The law and regulation of sustainable investment management in Switzerland

Abstract This article examines the Swiss legal framework applicable to individual asset managers and managers of collective investment schemes with regard to sustainability considerations. It addresses both private law aspects relating to the contractual relationship between investment managers and investors as well as regulatory issues centred around the question of investor protection. The legal analysis is relevant for two main reasons. First, Switzerland currently lacks a dedicated legal framework specifically governing sustainable investment management. This article explores how existing general legal provisions can be interpreted to incorporate sustainability-related obligations. Key examples include the prohibition against misleading designations of funds under Article 12 of the Collective Investment Schemes Act, as well as fiduciary duties under Article 398(2) of the Swiss Code of Obligations and Article 7 ff. of the Financial Services Act. Secondly, the development of sustainable investment management in Switzerland is heavily shaped by self-regulation. To date, these self-regulatory initiatives led by private actors have not been formally recognized by the financial market authority FINMA as minimum standards. This article examines the sustainability-related self-regulatory frameworks issued by the Asset Management Association Switzerland for managers of collective investment schemes, and by the Swiss Bankers Association for individual asset managers, and assesses their legal nature.