5.1 Introduction

Relevance of the topic to SZKB and objectives

Sustainability, with the climate as a key component, is of high strategic relevance for SZKB. In 2023, the Bank Council adopted SZKB’s comprehensive sustainability strategy, which covers the three dimensions of Environment (E), Social (S) and Governance (G), abbreviated to ESG.

SZKB’s climate reporting is based on the requirements of Swiss legislation (non-financial matters pursuant to Articles 964a et seqq. CO) and the regulatory requirements of the Swiss Financial Market Supervisory Authority (FINMA). As part of this process, SZKB prepares its climate reporting in accordance with the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD), which have been incorporated into the new IFRS Sustainability Disclosure Standards of the International Sustainability Standards Board (ISSB).

SZKB targets in the area of climate are listed on the right.

 

Management approach

Governance
Governance at Schwyzer Kantonalbank is based on the national, cantonal and internal requirements, which are explained in the following sub-chapters. Climate reporting focuses on the role of the Executive Board and the role of the Bank Council in managing climate-related risks and opportunities.

Strategy
With its sustainability strategy, SZKB has laid the foundation for integrating environmental, social and governance factors into the company’s business practices. The strategy focuses on ensuring the company’s long-term resilience to climate-related risks and opportunities, which are specifically addressed by the TCFD framework. The aim is to create transparency and promote responsible management of climate-related risks and opportunities in order to inform the company’s stakeholders (e.g. investors, clients, employees and regulatory authorities) and to generate long-term value.

Risk management
SZKB has built up an ESG risk management system and integrated it into the risk management process. All three dimensions of E, S and G form an integral part of SZKB’s risk management. A special focus is also placed on climate-related financial risks. SZKB follows the recommendations of the TCFD, thereby ensuring a transparent, consistent and strategic approach to climate risks and opportunities while enhancing its resilience to the challenges posed by climate change.

Key figures and targets
An essential part of the Climate Report is the transition plan, which serves as a long-term roadmap for decarbonisation and adapting to climate-related challenges. This plan takes into account key figures, such as the reduction of CO₂ emissions, as well as objectives and the integration of climate and sustainability aspects into SZKB business models and financial products. The transition plan also includes strategic targets, timeframes and necessary adjustments or measures.

 

Climate targets under the sustainability strategy

 

	Focus	Sustainability ambitions and objectives
	Responsible business conduct	Sustainability ambition: "We stand for a conscientious company that acts in accordance with the best of its knowledge and beliefs. As a bank, we acknowledge our responsibility to our stakeholders. We strive to enhance overall trust in the financial sector and ensure the satisfaction of our clients and employees through our responsible operating practices, which reflect the results of specific measures taken. It is also important for us to recognise and reduce our negative impacts on the environment. Ultimately, we want to support local projects in making a positive contribution to society."
8	… towards our employees	By 2030, reduction in greenhouse gas emissions from transportation (Scope 3) in accordance with Switzerland’s climate strategy (reduction of 21% compared to reference year 2021).
13	…towards our environment	By 2027, SZKB will reduce its operational CO₂ emissions by 15.8%, or 145 t (base year 2021), to 770 t.
	Responsible financing	Sustainability ambition: "We promote sustainable financing. As a bank, we recognise our role within society as an enabler of the development of sustainable activities. We are committed to expanding access to sustainable financial services for private and professional clients while integrating environmental and social criteria into our financing solutions. We also would like to reduce the greenhouse gas emissions of our financing portfolios and achieve net zero emissions by 2050."
17	Sustainable mortgage portfolio	The emissions intensity of mortgages1 financed will be reduced by a minimum of 42% by 2030 compared to the 2022 base year.
18	Sustainable mortgage portfolio	By 2030, the emissions intensity of commercial real estate financed will be reduced by a minimum of 40% compared to the 2022 base year.
	Responsible investing	Sustainability ambition: "We promote sustainable investments. As a bank, we recognise our duty to manage our clients’ assets responsibly with a long-term focus. We are committed to systematically incorporating sustainability aspects into the development of all our portfolios in order to manage sustainability risks. At the same time, we want to offer our clients sustainable products that align with their ESG preferences and expectations. Ultimately, we see ourselves as representatives of our clients in regard to all investment recipients and seek to work towards more sustainable business development on their behalf."
25	Sustainable financial products	By the end of 2025, at least 20% of asset management mandates should reflect client preferences that are classified as "Aware", "Focused" or "Effective", and by the end of 2030, this should increase to at least 50% of all asset management mandates.
26	Sustainable financial products	The proportion of SZKB investment funds with alignment with client preferences of "Aware" or "Focussed" will be at least 20% of the total of all SZKB investment funds at the end of 2025, and this proportion will increase to at least 50% by the end of 2030.

 

Additional climate targets for the transition plan

	Sustainability ambitions and objectives
Investing	Funds with Focused preference (ethical funds): • 2030: Adherence to the 1.5° C climate target in the Ethical Fund • 2050: Adherence to the 1.5° C climate target in the Ethical Fund
Investing	AM mandates with Focused preference (ethical core mandate) • 2030: Adherence to the 1.5° C climate target for asset management mandates with a Focused preference • 2050: Adherence to the 1.5° C climate target for asset management mandates with a Focused preference
Operations	Reduction of operating CO₂e emissions: • 2030: 841.2 tCO₂e • 2040: 678.1 tCO₂e • 2050: 414.4 tCO₂e

 

¹ _{Financed mortgages include single-family houses and individual flats.}