The Investment Portfolio of the Swiss National Bank and its Carbon Footprint

Abstract

This paper provides more details on the nature of the equity holdings of the Swiss National Bank (SNB)and estimates its carbon footprint. By analyzing the holdings of the SNB in the 100 most polluting companies in the world, I find that the share of assets owned by the SNB are responsible of between 23% and 38% of the domestic CO2 emissions of Switzerland. This represents as much as the greenhouse gas emissions of all Swiss households combined or 0.05% of global greenhouse gases emissions. Using two different estimation methods, I find that the SNB’s portfolio generates between 13 and 20 million metric tons of CO2 per year. This could be reduced by 99.7% to 0.07 million metric tons of CO2 per year with an investment reallocation of just 2% of the equity portfolio of the SNB.

Keywords: Carbon emissions, financial pollution, asset management, Switzerland, Swiss National Bank.

JEL Classification: E5, G11, P18, F31