Our response to current challenges

Challenge: The changing behavior of clients – especially digitally savvy individuals – and a significant increase in the number of smartphone banks and other fintech firms entering the financial sector are creating challenges for long-established financial institutions. How is Credit Suisse adapting to these changes to ensure it remains an attractive financial partner for clients across all age groups?

Response: At Credit Suisse, we recognize that advancing digitalization and the widespread use of smartphone technology have fundamentally altered client expectations and behavior in many areas of daily life – from the way people purchase goods and access information to their interaction with service providers, including banks.

In response to these changes, we are implementing a number of digital, client-centric initiatives across different areas in order to expand our range of digital products and services along the client lifecycle and adapt the way we deliver them to clients. For example, in Switzerland we launched our new Direct Banking business area within the Swiss Universal Bank in August 2019. Direct Banking focuses on retail and small commercial clients who mainly use core banking products and services. Our aim is to provide a digital, needs-oriented offering that gives them even faster and easier access to banking services – at any time, in any place – combined with access to personal advice.

As a bank for the digital age, we make substantial investments in creating digital solutions for areas with a strong advisory focus to meet the needs of wealthy clients, entrepreneurs, companies and institutional clients. In Switzerland, Credit Suisse has a dedicated Digitalization & Products business area that is responsible for the design, development and implementation of the bank's digital offering across all client segments.

Importantly, we continue to offer a range of personal touchpoints, from telephone advisory to personal advice in our regional branch network. By optimally combining new digital solutions with personal advice, we want to ensure Credit Suisse's continued attractiveness as a banking partner in the future, allowing our clients to interact with us via their preferred channels.

Challenge: International human rights frameworks primarily address states and state institutions. However, the role of businesses in respecting human rights continues to be discussed on a national and international level. The UN Guiding Principles on Business and Human Rights are an important point of reference in this area and marked a milestone in the clarification of corporate responsibility for human rights when they were introduced in 2011. What is Credit Suisse's approach to potential human rights issues in its business activities and client relationships?

Response: We strive to assume our responsibilities in the area of human rights in accordance with the International Bill of Human Rights and the eight fundamental conventions of the International Labour Organization. We are a participant in the UN Global Compact and an active member of the Thun Group that focuses on the integration of the UN Guiding Principles on Business and Human Rights into the policies and practices of banking institutions. Our Statement on Human Rights describes the basis of our responsibility to respect human rights and the approaches and processes we use to address this responsibility. Equally, we expect our business partners to recognize and uphold human rights, as stated in our Supplier Code of Conduct.

Credit Suisse's most direct link to human rights issues is in our working relationship with our employees, and this is consequently the area in which we can exercise the greatest influence. In addition, the provision of certain financial services may be linked to negative human rights impacts. While companies operating in sensitive sectors frequently play a key economic role in the global supply of energy and commodities and as an employer, the activities of these companies can, in some cases, have a significant impact on local or indigenous communities. Credit Suisse therefore examines aspects of client relationships or transactions that are sensitive from a human rights perspective using our Reputational Risk Review Process. This process is supported by sector policies and guidelines that include aspects such as the protection of the health and safety of company employees and surrounding communities as well as a commitment to respect the human rights of local populations.

In 2019, Credit Suisse and the Society for Threatened Peoples (STP) concluded a mediation process facilitated by the National Contact Point of Switzerland (Swiss NCP) for the OECD Guidelines for Multinational Enterprises, which was focused on due diligence and the rights of indigenous peoples. As a result, we updated our policies on oil and gas, mining and forestry and agribusiness by including the concept of Free, Prior and Informed Consent (FPIC) with respect to project-related transactions as part of our expectations towards our clients. Also, Credit Suisse played an active role in the update of the Equator Principles, where new commitments have been made in relation to human rights and indigenous peoples, among other areas.

Challenge: There is a clear need to access new sources of energy, raw materials, and clean technologies to make more balanced and sustainable use of the world's natural resources. Investments that support environmentally sustainable development – a sector known as green finance – are thus growing in importance and scale. How does Credit Suisse contribute to green finance?

