Swiss National Bank Disposes of Shares in Chevron Corporation
In the face of growing global concerns about climate change, central banks, including the Swiss National Bank (SNB) and the European Central Bank (ECB), are under increasing pressure to divest from fossil fuel industries. This pressure stems from the conflict between continued financing of fossil fuel companies and the global commitment to limiting global warming to 1.5°C.
The SNB, as the central bank and macroprudential regulator of Swiss financial markets, holds a significant influence over the country's financial markets. However, its role as a central bank prevents it from investing in stocks of systemically important banks worldwide, including fossil fuel companies.
Recent developments suggest that the SNB may be responding to growing political pressures to divest from fossil fuels. For instance, the SNB's decision to sell its stake in Chevron could be a sign of this shift. The SNB's investment policy is guided by the fundamental norms and values of Switzerland, ensuring that its investments are as broadly diversified as possible and do not support companies whose products or production processes significantly violate societal values.
The SNB's decision to sell its Chevron stake might not be an isolated incident. Central banks, including the SNB and the ECB, are facing growing public pressure to consider their fossil fuel exposure. This pressure is driven by several key reasons.
Firstly, financial institutions, including central banks, are urged to tighten their divestment policies to ensure no financing goes towards new or existing coal plants and fossil fuel projects unless they strictly comply with environmental safeguards and demonstrate necessity as transition bridges to renewables.
Secondly, fossil fuel investments are increasingly seen as poor financial choices. The drop in oil prices and coal consumption globally has made fossil fuels less profitable, with some pension funds losing billions by remaining invested in the sector, highlighting a financial risk for institutions not divesting.
Thirdly, there is a growing concern about credibility and greenwashing issues. Despite claims of supporting net-zero pledges, many financial institutions continue to invest heavily in fossil fuel companies, sometimes even through so-called “green” investment funds. This inconsistency damages their credibility and increases public and stakeholder pressure to divest genuinely.
Fourthly, there is a moral and social imperative to stop funding the climate crisis. Fossil fuel financing directly exacerbates global warming, and financial institutions are being urged to redirect investments into renewable energy and climate-resilient projects to facilitate a just transition and climate adaptation.
Lastly, reports indicate a paradox where, even as some banks retreat from climate alliances, fossil fuel financing has risen substantially, drawing calls for accountability and systemic change within financial institutions, including central banks.
The SNB's balance sheet consists of several hundred billion Swiss francs, primarily due to growing investor demand for the franc as a safe-haven asset. As of Q1 2025, the SNB continues to hold a $1.4bn stake in Exxon, but it is worth noting that the SNB does not comment on individual stock-picking decisions.
The ECB, on the other hand, has added nine fossil fuel companies, including Total, BP, and Eni, to its guarantees system. This move has drawn criticism and calls for the ECB to reconsider its fossil fuel investments in light of the growing pressure to align with climate goals.
The information about the SNB's holdings was first reported in the Swiss newspaper Neue Zürcher Zeitung. As the debate surrounding central banks' fossil fuel investments continues, it is likely that we will see more changes in the near future as these institutions grapple with their role in financing the transition to a low-carbon economy.
The SNB's decision to sell its stake in Chevron could be a sign of its response to growing political pressure to divest from fossil fuels, as the central bank's investment policy is guided by the fundamental norms and values of Switzerland, ensuring that its investments do not support companies whose products or production processes significantly violate societal values.
Financial institutions, including central banks like the SNB and the ECB, are urged to tighten their divestment policies to avoid financing new or existing coal plants and fossil fuel projects, unless they strictly comply with environmental safeguards and demonstrate necessity as transition bridges to renewables, due to the growing public pressure to consider their fossil fuel exposure.
