Canton of Zurich
Department for Economic Affairs
Office for Economy and Labour

Zurich Financial Centre
2023/2024
Monitor, Forecasts, Focus Sustainable FinanceExecutive Summary
The Zurich financial centre is the backbone of the Swiss financial centre as awhole and an important pillar of Zurich’s economy. The City of Zurich constitutes
the hub of the Zurich financial centre, by virtue of its high concentration of largebanks and insurance companies.
The focus of this publication is on sustainable finance at the ­Zurich financial centre ­­­­–­­a topic that, in light of the Paris Climate Goals and the UN Sustainable Development Goals, is becoming ever more significant. Given its ­importance, the Zurichfinancial centre plays a key role in positioning the Swiss financial centre as a global
leading location for sustainable finance.

Significance, Structure and Development of the Zurich Financial Centre
The Zurich financial centre is the backboneof the Swiss financial centre

The Zurich financial centre (consisting of the cantons of Zurich, Schwyz and Zug) is by far thelargest location for the finance industry in Switzerland. The 97,300 jobs (in full-time equivalents) pertaining to the financial centre generated gross value added in the amount of
CHF 29.9 billion in 2021. This corresponds to 42 per cent of jobs and 45 per cent of grossvalue added of the Swiss financial centre as a whole.

The Zurich financial centre is a central pillar of
Zurich’s economy

The financial sector is one of the most important sector groups in the Zurich region. In 2021,
companies pertaining to the Zurich financial centre provided one in ten jobs in the region andgenerated 16 per cent of regional economic output. Due to the financial centre’s job productivity, the share of jobs is lower than the value-added share.
Development, overall, of real gross value added of the financial sector was more dynamic
compared to that of the economy as a whole, especially during the pandemic years
2020/2021. The Zurich financial centre thus backed the economy of Zurich when economic
activities of many other sectors were constrained due to measures to combat the Covid
pandemic.

Development of real gross value
added of the financial sector
and the overall economy in
the Zurich region 2011–2021
Indexed, 2011 = 100
The index value for 2021 is shown
next to the sector group /subsector group designation

200
Other financial
services
190

180

160

Source: BAK Economics

Insurances
138
Financial sector
138
Banks
124
Overall economy
119

140

120

100

80
2011

2

2012

2013

2014

2015

2016

2017

2018

Zurich Financial Centre 2023  /2024 Executive Summary

2019

2020

2021

Job growth was below the aggregate average between 2011 and 2021. The number of jobs
increased in all three subsectors (banks, insurances, other financial services) of the financial
sector in 2020 and 2021. One of the reasons for this is that companies operating in the financial sector are expanding their IT areas on account of digitalisation, in order to stay competitive in the future as well.

The City of Zurich is the hub of the Zurich financial centre

The City of Zurich is the hub of the Zurich financial centre, by virtue of its high concentrationof large banks and insurance companies. This is especially true for banks, while insurancecompanies are also increasingly based in other districts of the canton as well. Financial­sector companies in the City of Zurich are of major significance for the urban economy,­generating 27 per cent of the city’s economic output in 2021. In none of the comparator­regions – inter alia Hong Kong, Luxembourg and Singapore as economies specialised in­financial services – is the significance of the financial sector greater for the respective local
economy.

Growth outlook marked by opposing developments

2022 has been characterised by differences in the development of the interest and the­commission business for banks. Whereas the interest rate hike had a positive effect on theinterest business, the assets under management declined as a consequence of the bearmarket. Overall, a slight growth in value added is expected for 2022 (0.3%) and for 2023
(0.7%). Backed by both business areas, value added growth is likely to be stronger in themedium term (Ø 2024–2028: 1.7%). Two opposing trends are also apparent with respect tojobs: whereas jobs are disappearing, inter alia due to cost-cutting programmes and a further
thinning out of branch networks, new jobs are being created in the field of IT. Overall, a slightdownward trend is expected for the forecast period (2022: 0.0%, 2023: –0.4%, Ø 2024–2028:–0.2%).
Despite higher claims payments due to inflation, a moderate increase in value added is­expected for insurances (2022: 1.5%, 2023: 1.5%). Demand for insurances is stable and, on
account of inflation and higher probability of extreme weather events, insurance premiums
are also increasing. Owing to, inter alia, general economic and population growth, development is likely to be more dynamic again in the medium term (Ø 2024–2028: 2.4%). It is to be
expected that insurances will create more jobs in the domains of digitalisation, regulationand sustainability, with overall job growth in the insurance industry slowing over time(2022: 1.6%, 2023: 1.3%, Ø 2024–2028: 0.8%).
The current decline in stock market prices is causing assets under management in the strong
fund industry to shrink as well. With respect to other financial services, job growth (2022:
3.3%, 2023: 2.7%, Ø 2024–2028: 1.1%) is supporting value-added development (2022: 0.6%,
2023: 1.0%, Ø 2024–2028: 2.1%), especially in the short term.

