355 billion euros – that’s how much Switzerland will have to invest to transition to a net-zero economy by 2050, according to a recent study published by the Swiss Bankers Association and the Boston Consulting Group. What seems like an unfathomably large number starts to feel more manageable when considering that the required annual investment equates to just about 2% of the country’s GDP. It is thus no surprise that the study strikes an optimistic tone, conveying confidence that the lion’s share of the investment need can be shouldered by the domestic banking system and that Switzerland is well placed to lead the world in financing net-zero transitions.
And yet, the key question for Switzerland isn’t so much whether it can finance this transition. The country boasts the second-highest GDP per capita of OECD member states and can tap into a thriving banking sector. Rather, the key question is how, exactly, finance can be unlocked in order for this transition to actually take place. Because despite Switzerland’s economic wealth and its advantageous geography, the country is currently not on track to deliver on its commitments under the Paris Agreement. In fact, its progress is lagging in key areas such as mobility (where it only ranks 7th in Europe for electric vehicle uptake), the built environment (where retrofit rates need to triple), and agriculture (where important policy reforms have been shelved).
So why does one of the most progressive, wealthy, equitable, and environmentally conscious countries struggle so much to make progress toward a low-carbon and climate-resilient future? And what role could a more systemic approach to deploying investment capital play in helping Switzerland accelerate its net-zero transition?
These are the questions that lie at the heart of our prototyping work in Switzerland. There are no obvious answers to these questions. But what seems clear is that Switzerland’s financing challenge isn’t about affordability but rather about design—specifically, the design of strategic investment programmes that combine innovations in value capture, funding architecture, instrument design, and multi-stakeholder partnerships to achieve a step-change in accelerating investment flows.
Enabled by the Migros Pioneer Fund, our effort brings together leaders from finance, government, and academia to investigate the country’s transformation challenges through a systems lens. Our goal is to design, structure, and capitalize one or more strategic investment programme(s) open to institutional and private investors committed to transforming the most important systems the people of Switzerland depend on.