A holistic approach to sustainable finance
Since the Paris Agreement on climate change and the adoption of the Sustainable Development Goals of the United Nations in 2015, sustainability has experienced a veritable renaissance. Not a day goes by that sustainability is not talked about. The claim of Liechtenstein and its banks is to think and act sustainably – not only since today or yesterday, but for a long time already.
The most impressive proof of Liechtenstein's sustainability across generations is certainly the 300th anniversary of the country's existence, which it celebrated just last year. The celebrations attracted attention even across national borders.
It is far less well-known that, for instance, all 11 municipalities of the country have borne the “Energy City” label since 2013. The Principality is thus the only country in the world that can call itself “Energy Country”. In two other areas, Liechtenstein has created public-private partnerships that are one of a kind and that also play a pioneering role internationally. The first one is the “Waterfootprint Liechtenstein” initiative. The principle of the project is as simple as it sounds: “Drink tap water. Donate drinking water.” With this campaign, “waterfootprint.li”, Liechtenstein aims to become the first country to provide access to clean drinking water to one person suffering from water poverty for each of its residents. This goal will be achieved by the end of 2020.
The second one is the so-called FAST initiative to fight human trafficking and modern slavery. The United Nations estimates that more than 40 million people worldwide live in captivity, are exploited by forced labour, or suffer from another form of servitude. About 25 million people are pushed into forced labour, 16 million of which in the private sector. There are still about half a million people at our doorstep in Europe who live in slavery-like conditions. In many cases, the goods that enslaved people produce – including tobacco and food – end up in legitimate distribution channels. Studies also show that modern slavery and human trafficking are the most common predicate offences of money laundering and terrorist financing in the world today. So, it is vital that countries like Liechtenstein, with its broadly diversified economy and strong industrial and financial centres, take a stand.
These examples illustrate our commitment to sustainability as a global issue that concerns all people, everywhere.
For Liechtenstein’s banks, sustainability is also an integral part of their corporate culture. Their business models are focused on longevity. Beyond this, the banks' sense of responsibility can be seen not only in its diverse engagement through their own public-benefit foundations, the membership and inclusion of all three major banks in the Swiss and Liechtenstein Climate Foundations, the wide range of energy efficiency measures – including climate neutrality – and the high corporate governance standards, but this sense of responsibility is also deeply enshrined in the banks' core business.
Taking a holistic, sustainable approach to business isn’t just “the right thing to do”: it also makes sound investment sense. The current pandemic demonstrates that sustainable financial investments are more resistant to crises than conventional investments. Numerous studies also show that returns on sustainable investments can match or even outperform those of conventional investments in the medium to long term.
For both, Liechtenstein and its financial centre, the future belongs to a holistic approach towards sustainability. And this path must be taken in partnership – between different generations, industries and countries. In this regard, the UN, as a global organisation now in its 75th year, plays an essential role. The Sustainable Development Goals have given the world not only a shared vision and framework to lead, but also a clear set of instructions and a mandate. The Liechtenstein banking and financial centre is ready – and setting the course.
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