Zurich Financial Centre 2023  /2024

Executive Summary

3

The Zurich Financial Centre…
Zurich Financial Centre Monitor 2023/24… is the backbone of the Swiss financial centre(Share of the Zurich financial centre in the Swissfinancial centre)… is a central pillar of Zurich’s economy(Share of the Zurich financial centre in the Zurich
region in %)Gross value added

Gross value added

Jobs (FTE)

Jobs (FTE)
10 %

16 %
45 %

42 %

The Zurich financial centre is one of the mostimportant sector groups in the Zurich region.
The Zurich financial centre is by far the largest
financial centre in Switzerland.

Due to the Zurich financial centre’s high job
productivity, the share of jobs is lower than thevalue-added share.

… is geographically highly concentrated(Share in gross value added of the Zurich financial
centre in %)… is centred in the City of Zurich(Share in regional gross value added of the
Zurich financial centre in %)27 The significanceCity of Zurich

93
City of Zurich:
67
5
2

With a highconcentrationof large banks
and insurancecompanies,
the City of
Zurich is the
hub ofthe Zurichfinancialcentre.

29.9

CHF
billionreal value added

jobs in full-time
equivalents

Data for 2021

Banks
46
Insu­r­
ances
34

4

The largest share ofvalue added within the
Zurich financial centre
is generated by thesubsector Banks.
However, as well as
being a banking
centre, the Zurichfinancial centre is also
an internationallysignificant location for
the insurance
industry.

26

Luxembourg

97,300 FTE… is balanced in its sector structure(Share in gross value added of the Zurich financial
centre in %)Otherfinancialservices 19

Hong Kong

23

New York

20

London17

Zurich region

16

Singapore

16of the financial
sector in theCity of Zurich isgreater than in
economies
specialised infinancial services
such asHong Kong,­Luxembourg andSingapore.

… has experienced above-average growth(Ø annual growth rate in %, 2011–2021)
Growth of the financial sector has been more
dynamic than that of the economy as a whole, thus
backing the regional economy.
Zurich financial centre

Zurich region

3.1 %
1.7 %
0.7 %

Real
gross value
added

Jobs
in
FTE

Zurich Financial Centre 2023  /2024 Executive SummaryRealgross value
added

1.2 %

Jobs
in
FTE

Focus: Sustainable Finance
Increasing significance of sustainable finance

Sustainability in business is increasingly in focus with companies across all sectors of theeconomy. Drivers of this development are, inter alia, the Paris Climate Goals and the UN
Sustainable Development Goals, but also changed customer needs and legal parameters.
Given their intermediary role, finance companies can act as a catalyst in the transformation
towards a more sustainable economy.
The Swiss Federal Council, having recognised the significance and potential of sustainablefinance, formulated the goal whereby the Swiss financial centre is to become a global leading location for sustainable financial services. To that end, the Zurich financial centre has a
key role to play by virtue of its significance for the Swiss financial centre. According to Swiss
Sustainable Finance, the volume of sustainable investments in Switzerland amounted to
CHF 1,982.7 billion in 2021. Slightly more than half of that amount was attributable to companies within the Zurich financial centre.

Development of sustainable investments in Switzerland
in billion CHF
1’982.7

1’520.2

619.5

Development of sustainable
investments in Switzerland,
Asset Owners 2011–2021
Volume in billion CHF
Source: Swiss Sustainable Finance

1’163.3 555.9

716.6

41.2

47.6

56.1

71.1

2011

2012

2013

2014

2015

215.0

2016

470.7
2017

563.7

Mandates

694.5

799.5

Funds

2020

2021

269.8

208.9

390.6
141.7

483.7

2018

2019

The volume of sustainable funds
amounted to approx. CHF 800 billion at
the end of 2021 and thus made up
more than half of the total Swiss fundmarket (CHF 1,515 billion).

