Confederation preparing to issue first green Confederation bond

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The Federal Council intends to strengthen the Swiss financial centre’s position as a leading location for sustainable financial services. With this in mind, it adopted a framework for the issuance of green Confederation bonds during its meeting on 17 August 2022. The first bond is scheduled to be issued in autumn 2022.

The Federal Council wishes to strengthen the Swiss financial centre’s leading position in the area of sustainable financial services. By issuing green Confederation bonds, it intends to promote the application of international standards on the Swiss capital market and encourage private sector players to issue their own green bonds. The Federal Council made this fundamental decision at the end of 2021. The funds raised with green bonds may be allocated solely to expenditure items that have a positive environmental impact, such as the promotion of public transport, the preservation of biodiversity and the construction of eco-friendly buildings, for example.

The framework adopted by the Federal Council during its meeting on 17 August 2022 forms the basis for issuing green Confederation bonds in the future. It shows how the bonds will be integrated into the Confederation’s sustainability strategy, which green expenditure from the federal budget can be allocated to green Confederation bonds and how this expenditure will be reported. When preparing the framework, the Confederation was guided by the Green Bond Principles (GBP) of the International Capital Market Association, which are considered the market standard internationally. The framework was subjected to an external evaluation and certified.

The analysis of the federal budget was based on the 2021 state financial statements and identified green expenditure of around CHF 4.5 billion, primarily in the areas of public transport, biodiversity, international cooperation and research. Since the available green expenditure exceeds the Confederation’s longer-term issuance volume and conventional bonds will continue to be issued, only some green expenditure will be allocated to green Confederation bonds. The targeted issuance volume is several hundred million francs per year. The new financing instrument will enable the proceeds to be allocated to green expenditure that has already been approved by Parliament. Green Confederation bonds will not have a direct environmental impact on their own: political decisions by Parliament are needed for concrete measures to protect the climate and the environment.

The Federal Finance Administration (FFA) is planning to issue the first green bond in autumn 2022. The precise specifications for the first issue (volume, maturity, coupon) will depend on the Confederation’s funding requirements and the prevailing market conditions at the time of issuance.


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