Switzerland has well-developed international connections. It is connected to a very wide variety of world nations and their players, whether through trade relations, direct investments, tourism, foreign policy, migration or development cooperation. As a result of this integration, Switzerland is also indirectly affected by developments and events abroad, such as climate-related changes.
Switzerland as a financial centre is the global leader in the management of private assets from domestic and foreign sources. Switzerland is also home to one of the ten largest insurance markets in Europe. If the consequences of climate change have an impact on the financial sector, this could damage wealthy bank customers (from abroad), but also threaten Swiss investments abroad and lead to major risks in the insurance industry.
Climate risks are already considered in some investment analyses today. This practice may be expanded further. For insurance companies, climate change is taken into account as part of the core business.
Switzerland’s level of self-sufficiency, including imported animal feed, has been between 50% and 59% in recent years (1995-2014). The majority of product imports come from the EU, but agricultural goods and important upstream products such as cocoa or coffee beans come from areas that are vulnerable to climate change. Market concentrations such as soya from Brazil also heighten climate-related risks.
Climate risks can be integrated into sourcing processes. In some cases, it is possible to diversify upstream inputs. There are few opportunities to influence seed, fertilisers and pesticides where markets are highly concentrated.
Switzerland is around 75% dependent on imports. Some of the imported energy sources come from countries which are vulnerable to climate change. Climate change in foreign countries can have a relevant impact on mines, refineries and transport routes for fossil fuels, and also on power networks and electricity production from renewable energies. This could lead to adverse effects on fossil fuels and the electricity supply in Switzerland.
In the case of fossil fuels, there are compulsory crude oil reserves. Several natural gas pipelines and connections to European natural gas storage facilities spread the risk. The high cross border capacity in electricity can cushion climate-related interruptions.
Climate change can increase risks to human safety and of violent conflicts abroad. Switzerland’s current security policy report states that the fragility of states has increased in recent years as a result of climate change. Countries in which Switzerland is engaged, for example, because of business activities or political interests, are also affected.
Switzerland can reduce the risk to human safety in relevant countries through development cooperation, humanitarian aid and diplomacy.
The focus of Switzerland’s development cooperation is often on people in rural areas with a high dependence on natural resources. Climate change has a major impact on the livelihoods of development cooperation target groups in many places and can pose a threat to the progress achieved.
Switzerland is already deeply engaged in climate protection and climate adaptation projects and has integrated climate change as a cross-disciplinary topic.
As a result of international networking, the impact of climate change abroad may affect Switzerland through the import and export of goods and services. In the procurement country, there could be changes in and impairments of production conditions, in the sales country an impairment of economic development and a changed demand structure. Particular risks occur where companies have a high share of exports to vulnerable countries or a high dependency on goods from climate-sensitive regions.
Private industry can help to strengthen resilience by diversifying supply chains and sales markets and collaboration with suppliers. In addition, climate risks must be integrated more systematically into management and into investment decisions.
Climate change is one of many factors that influence migration. Switzerland is not a primary destination for ‘climate-influenced’ migration, since as a rule such migration takes place over shorter distances. For those fleeing from vulnerable countries and people faced with poor economic prospects, however, Switzerland does represent a possible target.
Supporting the resilience of people in their original countries and supporting countries of origin and transit and destination countries is crucial. Swiss labour market policy is central to labour migration caused by climate change.
Last modification 05.01.2021