Author: Marion Ronca

In recent years, the Swiss National Bank has repeatedly faced accusations that it is investing its money in environmentally harmful funds. Others argue that climate policy is not the responsibility of a central bank. Its role, they contend, is to focus on its core mandate, namely to maintain price and financial stability. What is clear is that since the adoption of the Federal Act on Climate Protection Goals, Innovation and Strengthening Energy Security in 2024, both private companies and public sector organisations have been obliged to contribute to the goal of achieving climate neutrality by 2050. 

In the debate surrounding the Swiss National Bank’s role in climate policy, it was initially overlooked that price and financial stability cannot be achieved without taking sustainability into account. Extreme weather drives up prices. New legislation requiring a shift in production methods results in so-called transition costs. And environmental misconduct can cause lasting damage to a company’s reputation. 

Today, sustainability concerns everyone, including the financial sector. The Sustainable Digital Finance project, launched in spring 2025 by the Digitalization Initiative of the Zurich Higher Education Institutions (DIZH), addresses precisely this issue. Its aim is to create a framework for developing digital financial solutions that take all aspects of sustainability into account. The focus therefore lies not only on environmental considerations, but also on the social and economic challenges involved in financing a future worth living for everyone.

Science, business and policymaking in dialogue

Sustainable Digital Finance is a so-called DIZH structure. It was established as part of the DIZH to promote collaboration in the field of digitalisation and to strengthen Zurich’s position as a centre of research and business. In addition to the project initiators, the ZHAW and the University of Zurich, the project brings together stakeholders from the worlds of academia, business and policymaking: the Green Fintech Network and the innovation hub Trust Square Ecosystem Ltd, as well as Swiss Life and The Hashtag Group as representatives of the financial sector.

Beat Affolter, a Professor of Corporate Finance specialising in sustainability and innovation, developed Sustainable Digital Finance together with Alexander Posth, a Professor at the ZHAW, and Thomas Puschmann, who heads the Swiss FinTech Innovation Lab at the University of Zurich. “We knew each other through the Green Fintech Network and are working on similar issues relating to a sustainable, innovation-driven financial sector. When the call for proposals from the DIZH was announced, our idea was a perfect fit,” explains Beat Affolter.

Three labs and plenty of discussion

Solutions for a sustainable financial sector should be as practical as possible. The project management team, which also includes ZHAW economist Niccole Jordan, has structured the work around three different labs. “In the research labs, we want to establish the scientific foundations. In the ideation labs, we develop innovative concepts, which we then test promptly in the policy and implementation labs, taking the relevant regulatory frameworks into account,” says Jordan.

Collaboration with industry partners began in 2025 with a summer school programme. “Together with our partners from industry, we have worked on a number of challenges. We deliberately call them challenges rather than problems, as we are convinced that specific issues offer great potential for innovation,” explains Jordan. The group has already achieved a breakthrough: “Swiss Life Asset Management AG brought one of those challenges to us. A group of students were able to help the company by developing a solution on site,” says Jordan.

Next on the agenda is a matchmaking event bringing together start-ups and financial firms. These events are important for the research process, as they allow the project leaders to learn a great deal about the needs of the business community and about new ideas from the fintech sector: “These events allow us to consider and align new solutions, scientific findings and regulatory issues simultaneously. They provide a platform for highly dynamic and innovative moments,” says Beat Affolter.

AI, blockchain or perhaps big data?

The use of digital technologies plays a critical role in the development of new sustainable financial solutions. On the one hand, new technologies such as AI, blockchain and big data hold out the promise of delivering compelling solutions. On the other hand, they themselves represent a challenge on the path towards a sustainable future. The computing power required by these technologies is, in fact, highly energy- and resource-intensive. “When developing solutions, it is important to keep the specific potential of the technology in mind while also taking account of its impact on sustainability,” explains Beat Affolter. 

“The aim of Sustainable Digital Finance is to enable companies to gain a comprehensive understanding of sustainability in all its dimensions,” explains Niccole Jordan. According to the economist, certain solutions, such as investments marketed as ESG funds, are not inherently sustainable. What they can do, however, is create transparency with regard to environmental and social practices as well as corporate governance. And that is precisely what sustainability is about: realising what kind of future we are shaping with the decisions we make today.