Response: Our green finance solutions cover a wide range of asset classes and are designed to support the transition to a low-carbon and climate-resilient economy, drawing on the expertise of various specialist departments. Our offering in the area of wealth management, for example, comprises a number of funds focused on sustainability, green bond investments and sustainable real estate as well as products and services in conservation finance. In investment banking, we provide advice for buyside and sellside clients in mergers and acquisitions, project and corporate finance, as well as debt and equity underwriting of public offerings and private placements. Credit Suisse actively supports clean and renewable energy businesses and, by the end of 2019, had been involved in over 130 transactions in this field with a value of more than USD 100 billion since 2010. We also supported clients on a number of green bond issuances in 2019. In our Global Markets division, Credit Suisse's HOLT offers a product allowing investors to quantify the impact of natural resource usage on the economic performance of companies. Credit Suisse Global Real Estate has a proactive strategy to significantly reduce energy use and related carbon emissions through a partnership with Siemens Switzerland AG. Finally, Credit Suisse Energy Infrastructure Partners, an investment manager specialized in investments in the European energy sector, focuses on direct investments in the capital-intensive elements of the value chain, such as energy transmission, generation, storage and efficiency.

Challenge: How does Credit Suisse contribute to the public conversation about economic, social and political topics and trends?

Response: Leveraging our in-house research capabilities and working with independent research institutions, we produce a broad spectrum of publications, reports, analyses and specialist articles on economic and socio-political topics. One example is the Global Wealth Report published by the Credit Suisse Research Institute, which provides comprehensive information on the development of global household wealth each year – attracting a high level of interest in the media and among diverse external stakeholders.

To keep our finger on the pulse of public opinion, we also produce a suite of 'Barometers' in collaboration with an independent research institute that are based on representative surveys conducted in our home market of Switzerland and/or in selected countries around the globe. For example, the Credit Suisse Worry Barometer provides an insight into the main concerns of the Swiss population and gauges voters' views on current political and economic issues. In 2019, the survey found that retirement provision is the greatest concern for the Swiss electorate, followed by health care/health insurance. Published annually since 1976, the Worry Barometer also reveals interesting changes in public attitudes over time. The survey is widely recognized as making an important contribution to the public conversation about socio-economic issues in Switzerland. The survey findings are discussed with thought leaders, key public figures and political exponents at various events and platforms and are regularly referenced in public discussions.

In 2019, we also conducted our second Progress Barometer – this time with an international focus – to measure the desire for progress among voters in 16 nations – focusing on economic, social and political themes ranging from e-mobility to work/life balance to development aid. The study, published at the start of 2020, revealed a negative correlation between the pressure for progress in a country and its degree of economic development. It also demonstrated that sustainability and equality are two issues where the desire for progress transcends borders. Meanwhile, the Credit Suisse Youth Barometer captures the views of young people across different regions of the world – providing the public with a valuable understanding of the lifestyle, problems and attitudes of the next generation.

Challenge: The challenges and pressures facing young people are steadily growing in today's rapidly changing world. What contribution does Credit Suisse make through its social commitments to help young people embrace change and prepare for the world of tomorrow?

Response: In 2019, we conducted a broad review of our Corporate Citizenship strategy to ensure our commitment continues to address the most pressing issues in the communities where we live and work. Based on the findings of this review, we shifted our regional education commitments to focus on the topic of future skills. We are working with new and existing partners in this area and we announced our first cornerstone partnership in this field in the US in July 2019. CareerWise NY is a cross-industry and stakeholder effort led by nonprofit HERE to HERE to test the potential of replicating the Swiss apprenticeship model in companies in New York City. The Credit Suisse Americas Foundation committed USD 1 million of funding to these efforts over the next three years and will also work with employees across the bank to implement apprenticeship placements. In 2020, we expect to announce other cornerstone partnerships across the regions.

The employment landscape is evolving rapidly due to the digitalization of work processes and demographic changes. What steps is Credit Suisse taking to support mature employees in Switzerland in the later stages of their careers?

