Liechtenstein Bank

Worldwide, there is plenty of awareness that more sustainability is urgently necessary. The focus now must be on implementation

The fight against climate change dominates headlines around the world – and rightly so. Young people are more politically active now than they have been in a long time. The issue has been on the global agenda since long before “Fridays for Future” – but it has become dramatically more urgent. Not least of all, this is because climate change is no longer abstract. Each one of us is feeling the impact of “business as usual” more and more directly every day. Melting glaciers no longer leave any hiker cold. Floods and burning forests are raising more and more fears in our part of the world as well. The impact of climate change is no longer something we hear about only in news reports about faraway countries. The impact is visible on our doorstep every day. Now it is clear to everyone that much more needs to be done – and should have been done long ago. Sustainability has arrived in global politics Despite all this, it was not until 2015 that the international community was able to agree on binding targets and deadlines in the Paris Agreement on climate change. Since then, terms such as climate neutrality, decarbonisation, and net zero have dominated the public discourse. The year 2015 was important not only for the fight against climate change, however, but also for more sustainable development as a whole. That year, the United Nations succeeded in adopting the 17 Sustainable Development Goals (SDGs). The SDGs set out a binding, comprehensive, and global sustainability concept. They aim to shape our world by 2030 in such a way that all people will have the same opportunities for a healthy and peaceful life in freedom and security. So it makes sense to claim that 2015 was the year when sustainability finally arrived in global politics. Certainly, both the Paris Agreement and the SDGs have their weaknesses. Not all countries have signed the agreements or have committed to implementing the same ambitious targets. But this should no longer serve as an excuse.

Pandemic as a warning and accelerator The current global pandemic in particular has impressively shown that a comprehensive approach in line with the SDGs is correct and that the social aspects must not be forgotten in the context of the urgent environmental challenges. For example, as human habitats expand, there is more contact between wildlife and humans, making it easier for viruses to spread. The World Bank estimates that up to

another 100 million people may fall below the poverty line due to the medium-term economic impact of the pandemic. Moreover, the progress made thanks to tremendous efforts in public and private education around the world is in jeopardy due to a lack of funds. Finally, the accumulated global public debt is astronomical and far from sustainable.

So that we can keep our world worth living in for our children and grandchildren, we not only need to think differently – we need to act decisively. In other words, we need to walk the talk. The envisaged transformation needs all of us, and it poses enormous challenges. The private sector, policymakers, researchers, and society as a whole are all equally challenged. The risks for certain industries are well known. But there is still far too little talk about the opportunities – especially for the financial sector. According to estimates by PwC, the annual global investments required to achieve the SDGs amount to approximately USD 7 trillion. Only one seventh of this amount is currently covered by the public sector. A substantial share must come from the private sector. The recent “Better Business, Better World” report also shows that pursuing sustainable and integrative business models could unlock economic business opportunities worth at least USD 12 trillion per year by 2030, creating up to 380 million jobs.

Multifaceted contribution of the banking sector Liechtenstein and its banking sector have committed themselves to implementing the SDGs. Perennial sceptics may once again claim that Liechtenstein, as a small country, is hardly able to make a meaningful contribution. This ignores, however, that the country is home to a broadly diversified, export-oriented economic sector with a strong industrial location and an internationally positioned financial centre. Liechtenstein is one of the most industrialised countries in Europe. Industry and the financial centre alone account for approximately 65% of the country’s gross domestic product. Together, they play an essential role in innovation, research, and development, but also in mobilising and channelling the funds needed to implement the SDGs.

It is no coincidence that the banking sector has set out an ambitious vision in its new multi-year strategy, Roadmap 2025: We want to make a valuable contribution to the transformation of the global economy towards greater sustainability. We are doing this on four levels. Firstly, the ESG criteria for sustainable investments play a decisive role in the banking sector when putting together a sustainable investment portfolio. The greatest weight is currently given to environmental criteria. In terms of the SDGs, goals 6 (clean water), 7 (clean energy), 9 (innovation & infrastructure) and 13 (climate action) are accordingly of great importance from an investment perspective. Here, banks will play an important steering role through an expanded product offering. Secondly, the focus of the individual banks’ own support and promotion measures is primarily on the following SDGs: 3 (health), 4 (quality education), 6 (clean water), and 15 (life on land). Through their own grant-making foundations, the Liechtenstein banks are already very active in these areas, and they are also living up to their social responsibility through their participation in Waterfootprint Liechtenstein and the FAST initiative to combat human trafficking and modern slavery. Thirdly, all banks have very long-term oriented business models based on stability, resilience, and security. The banks comply with European and international standards in tax matters and on combating money laundering, terrorist financing, and corruption. And last but not least, many social aspects are emphasised by both the Liechtenstein Bankers Association and its members. Work-life balance, new hybrid working models, and the Villa Wirbelwind daycare centre initiated by the banks are just a few examples. Once again in terms of the SDGs, these help support goals 4 (quality education), 5 (gender equality, reconciliation of family and working life, and diversity) and 9 (infrastructure and mobility).

The major banks are in a strong position to lead by example. LGT, for instance, as the largest and most international banking group, already presents its contribution to the SDGs in considerable detail on its website and recently committed to net zero as part of the NetZero Banking Alliance.

In all of this, the goal set out in SDG 17 – strengthening partnerships and cooperation – is of great importance. Especially as a small country, Liechtenstein depends on this. And also thanks to its short communication and decision-making channels, this cooperation is put into practice both across the private sector and between the private and public sector to an extent hardly seen in any other country. Greater sustainable development requires not only that everyone takes the issue seriously and addresses it responsibly, but also that we implement it together just as consistently, turning words into deeds. ◆

Established in 1969, the Liechtenstein Bankers Association is the domestic and international voice of the banks operating in and out of Liechtenstein. It is one of the country’s most significant associations and plays a key role in the successful development of the financial centre. Member interests are pursued in accordance with the principles of sustainability and credibility. As a member of the European Banking Federation (EBF), the European Payments Council (EPC) and the European Parliamentary Financial Services Forum (EPFSF), the Liechtenstein Bankers Association is a member of key committees at the European level and plays an active role in the European legislation process. Since 2017, the LBA has also been a member of the Public Affairs Council (PAC) with offices in Washington and Brussels and since 2018 of the international network ‘Financial Centres for Sustainability’ (FC4S).

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bankenverband.li https://www.bankenverband.li/en/ bankers-association/roadmap-2025