Sustainable and responsible investment strategies – what we can learn from wealthy investors

1,940 billion francs – that’s the total volume of sustainable investments in Switzerland in 2025. By comparison, sustainable investments represented just 1,163 billion francs in 2019. This is shown by the current market study conducted by Swiss Sustainable Finance (SSF). However, it should be noted that these figures do not distinguish between sustainable and responsible investments. Both categories are grouped together under “sustainable”.

Institutional investors have long been the driving force behind this growth. As early as 2024, the proportion of private investors nevertheless increased significantly for the first time in four years – from around 28 percent to 33 percent. SSF’s conclusion: sustainable investment approaches have now “become standard”.

On the one hand, private investors are becoming more interested in sustainable and responsible investment, while on the other, the range of sustainable and responsible investment products on offer is growing. This is substantiated by a study by the VermögensZentrum: the range of sustainable ETFs on the SIX Swiss Exchange has more than doubled since 2020. Andreas Dietrich, Professor of Banking and Finance at Lucerne University of Applied Sciences and Arts, confirms the SSF’s conclusion: “Sustainable investing has become mainstream”.

Both supply and demand are therefore present. But why is there now no way around sustainable and responsible investment? First of all, there’s no single reason why investors should focus on sustainable and responsible investments today. However, several factors point in this direction, regardless of the investment products, markets, and industries involved. This is because a sustainable and/or responsible investment strategy involves much more than climate-friendly investments or exclusion criteria that rule out investments in specific sectors or products such as weapons or coal.

Economic interests instead of moral values

As explained by Ivo Mugglin-Mooser, Head of Sustainable Investing & Financing at PostFinance, sustainable investments must have an impact on society or nature, as well as minimizing ESG risks. “Investing and sustainability can be explained from two different perspectives and in relation to two goals: on the one hand, financial materiality (responsible investments) and on the other, impact materiality (sustainable financial investments). Both are relevant in this context.”

“Investing and sustainability can be explained from two different perspectives and in relation to two goals: on the one hand, financial materiality (responsible investments) and on the other, impact materiality (sustainable financial investments). Both are relevant in this context.”

Investors’ desire to ease their conscience through sustainable investments can play a role, but it is not the main motivation for sustainable or responsible investment. The focus is on the environmental or social impacts generated by the investments – and on preserving value and increasing assets. Zacharias Sautner, a sustainable finance researcher at the University of Zurich, puts it this way: “Yet the assumption that sustainable financial products are primarily about moral values is wrong. They mostly concern economic interests and financial values.” Research in recent years has shown that financial risks and climate-related losses for the economy and individual companies are increasing significantly as a result of climate change.

Overall, the transformation of the financial sector is closely intertwined with social change. Global warming, scarcity of resources and technological innovations are transforming not only the environment, but also the economy and, in turn, investment values. That is why traditional models of investment returns have come under pressure in the past.

In Switzerland, for example, the Federal Council and FINMA set the relevant strategic guidelines and thereby influence the requirements regarding transparency, reporting and greenwashing prevention that apply to sustainable and responsible financial investments. In short, investors seeking to invest sustainably or responsibly need to consider both current and emerging developments at the political, social, and economic levels.

Balancing impact and risk avoidance in investment

As already indicated, sustainable investments must have an impact on nature or society, while responsible investments focus on minimizing ESG risks. In addition to this ecological or social sustainability, financial sustainability also plays a role, i.e. the future-proof investment of assets. This is particularly evident in the approaches of wealthy investors, who are increasingly opting for sustainable or responsible investment strategies. “The direction of the correlation is unclear,” says Ivo Mugglin-Mooser. “Is it wealthy customers who are more interested in sustainable and responsible investment products, or are banks selling wealthy customers more of these products? Both are plausible. Conversations about sustainable and responsible investments are touching on an ever-wider range of topics, and these investments are particularly popular in a private banking context.”

Simply owning substantial assets does not mean that you automatically invest better. Today, ordinary earners can invest in ways that were once available only to the wealthy. However, the options are more varied when larger amounts are available. Wealthy investors can also select a longer investment horizon. This allows them to consider future markets not just selectively, but systematically. Safeguarding family assets for future generations requires systematic assessment of future risks that could result in losses in value. Investors who remain patient can prepare for market transformations.

The strategies of wealthy investors therefore need to anticipate developments such as the energy transition, decarbonization and international transparency requirements. “These investors may also have a greater interest in doing so, as they tend to have more money and are more likely to adopt a core-satellite approach. This enabled them to focus on other asset classes at an earlier point in time and to assume greater risks,” says Mugglin-Mooser, establishing the historical link.

At the same time, sustainable or responsible investment gives wealthy investors the opportunity to exert a targeted influence on companies and promising technologies – and therefore to benefit from structural economic growth. Through active stewardship, institutional investors not only channel capital flows into sustainable organizations, but also formulate clear expectations and support companies in a targeted manner to ensure that they achieve their sustainability goals. Another key challenge is to distinguish credible, sustainable or responsible investments from mere promises. Having a clear strategy helps to avoid data gaps, inconsistent standards and greenwashing and opens up access to structurally growing markets.

Conversely, companies with a credibly sustainable business model improve their financing options and their competitiveness. This enables young companies and start-ups in particular to position themselves strategically and win over investors by providing robust, standardized ESG data. The actual capacity for transformation depends less on the “sustainable” label than on the actual implementation of a demonstrably sustainable or responsible business model.

In addition, investors with substantial assets come under greater public scrutiny. Participations in controversial sectors therefore not only entail financial risks, but can also have a negative impact on the investor’s reputation.

“Sustainable” is not necessarily sustainable

Professional asset managers integrate all these criteria into their customers’ investment strategies and systematically take ESG criteria into account in all asset classes – be it shares, real estate or private equity. They define clear sustainability standards, compare data sources and ensure comparability within complex asset structures. Reliable data can help investors to optimize their own investment strategy. However, sustainability data can be incomplete and is not always collected or evaluated in the same way.

Professional asset managers therefore use established labels, independent ratings and verified data to find out which companies provide solid information on issues such as environmental performance, social standards and corporate governance. Wealthy investors can afford this additional expense and use these analyses to ensure that their capital really is invested in companies that are making a substantial contribution to the transformation.

Investing with the opportunities of wealthy investors

Sustainable and responsible investment doesn’t necessarily go hand in hand with poorer performance. This is proven by scientific studies. Sustainable and responsible investments can be just as good or better – depending on which products are taken into account. Companies that embrace renewable energies, new technologies or transparent corporate governance at an early stage are often better prepared for future requirements – and therefore represent a solid basis for investment.

Although investors with modest assets do not have exactly the same options as wealthy investors, they can largely replicate their approach and benefit from it. “The market for sustainable and responsible investments has developed considerably. At PostFinance, for example, you can invest in a sustainable asset management mandate with an initial investment of just 5,000 francs,” says Mugglin-Mooser. In addition, access to relevant sustainability data, ratings or reports is no longer reserved for the exclusive advisory structures of wealthy investors. Thanks to digital products and tools, all investors now have greater access to relevant information – albeit not to the same extent as private banking clients.

If climate issues are important to you, you can now invest in a variety of asset classes and in active and passive investment vehicles all over the world. “This gives small investors options that were previously only available to institutional and very wealthy investors,” explains Mugglin-Mooser.