Relevance of the topic for SZKB and its objectives

Investment decisions (e.g. investments or exclusions) can cause positive or negative environmental and social impacts. For example, climate change, regulatory changes or societal developments can affect the risk or return of an investment and thus have a direct impact on SZKB. In addition, investors are also affected by such effects on returns. Opportunities and risks relating to responsible investing can be divided into an inside-out perspective and an outside-in perspective:

• Inside-out – the impact of investment business on the environment and society: SZKB investment business can have environmental and social impacts. Investments may finance companies that implement measures relating to sustainable CO₂ reduction, for example. At the same time, there is a risk that problematic activities may be supported by investments in certain sectors. Positive effects include the fostering of innovation and the creation of jobs, while negative effects may include undesired CO₂ emissions. The investment business enables clients to systematically accumulate assets and thus increase private pensions, among other things.
• Outside-in – the impact of ESG factors on investment business: External ESG factors such as climate change, resource scarcity or regulatory requirements directly affect SZKB’s investment business. These factors can alter the risks and return opportunities on investments, affecting both SZKB and its investment clients.

«Sustainable products and services» and «climate change» are key topics for SZKB in the area of responsible investments¹.

SZKB has defined the following goals in the area of responsible investing:

• Consideration of controversial and/or environmentally harmful sectors in the investment decision-making process.
• Development of further investment products that fostersustainable behaviour and thus correspond to various ESG preferences
• Development of an engagement policy by 2025

After the financing business, the investment business is SZKB’s second-largest segment.

Management approach

Asset management and investment advice
As part of its asset management and investment advisory services, SZKB ensures that clients receive the right investment solutions. The investment horizon, risk tolerance, investment objectives and ESG preferences are recorded individually and taken into account in the investment recommendations. For all investment clients, ongoing checks are carried out in order to ensure that existing investments comply with the defined ESG preferences. Any discrepancies are identified and discussed with clients in order to ensure that they meet individual needs. No investor profiling and thus no review is carried out for execution-only clients who decide without any advice. The asset statement transparently indicates which ESG preference has been assigned to each investment.

Bank-wide processes and guidelines
Bank-wide processes, responsibilities and framework conditions are defined in internal requirements such as directives. The SZKB Investment Committee, which sets tactical asset allocations for various risk profiles on a monthly basis, is headed by a member of the Executive Board. The financial instruments for managed portfolios are selected according to clearly defined due diligence criteria, as set out in the directive «Investment Process in Asset Management and SZKB Fund Management».

In addition, an independent investment controlling system has been established. This ensures the ongoing monitoring of investment activities and also includes systematic monitoring of ESG investment risks.

Recording of ESG preferences
SZKB records the ESG preferences through dialogue with clients. Sustainability is fully integrated into the investment advisory process, supported by a tool that enables ESG preferences to be recorded directly during the advisory consultation. SZKB has implemented on time the binding guidelines of the Swiss Bankers Association (SBA) as well as the self-regulation of the Asset Management Association Switzerland (AMAS) on sustainable finance. At SZKB, the following four classifications are used for ESG preferences:

• Classic (exclusion of ESG extreme risks)
• Aware (compliance with moderate sustainability criteria)
• Focused (compliance with comprehensive and strict sustainability criteria)
• Effective (achievement of a specific, measurable sustainable benefit)

SZKB issues its own ESG rating for all securities based on the requirements set out in the internal document «ESG Rules», which operates as a sustainability policy. This set of rules defines, among other things, the process for creating and applying SZKB’s ESG ratings. In 2025, the climate aspect in the «Focused» ESG rating was changed from 1.5 to below 2.0 degrees Celsius. Based on this explicit consideration of climate criteria, the global temperature increase should be limited to below 2.0 degrees Celsius.

The application of exclusion criteria
As part of the investment advisory process, each transaction is checked (except in the case of execution-only clients) in order to establish whether the selected financial instrument corresponds to the respective client’s sustainability preferences. In addition, financial instruments that could pose significant financial or reputational risks (referred to as extreme risks) are excluded from the SZKB investment universe in a manner comparable to a blacklist.

Sustainable financial products
As part of its reviews and analyses of selected products, product management reviews the range of investment opportunities that take ESG considerations into account at least once a year and expands the range if necessary.

• Ethical line: SZKB successfully implemented its inaugural ethical mandate solution for a client in 2009 and has been providing clients with a variety of financial instruments that take ESG considerations into account since 2010. Specifically, this ethical line is based on a combination of comprehensive exclusion criteria (negative selection), a best-in-class approach (positive selection) and traditional financial analysis. In addition, climate risks have been explicitly taken into account since 2024, and the range has been further refined accordingly. Solutions from the ethical line (Ethical Funds) have the «Focused» SZKB ESG rating and comply with the relevant exclusion criteria.
• ESG line: In 2024, SZKB supplemented its product portfolio with two sustainable solutions, the investment fund «SZKB ESG strategy fund» and the asset management mandate «ESG core mandate». Both solutions have four risk classifications (income, balanced, growth, capital gain). With these global and diversified solutions, 10% of the bond component and 25% of the equity component are invested in global ESG topics (e.g. water, smart infrastructure, healthcare, climate transition). New solutions from the ethical line have the «Aware» SZKB ESG rating and comply with the relevant exclusion criteria.
• Effective third-party funds: SZKB uses third-party funds for clients with the «Effective» ESG preference. A careful review is carried out for this purpose, during which SZKB selects potential third-party providers from effective funds. These funds generate a specific, measurable sustainable benefit. By using third-party funds, SZKB can offer effective funds in all ESG areas.