Sustainable investments by regions
Sustainable investments in­Switzerland by regions, 2021
Share in the total of sustainable
investments in Switzerland in %;volume in billion CHF
Source: Swiss Sustainable Finance

Other cantons

48%

Total:
CHF 1,982.7
billionZurich Financial Centre 2023  /2024

52%

Executive Summary

Zurich region:
CHF 1,038.9 billion

5Innovative, sustainable financial products and services

Many providers of financial products and services are already taking sustainability into
­account in some way. Therefore, an online survey was conducted to investigate ambitious
approaches and explore how widespread specific financial products and services with innovative sustainable approaches are. The survey was carried out in collaboration with Swiss
Sustainable Finance and took place between 27th September and 28th October 2022. Morethan 500 companies within the Zurich financial centre were invited to participate, of which
108 companies completed the survey. The results showed that several companies alreadyhave products/services with innovative sustainable approaches on offer.
Investment products with specific sustainability goals
Approximately every third company offers investment products for which quantitativeenviron­mental, climate or social goals have been set. Transparency as to the effect and­degree of goal achievement of the investment products is important in order to demonstrate
the benefits of the investments, as well as to increase visibility of financial flows. Seventy percent of these companies comply with this by informing their clients by way of annual reports.

Investment product themes(Share of companies who offer investment products in the … area in %)Investment productthemes, 2022

Funds with CO2 reduction path (climate)

Sources: BAK Economics,
Swiss Sustainable Finance

Renewable energy / energy efficiency

63%

Social themes

60%

Clean technologies

60%

70%

50%

Water supply / water technology
Land use / forestry / agriculture
Sustainable real estate

33%
23%

ESG commitment
43 per cent of the companies communicate directly with portfolio companies, to promote
activities that are in line with ESG (environmental, social, and corporate governance). Half ofthese companies have a company-internal team to conduct the business dialogue.
Sustainable bonds
One in four banks has already been involved as a lead or in a consortium for issuing sustainable bonds. While bonds to finance green projects (e.g. energy efficiency) are the most­frequent, there are also bonds used to finance social projects (e.g. affordable housing).
Sustainable loans
Consideration of sustainability aspects in the lending business occurs, on the one hand, aspart of the general credit assessment process and influences lending terms (e.g. interest-rateadvantages for mortgages for properties with a sustainability label). On the other hand,banks also offer sustainability-focused loans (inter alia, green, social or sustainability-linked
loans). The survey findings do not provide any consistent statements in regard to the offeringof sustainable corporate loans and mortgages.
Sustainable insurance products
Sustainability aspects in the insurance business are taken into account both in investment
activities and with insurance solution offerings that promote transformation towards a sustainable economy (inter alia, energy savings insurance). The survey findings do not provide
any consistent statements in regard to the offering of sustainable insurance products.

6

Zurich Financial Centre 2023  /2024 Executive Summary

Sustainable services of fintech companies
One in five fintech companies takes account of sustainability in the financial services it­provides. These services range from sustainability analyses and research, through digitalsolutions for sustainable investments, to green bank accounts.
University activities in the domain of sustainable finance
The universities in the Zurich region conduct research, teach and publish on sustainable­finance and thus make an important contribution. One university has a specific research
centre for sustainable finance.

University activities(Share of universities that pursue activity, in %)Research and publications (peer reviewed)
in the last five years

75%

Executive studies (CAS, MBA, continuing
education courses, etc.)

75%

Lectures in finance study programmes (compulsory orelective courses for Bachelor’s or Master’s students)

University activities,
2022
Sources: BAK Economics,
Swiss Sustainable Finance

50%

Professorship or associate/assistant professorship

25%

Centre or specific research units

25%

Studies on behalf of third parties (applied projects)

25%

Stronger market position through sustainable financeIn light of the growing significance of achieving the Paris Climate Goals and the UN Sustainable Development Goals, the potential for development of sustainable finance is c
­ onsiderable.
That being said, there is still room to exploit this potential, with impetus coming from d­ emandside: customers increasingly want sustainable financial products and services. This is also
reflected in the fact that every second company sees sustainable finance as an opportunity
to strengthen their reputation as well as to gain customer loyalty and attract new customers.
What sustainability measures are already being implemented by your company?
(Without public sector institutions/universities)
yesnoConsideration of ESG criteria within
the company

66%

34%

Promotion of ESG skills among
employees

51%

49%

Company has sustainable products orservices on offer

48%

52%

Signing of sustainability
initiatives*
Sustainability reporting (e.g. pursuant
to Global Reporting Initiative)

36%
25%

Sustainability measures, 2022
Sources: BAK Economics,
Swiss Sustainable Finance

64%
75%

Net zeroalliance

12%

88%

Participation in tests for climate
compatibility (PACTA)*

11%

89%

* Fintech and service providers in the domain of sustainable finance are not included.

