Ahead of the UN Climate Action Summit 2019 in New York, the governments of Switzerland and the Netherlands presented a new initiative to measure and align financial flows with the Paris Agreement’s 1.5°C goal.

Under the terms of the pledge, participating governments and financial institutions will use the PACTA methodology devised by 2° Investing Initiative to compare their investments and financing with climate benchmarks.

The latest round of assessments started in early 2020 and involves the governments of Denmark, Italy, Luxembourg, Norway, Portugal, Spain, and Sweden, in addition to Switzerland and the Netherlands. Private financial institutions, their industry representatives, public financial institutions, and supervisory authorities can also voluntarily participate. The expanded model will later be made available for asset managers and banks, in addition to Swiss pension funds and insurance companies.

Participants can now directly access the Portfolio Monitor Platform here.

2017 collaboration with the Swiss Federal Office for the Environment

The initiative is based on a successful pilot project in Switzerland. In 2017, the Federal Office for the Environment (FOEN) and the State Secretariat for International Finance (SIF) invited pension funds and insurance companies to use the PACTA methodology to test the climate compatibility of their investments. 79 pension funds and insurance companies, representing about two-thirds of the total market as measured by assets under management, used the PACTA methodology to test their portfolios for climate compatibility.

For more information on the 2017 assessment, see our report: “Out of the fog: Quantifying the alignment of Swiss pension funds and insurances with the Paris agreement.”