Specialist knowledge in the area of responsible investing
SZKB ensures that its employees have the necessary expertise in the area of sustainability. This is ensured through targeted training measures, such as online ESG learning provided throughout the Bank, which also covers ESG processes and products specific to SZKB, as well as certified external specialist courses for selected employees and managers (see Chapter 2.2.2 «Diversity and integration», section «Training and education at SZKB»).

Key measures

• Developing sustainable financial products
• Transparency in relation to SZKB investment funds
• Exercising shareholder voting rights
• Gold from fair trade
• Development of a financial investment strategy

Developing sustainable financial products

The «Dividend Equities Switzerland» category mandate was launched within the investment business segment, which is classified under the ESG preference «aware». It focuses on an ESG-aware selection of high-quality Swiss companies with a stable dividend policy and sustainable value creation.

In addition, the digital pension was launched in 2025. This enables clients to easily invest in the SZKB pension funds using a digitally guided process, taking into account their individual ESG preferences. This promotes access to sustainable investment solutions by SZKB also on a digital level.

¹ _{This is a volume figure (AuM).}

Transparency in relation to SZKB investment funds

SZKB offers its clients product-independent reporting according to the metrics defined in the value proposition. These metrics vary depending on the ESG rating, and the scope and content of the respective reporting to clients differ accordingly.

For example, SZKB publishes a transparency report concerning all risk considerations relating to the ethical line, which provides information concerning the sustainability aspects of the investment solution. It transparently discloses the companies/issuers in which the investment solution is invested as of the reporting date. SZKB also prepares a Climate Report with information on the fund’s environmental footprint. In this way, SZKB helps investors more effectively evaluate the ESG impact of their investments.

Exercising shareholder voting rights

Voting rights (proxy voting) are actively exercised for all SZKB Ethical Funds, taking into account ESG criteria based on the proposals of an independent voting rights advisor. The applied voting policy, the voting directives and the specific voting behaviour are published transparently on the SZKB website. Other active ownership approaches such as engagement solutions have been examined, although these are currently not applicable for SZKB. Given the size of the investment volume and the predominantly indirect investment through collective investment vehicles, independent engagement is currently considered impractical. Sustainability aspects are also considered by the respective fund managers.

Gold from fair trade

As a global hub in the refining and trading of gold, Switzerland has a special role to play in this market. SZKB focuses on gold from fair trade. Since 2021, gold bars weighing between one and twenty grams have been sold exclusively with the Fairtrade seal of approval from the Max Havelaar Foundation (Switzerland).

SZKB purchases gold bars weighing 20 grams or more exclusively from Swiss banks. The banks have provided written assurance to SZKB that all bars delivered by them adhere to the relevant rules of the London Bullion Market Association (LBMA)1 for proper delivery, also known as Good Delivery.

Development of a financial investment strategy

A financial investment strategy was developed in 2025. New transactions must now have at least one «classic» SZKB ESG rating. In doing so, SZKB ensures that new investments meet fundamental ESG criteria (exclusion of extreme ESG risks).

¹The London Bullion Market Association (LBMA) is the leading trade association for the global over-the-counter trade in gold and silver. Its rules, in particular the «Responsible Sourcing Guidance», set standards for responsible procurement, transparency and sustainability within the supply chain in order to protect human rights and comply with environmental standards.

Assessment of effectiveness

• The range of sustainable investment solutions has been specifically enhanced with the launch of the «Dividend Equities Switzerland» category mandate and the digital pension, which takes account of individual ESG preferences. This means that clients can have easy access to responsible investments.
• Periodic and transparent reporting through ESG reports, transparency and climate reports strengthens investor trust and allows for a more effective assessment of the ecological and social impact of their investments. By actively exercising voting rights (proxy voting) in relation to SZKB Ethical Funds, the Bank systematically accepts its responsibility as an investor.
• SZKB ensures responsible procurement with the exclusive sale of Fairtrade gold bars up to 20 grams and adherence to LBMA standards for larger bars.
• A «classic» SZKB ESG rating (exclusion of extreme ESG risks) is used as part of the financial investment strategy for new contracts. This approach supports basic risk management.

Overall, SZKB considers the measures taken to have been effective and targeted. They have helped expand the range of sustainable financial products, increase transparency towards clients and promote responsible investment practices.

Further development and next steps

SZKB has planned the following measures for 2026 and subsequent years: expansion of key ESG figures within performance statements for investment portfolios.