Zurich Financial Centre 2023  /2024

Executive Summary

7

However, companies also face challenges. Half of the surveyed companies rate the­increasingly more complex political situation and the regulatory parameters prescribed by
the Swiss Confederation and the European Union (EU) as challenging or very challenging. It
is worth mentioning that Switzerland has hitherto also relied more heavily on ­principles-based
specifications, especially by comparison with the EU. Furthermore, four out of ten of thesurveyed companies rate the growing demand for transparency of climate risks and sustainability measures as challenging or very challenging. Therefore, it is important to have approved standards in place to ensure credibility.

How challenging are the following aspects in connection with sustainable finance?
(Without public sector institutions / universities)
Challenges in connection withsustainable finance, 2022
Subject to possible
rounding differences
Sources: BAK Economics,
Swiss Sustainable FinanceVerychallenging

General political andregulatory parameters

Challenging

19%

36%

Disclosure of climate risks andsustainability reporting

13%

27%

Credibility (avoidance ofgreenwashing)

13%

27%

Recruiting ofskilled staff

12%

Price and competitive pressure
6%(inter alia, innovation)

Fairlychallenging

24%
27%

Unchal­Fairlyunchallenging lenging

20%
28%
20%

16%
14%

17%

9%

18%
24%

25%

22%

19%

28%

18%

20%

City and Canton of Zurich as facilitators

The majority of the surveyed companies feel fairly well connected or well-connected within
the Zurich financial centre with respect to sustainable finance. Room for improvement interms of networking is mostly seen and desired with science and research, with other companies, and for legal and regulatory questions.
Promotion of sustainable finance at the Zurich financial centre and networking between key
players could also be facilitated through giving visibility on a platform, through regular sharing of ideas within a conference setting, and through data gathering and publications. All
three measures are seen as helpful by the majority of companies that participated in thesurvey.
The City and the Canton of Zurich act as facilitators to advance sustainable development
within the financial centre and to root it even more firmly in Zurich. Thus, with Innovation
Zurich, the Division of Business and Economic Development of the Canton of Zurich ­operates
a platform that focuses on making companies and organisations in the innovation environment visible, and on connecting them with each other. Furthermore, the cantonal Division ofBusiness and Economic Development is a founding partner of Swiss Sustainable Financeand a location partner of the Impact Finance Conference, which will be held in Zurich in July
2023 and aims to support the strategic positioning of a responsible financial centre.
The Office for Economic Development of the City of Zurich is also a founding partner of
Swiss Sustainable Finance and organises an annual event to promote dialogue between
representatives from the Zurich financial centre, the City of Zurich, the Canton of Zurich, theSwiss Confederation and the Swiss National Bank. In 2022, the City of Zurich’s Office for
Economic Development also organised a “contact lunch” at which representatives from thesustainable finance industry had the opportunity to interact with the City Council and withmembers of the city administration.

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Zurich Financial Centre 2023  /2024 Executive SummaryPublishing Details
Published by
Department for Economic Affairs of the Canton of Zurich
Office for Economy and Labour
Division of Business and Economic Development
Project Coordination
Eva May (Project Manager)
Division of Business and Economic Development Canton of Zurich
CH-8090 Zurich
Tel. +41 44 259 26 52
eva.may@vd.zh.ch
Jacqueline Kaiser
Office for Economic Development City of Zurich
CH-8001 Zurich
Tel. +41 44 412 37 41
jacqueline.kaiser2@zuerich.ch
Project Realisation Monitor and Focus
BAK Economics AG
CH-4053 Basel
Tel. +41 61 279 97 00
Info@bak-economics.com
www.bak-economics.com
Michael Grass
Sebastian Schultze
Alexandra Zwankhuizen
Project Realisation Focus
Swiss Sustainable Finance
CH-8001 Zurich
Tel. +41 44 515 60 50
info@sustainablefinance.chwww.sustainablefinance.ch
Sabine Döbeli
Dr. Hendrik Kimmerle
Photographs (copyright / right of use)
Zürich Tourismus
Design and Print
kdmz
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Zurich Financial Centre 2023  /2024

Executive Summary

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Zurich Financial Centre 2023  /2024 Executive Summary