Taking climate protection into account
We address the challenge of climate change at various levels. We take into account environmental and climate impacts in our risk management and product development. Our operations have been greenhouse gas neutral since 2010. We also engage with stakeholders to gain insights that can help us develop sustainable business practices.
The Paris Agreement to strengthen the global response to the threat of climate change entered into force in 2016. Its overarching objective is to limit the rise in the global temperature to well below 2° Celsius above pre-industrial levels. As a global financial institution, we recognize our share of responsibilities in combating climate change by supporting the transition to a low-carbon and climate-resilient global economy.
Our principles and our approach to climate protection are set out in our Statement on Climate Change, which describes how we intend to address climate-related risks, provide solutions and advice in the area of sustainable finance to our clients and reduce our own environmental footprint.
Climate Risk Strategy
Based on the experience gained through our participation in various industry working groups and the dialogue with our clients, investors and various stakeholders on the global challenge of climate change, we have introduced a Group-wide Climate Risk Strategy (CRS) with a three-pronged approach. This approach consists of:
Products and Services
Sustainable investments (investments that exclude non-sustainable areas or promote leaders in environmental, social and governance criteria) have more than doubled in volume over the last five years. The volume of impact investments (investments that explicitly seek to make a positive social or environmental impact in addition to generating a financial return) has increased at an even faster pace. Credit Suisse has been active in this investment space for more than 16 years and, as a pioneer, continues to contribute substantially to the development of this market.
One area of sustainable investing that is growing in importance and scale concerns investments that support environmentally sustainable development – a sector known as green finance. Our green finance solutions cover a wide range of asset classes designed to positively impact the transition to a low-carbon and climate-resilient economy, drawing upon the expertise of various specialist departments across our divisions.
In the area of renewable energy, Credit Suisse is involved with a significant number of debt, tax equity and equity financing transactions, opening up sources of capital for companies active in this field. Our expertise is diversified in renewable energy areas such as solar, wind, geothermal, biomass, biofuels, fuel cells and energy efficiency.
We also support the Green Bond Principles, and we are a partner to the Climate Bonds Initiative. Both of these initiatives seek to mobilize investments in the capital markets for environment and climate-related projects.
We regard sustainability as an essential requirement in the management and development of the properties within our various real estate products. Global Real Estate's commitment to sustainable real estate is reflected in its investment solutions and its sustainable investment approach to the whole portfolio.
Sustainable real estate
Volume of the portfolio of properties managed by Credit Suisse Global Real Estate, reflecting its commitment to sustainable real estate in its investment solutions and its sustainable investment approach to the whole portfolio.
More than CHF
All managed properties are monitored and controlled by the building technology company Siemens Switzerland AG with the aim of ensuring transparency across the lifecycle of each property. In addition, Global Real Estate takes account of global climate, energy and renewable energy targets, and it complies with the corresponding regulatory requirements.
Credit Suisse uses a wide range of risk management practices to address the variety of risks that arise from our business activities. Reputational risk is assessed in the Reputational Risk Review Process. Environmental and social risks are some of the aspects considered in that process.
For example, companies operating in sensitive industries frequently play a key economic role in the global supply of energy and commodities. They may also be a major employer in economically weak regions. At the same time, we recognize that the activities of these companies can, in some cases, have a significant impact on the climate, biodiversity, water resources or local communities.
Risk management at Credit Suisse
Interview with Joachim Oechslin, Senior Advisor – Risk Management
Potential client transactions that could pose a risk to the environment, the climate, biodiversity or human rights are analyzed through our internal risk review process. We apply our own sector policies and guidelines to set out the environmental and social standards that we expect clients to observe. These guidelines take into account standards developed by international organizations such as the UN and the World Bank and cover areas such as oil and gas, mining, power generation, and forestry and agribusiness, which covers pulp and paper as well as palm oil production.
Within our risk review process, we evaluate factors such as a company's greenhouse gas footprint or its energy efficiency targets, among other things, while some of our policies and guidelines require clients to have a plan in place to deal with climate change risks. Our policies and guidelines also describe business areas and operational processes that Credit Suisse will not finance. For example, we apply restrictions on the financing of new mining projects to extract thermal coal and of new coal-fired power plants. Our sector policies and guidelines are regularly reviewed and updated to reflect the latest developments and challenges.
In 2018, we established a climate change program with the overall goal of addressing the recommendations of the Financial Stability Board's Task Force on Climate-related Financial Disclosures (TCFD) for the voluntary reporting on material risks and opportunities arising from climate change. In that context, we have worked to formalize climate-related governance and definitions in our key policies and risk taxonomy and to define the principles for climate risk strategy and management. We expect our TCFD adoption efforts to provide us with further guidance for the transition to a world that progressively minimizes its dependency on fossil fuels. Moreover, we are working with other banks to develop methodologies for the alignment of credit portfolios with the Paris Agreement. Credit Suisse's Annual Report 2018 provides an overview of the status of our implementation of the TCFD recommendations.
We are committed to minimizing our own operational climate impact. Credit Suisse has been greenhouse gas neutral globally since 2010. We systematically pursue our four-pillar strategy based on operational efficiency improvements, energy-saving investments, the substitution of existing energy sources through climate-friendly energy and renewable energy certificates (RECs), and finally by compensating for the remaining emissions through the purchase of emissions reduction certificates (ERCs). As a result of the various measures taken across the first three pillars of our strategy, our net global greenhouse gas emissions decreased by around 38% to 129,100 metric tons of CO2 equivalents in 2018 compared to the year 2016.
Net greenhouse gas emissions
Metric tons in the reduction in net greenhouse gas emissions measured in CO2 equivalents that we have achieved since 2016. Credit Suisse has been greenhouse gas neutral globally since 2010.
Credit Suisse participates actively in discussions on how to promote a more sustainable, climate-friendly approach to business, and we exchange knowledge with a variety of organizations and expert groups.
In 2018, Credit Suisse continued to participate in the dialogue about the development of trategies for sustainable, climate friendly business practices. For example, we hosted the launch event for WWF Hong Kong's publication "Climate Primer for Institutional Investors", which updates investors and investment managers on the science, policy, risks and opportunities associated with global climate change.
In June 2018, we hosted a Climate Forum of the Principles for Responsible Investment (PRI) in New York that focused on the TCFD recommendations and the transition to a low-carbon economy. In Switzerland, we have, for a number of years, hosted the Lifefair Forum event series that explores topics such as climate-related issues. At these events in 2018, experts from the business community, the political arena and NGOs engaged in discussions about multi-stakeholder partnerships in sustainable food chains and the circular economy, amongst other things.
Raising employee awareness of environmental issues
The need to make responsible use of natural resources is set out in our Code of Conduct. We actively inform employees about environmental issues and give them the opportunity to make a personal contribution to environmental protection.