At Credit Suisse, we are committed to helping employees realize their full potential at every stage of their career, including more mature professionals within our workforce who bring considerable skills and experience to their roles. We provide tailored support so that this group of employees can adjust their skill sets to changing market needs, adapt to new environments and remain employable in the labor market.

Our range of learning and development opportunities include:

• The VEP (Very Experienced Professionals) Network 45+: This Diversity and Inclusion employee network offers tailored learning events and workshops and facilitates a dialogue between generations. Topics range from the latest technology trends to advice on how to drive one's career forward and create "one's own brand".
• Workshops to teach presentation skills for interviews and provide advice on how to create a short profile on social media like LinkedIn.
• The Generational Mentoring program: In this reverse approach, seasoned employees engage in an exchange with their younger colleagues about how they handle their current work environment, which communication channels they prefer, and how they manage daily challenges.
• The external training program Skills 4.0 provided by the Challenge Your Potential (CYP) learning organization: This program focuses on developing the new skills and the mindset required for the digital age, including self-assessments and personal coaching.

Furthermore, we offer senior executives over the age of 50 and with at least ten years of service the opportunity to take a three-month sabbatical during which they receive 80% of their regular pay. We encourage these individuals to take a break from daily business in order to focus on their personal and professional development. We believe that fully committed employees with the right set of skills and a good grasp of technology over the entire employee lifecycle are key success factors for the bank.

Challenge: Tackling climate change is a major global challenge, receiving increasing attention from a wide range of stakeholders, including policymakers and regulators, investors, NGOs, climate activists, the media and the broader public. The year 2019 saw large-scale demonstrations demanding climate action around the world, some of which addressed the role of financial institutions. Making finance flows consistent with a pathway towards low greenhouse gas emissions and climate-resilient development is also an important component of the Paris Agreement, which entered into force in 2016. What steps is Credit Suisse taking to help address the challenge of climate change?

Response: Credit Suisse recognizes its share of responsibility in addressing the challenges of climate change, and we acknowledge that financial flows also need to be brought in line with the objectives of th Paris Agreement. We believe that our role as a financial intermediary is to act as a reliable partner in the transition to a low-carbon and climate-resilient economy. Our principles and our approach to climate protection are set out in our Statement on Climate Change, and we became a founding signatory to the Principles for Responsible Banking of the UN Environment Programme Finance Initiative (UNEP FI) in 2019.

In the same year, we introduced a Group-wide Climate Risk Strategy program, integrating our existing efforts as well as defining new measures. As a part of this strategy, we are working with our clients to support their transition to low-carbon and climate-resilient business models. We also continue to integrate climate change into our risk management process. This includes evaluating factors such as a company's greenhouse gas footprint and its energy efficiency objectives, while some of our policies and guidelines require clients to have a plan in place to deal with climate change risks. In 2019, our sector policies and guidelines, which had previously excluded any form of financing for new greenfield thermal coal mines, were updated to also exclude any form of financing specifically related to the development of new coal-fired power plants.

We continued our work on addressing the recommendations of the Financial Stability Board's Task Force on Climate-related Financial Disclosures (TCFD). In that context, Credit Suisse participated in the Paris Agreement Capital Transition Assessment pilot project in 2019, working with other international banks to develop and test methodologies for measuring the alignment of corporate lending portfolios with the Paris Agreement. We are also participating in Phase II of the TCFD Banking pilot under UNEP FI, through which a systematic, repeatable and comprehensive approach to assess transition and physical risks in accordance with the TCFD recommendations is being developed. Credit Suisse is also continuously expanding its activities in the area of green finance. In our own operations, we have been greenhouse gas neutral on the reported aspects since 2010 and have reduced our greenhouse gas emissions by 70% since 2010.

Finally, Credit Suisse engages in an ongoing dialogue with NGOs and other actors in the conversation on climate change. The concerns expressed in that context are important. We take a variety of viewpoints on the nature, scope and pace of actions required into account when further developing our approach to addressing this challenge.