2 Classification of sustainability at SZKB

The Annual Report also includes the SZKB Annual Financial Statements. The Annual Report reliably presents the economic situation of the Bank. The Annual Financial Statements include, in particular, the Balance Sheet, the Income Statement, the Cash Flow Statement, and the Statement of Changes in Equity. The Annual Report also provides information on the Bank’s corporate structure, business activities, corporate governance, risk management and the remuneration of the Bank Council and the Executive Board.

The Sustainability Report includes reporting on SZKB’s non-financial matters. Together with the Annual Report, it provides a comprehensive picture of the financial, social and environmental dimensions of SZKB’s business activities.

Like the Annual Report, the Sustainability Report provides information about SZKB. One exception is the carbon footprint, the CO2 balance, which also includes the emissions of the Innovation Foundation and the Pension Fund of the Canton of Schwyz, as SZKB provides services to these organisations. 

The Sustainability Report was prepared for the first time for 2022. There are therefore no changes due to organisational adjustments, changes in measurement methods or the like. 

Unless stated otherwise, all information in this Sustainability Report relates to calendar year 2022.

An exception to this rule is operational ecology. Due to business-related delays in reporting by external and internal data suppliers, the key figures for operational ecology are based on 2021. The reporting period for sustainability reporting thus largely corresponds to that of SZKB’s consolidated financial reporting.

The Sustainability Office is responsible for preparation of the Sustainability Report. 

The Sustainability Report 2022 was approved by the Executive Board on 7 February 2023 and adopted by the Bank Council on 14 February 2023 for the attention of the Cantonal Council of Schwyz. 

SZKB’s Sustainability Report was not subjected to an external audit. It was published on 17 March 2023. 

This report contains forward-looking statements based on expectations and assumptions. Various influencing factors may cause the actual results to differ from the estimates provided here. 

SZKB will continue to develop this Sustainability Report and publish it annually in future.

SZKB’s sustainability reporting puts its focus on the relevant sustainability issues, that is, the topics where the Bank has the greatest impact on society, the environment and the economy. 

As a starting point, SZKB drew upon industry analyses, sustainability ratings, stakeholder input and media reports to compile possible topics specific to the industry, Bank, and Canton and then had subject matter experts evaluate and analyse the effects. The assessment of the subject matter experts as to which sustainability issues are material was verified by the Executive Board.

According to its initial assessment, SZKB considers the following sustainability topics to be material:

  1. Sustainability in the financing sector 
  2. Sustainability in the investment sector 
  3. Sustainability in the area of social affairs
  4. Sustainability in operations and procurement 
  5. Good corporate governance 
  6. Client and consumer protection 
  7. Access to financial services 
  8. Confidentiality of client data, data security and data protection
  9. Local engagement, sponsorship and partnerships

    SZKB has an integrated, goal-oriented approach to management. The Bank Council defines the strategy and the basic direction of sustainable development. The strategy serves as the basis for business policy and the positioning of the Bank in regard to economic, ecological and social matters. It is reviewed annually.

    In 2021, SZKB integrated the topic of sustainability into its organisation and created a «Sustainability Officer» position. This position reports directly to the Chair of the Executive Board and is supported by people from a variety of different departments. These individuals contribute their specific expertise and work in cross-functional projects on specific activities for the benefit of SZKB’s sustainable development. Coordination of the overall sustainability management is the responsibility of the Sustainability Project Committee, which consists of the Chair of the Executive Board and a member of the Executive Board. This positions the issue of sustainability at the highest level of the company and underscores its importance.

    SZKB is in the process of developing an ESG risk framework, the initial focus of which is on climate risks, as stipulated by FINMA. A set of indicators and metrics in regard to the effects of climate change will be developed and established in this context, and reporting according to a recognised standard will be provided.

    In 2022, SZKB conducted an opportunity and risk analysis of its climate-related financial risks for the first time as part of a qualitative process supported by experts and based on the two categories of «physical risks» and «transitional risks». Each risk driver (such as extreme weather events or higher energy prices) was examined in terms of its impact on business activities, and the inherent risk was described and qualitatively assessed. 

    However, climate change also offers certain opportunities for SZKB. These were also analysed and evaluated for the first time in 2022. The greatest opportunities lie in the development of new products and new services to tap into additional potential. 

    Physical hazards (robbery, fire, flooding, power failure, etc.) related to the Bank’s locations or with regard to ensuring banking services are evaluated within the framework of business continuity management and disaster preparedness, and appropriate measures are defined.

    Schwyzer Cantonal Bank 
    Dr Olivier Hofmann
    Sustainability Manager 
    + 41 58 800 21 90

    SZKB maintains an active, partnership-based and accessible approach to its stakeholders. The most important stakeholder groups are: 

    • The Canton of Schwyz (owner), districts and municipalities 
    • The residents of Canton Schwyz 
    • Clients
    • Internal and external employees
    • Supervisory authorities and the Cantonal Parliament
    • Analysts and the media
    • Investors
    • Suppliers and business partners
    • Sponsorship partners
    • Associations and interest groups. 

    Stakeholders expect SZKB to conduct its business in a contemporary and responsible manner and to comply with laws and regulations. The residents of the Canton of Schwyz and the Canton itself also expect SZKB to contribute to balanced and sustainable development of the Canton, taking particular account of the needs of the people living in the Canton, the economy and the public sector. There is a growing need for reporting that increasingly takes non-financial issues into account, especially among supervisory authorities, analysts, the media and investors.

    It is foreseeable that banks, and thus also SZKB, will be faced with a number of new regulatory requirements with a bearing on sustainability. SZKB is currently in the process of analysing where there is a need for action in this area, what measures are necessary and who should carry them out. With the assistance of external support, the corresponding roadmap will be drafted and made available by mid-2023. 

    Either way, over the next one to two years it is anticipated that SZKB will examine how risk management in regard to the financial impact of climate change as well as other key sustainability issues can be expanded and how additional metrics can be established. This also includes verification of the opportunity and risk analysis carried out for the first time in 2022, review of the risk framework and integration of ESG-related risk management into the company-wide 
    risk management.