Today, BankTrack and WWF UK launched a new report at Davos. The report, “Shaping the Future of Sustainable Finance: Moving the Banking Sector from Promises to Performance”, ranked the financing policies of 39 international banks across 13 issue areas, from climate change to human rights. The study also benchmarked the banks’ policies against international norms, and found that banks are failing to uphold environmental and social standards developed by UN agencies and other international bodies. In this article we look at the performance of the Swiss banks Credit Suisse and UBS.

In the nineties the Swiss banks where among the first to consider environmental issues. They started to look at environmental risks in their domestic credit portfolio and prepared environmental reports. Those reports touched only issues like the banks own energy consumption and the use of recycled paper. They did not look into their portfolio and their clients environmental performance. But unlike the majority of banks they at least realized that there is such a thing as environmental issues.

Looking at the findings of our report it is obvious that Credit Suisse and UBS by now are positioned far behind comparable international banks. Credit Suisse scores D- (0.54) and UBS E (0.08). UBS scored only in one category, they received a rating of 1 in labour rights issues. And this is only because they are, together with Credit Suisse and many other banks a signatory to the UN Global Compact. By endorsing the Global Compact, many banks have committed to apply the International Labour Organizations four core labour standards and eight labour conventions to their own corporate operations – but none has developed a specific labour policy applicable to its lending operations. Exactly how signatory banks guarantee that their operations meet these core standards remains a mystery, as no supporting policies exist or are publicly available.

The advantage of Credit Suisse over UBS are largely windfall gains, stemming from the fact that Credit Suisse endorsed the Equator Principles and UBS did not. Being an Equator Bank earns scores in the following areas: Indigenous people (1), dams (2), Transparency and Environmental and Social Management Systems (1). But as the low scores indicate, the specific requirement for Equator banks on the issues of indigenous people and dams fall short of international standards and best practices. This is also the case for the crucial issue of transparency.

The lack of transparency is accentuated with the Swiss banks. While some banks developed their standards in consultation with NGO’s and published the results on their websites, Credit Suisse was not willing to share the forest policy they apparently have, with the authors of this study. The same is true for UBS where the Berne Declaration without success tried to find out more about their internal standards and how they apply them. We all know that Swiss banks are very discrete entities, but it makes no sense to extend the secretiveness to social and environmental issues. It would be almost an ideal world if banks would compete with each other on the quality of their environmental and social standards, today those issues haven’t even reached their core business. Therefore there is only one plausible reason for hiding standards and policies: their weaknesses could be exposed.

Andreas Missbach, Berne Declaration / BankTrack, +41 (0)79 478 91 94

The report, “Shaping the Future of Sustainable Finance: Moving the Banking Sector from Promises to Performance”, is available for download at www.banktrack.org