up a draft ordinance. However, the option of countering greenwashing through self-regulation by industry associations has not been entirely ruled out. The Swiss government will refrain from intervening if the industry associations submit a proposal for a self-regulatory framework that achieves the same objectives as those supported by the Federal Council.

Given that the key elements described in the position of December 2022 include the establishment of legal remedies for clients, it seems unlikely that a solution based on self-regulation alone will be sufficient. State legal means cannot be introduced through self-regulation, which is private in nature. Moreover, self-regulation can only be binding on the members of the organization that issued it (unless such self-regulation is recognized by FINMA as a minimum industry standard, and is therefore binding on all players in the industry).

However, it would seem appropriate for the ordinance to be supplemented by self-regulation, which would specify the details of the obligations on greenwashing and their implementation.


b. Advertising guidelines with reference to the environment

On December 19, 2023, the Swiss Commission for Fair Trading published a new Guideline about advertising using the environment or climate claims.[6]

The Swiss Commission for Fairness is a private body set up in 1966 by the communications industry to monitor advertising and prevent unfair advertising practices within the meaning of the Federal Act on Unfair Competition (UCA).

As an independent private-law body, this Commission is not vested with public authority, and is therefore not empowered to impose sanctions or measures under the UCA. Nevertheless, it is possible to lodge a complaint with the Swiss Commission for Fairness concerning advertising which the complainant (e.g., consumers, clients or competitors) considers to be unfair pursuant to Article 3 UCA. Once the complaint has been examined, the Commission renders a decision and, if the complaint is upheld, issues recommendations to ensure that the unfair practice ceases.

The new Guideline reiterates the fundamental principles of advertising under Swiss law, namely the principles of truthfulness and clarity. In particular, the Guideline specifies what a bona fide consumer/ client is entitled to expect when indications such as “sustainable”, “environmentally friendly”, “CO2 neutral” or “climate neutral” are used in an advertising context.

Although this Guideline is not specifically aimed at financial institutions, nor is it binding, it does serve as a reminder that greenwashing is a form of misleading advertising that is already subject to the provisions of the UCA. The information and clarifications contained in this Guideline could serve as inspiration for courts when examining the merits of a claim against green marketing.

Similarly, the principles developed by the Swiss Commission for Fairness may provide financial institutions with useful guidance when they design their marketing practices for sustainable products.




Other topics and recent developments to be tuned in:


·      First update of the Swiss Climate Scores[7]: The “Swiss Climate Scores” rating tool, launched in June 2022, was partially updated on December 8, 2023 to make it easier for financial institutions and investors to use. The Swiss Climate Scores remain however non-binding.

·      Draft of the new FINMA Circular on nature-related financial risks[8]: FINMA launched a public consultation procedure regarding its new Circular on nature-related financial risks on February 1, 2024. The procedure will run until March 31, 2024. The new Circular is scheduled to come into force in January 2025.

·      ESG reporting[9]: Companies subject to extra-financial reporting obligations under Articles 964a et seq. of the Swiss Code of Obligations will be required to publish their first ESG report this year.



Your contacts at OBERSON ABELS SA


Antoine Amiguet

T +41 58 258 88 88

Philipp Fischer

T +41 58 258 88 88

Sonia De la Fuente

T +41 58 258 88 88



[1]     See, however, the three aspects of greenwashing described by the SBA on its website:

[2]     FINMA Guidance 05/2021 “Preventing and combating greenwashing”, 3 November 2021, p. 2.

[3]     The Federal Council’s position on the prevention of greenwashing in the financial sector, 16 December 2022, p. 1.

[4]     Self-regulation on transparency and disclosure for sustainability-related collective assets, as of 1st November 2023.

[5]   Guidelines for the financial service providers on the integration of ESG-preferences and ESG risks into investment advice and portfolio management, October 2023.

[6]     The Guideline (in French and German) is available here.

[7]     See press release: Federal Council decides on further development of Swiss Climate Scores, 8 December 2023.

[8]     See press release: Nature-related financial risks: FINMA launches consultation on new circular, 1st February 2024.

[9]     See Increased transparency in the context of non-financial reporting duties (Part II), Newsletter The Bridge, March 2022.


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