SNB criticized for investments in fracking companies
Published: Monday, Dec 18th 2023, 12:20
Back to Live Feed
Non-governmental organizations are calling on the Swiss National Bank (SNB) to withdraw from fracking companies. According to an economics professor, other measures would be more effective.
The Swiss Climate Alliance has been putting pressure on the National Bank for months. It is calling for a move away from investments in companies that engage in fracking. On Monday, the Alliance submitted a petition with 60,000 signatures to the bank.
According to the alliance of various organizations, the SNB currently holds securities from 69 fracking companies worth 9 billion US dollars. This means that the SNB is responsible for 7 million tons of CO2 emissions every year, the alliance calculates.
Fracking is a controversial method of extracting oil or natural gas. A liquid is injected into the ground at high pressure to make the rock more permeable. Critics warn of environmentally harmful emissions and possible risks to groundwater. Some countries have therefore banned fracking.
Greenpeace considers SNB partly responsible
The environmental protection organization Greenpeace is part of the alliance. Its campaigner and financial expert Peter Haberstich explains: "As a shareholder, the SNB is a co-owner of these fracking companies. And as such, it shares responsibility for the climate and environmental damage caused by them."
If the SNB were to sell its shares in the companies and communicate this openly, this would send a very strong signal, says Haberstich. "This increases the financial risk for everyone who relies on fracking." Under certain circumstances, this could also lead to higher capital costs, such as rising interest rates, and therefore to higher prices for the gas produced.
Economics professor Reto Föllmi from the University of St. Gallen explains that a rapid sale of the securities would put downward pressure on the shares of fracking companies. "Of course, this depends on the liquidity in the market and the size of the share package held by the SNB."
Buying opportunities for investors
However, Föllmi does not believe that selling the securities would affect the cost of capital. "As long as there are investors around the world who want to invest in fracking companies, the financing costs will hardly change." Investors would take advantage of buying opportunities that arise due to temporarily lower share prices. "If you want to curb fracking, measures such as taxes on gas or direct bans are more effective."
The loud criticism of the Climate Alliance is also being heard by the SNB. During a press conference last Thursday, Governing Board member Thomas Moser explained that the SNB has had exclusion criteria for investments since 2013. "We have a very clear process and evaluate these criteria on a regular basis."
For example, the SNB had already announced at the end of 2020 that it would exclude companies active in thermal coal mining. However, the bank does not comment on individual positions in the portfolio.
"The SNB's legal mandate is to ensure price stability," added a spokesperson on request. It is not intended to support or disadvantage certain sectors of the economy. "Through its strategy of broad market coverage, the SNB does not prevent structural changes in the economy, but automatically reflects them in its portfolio."
©Keystone/SDA
English 
German 
French 
Spanish 
Arabic