Since its creation on 2 February 1997, the Ethos Foundation has often played a pioneering role in Switzerland, whether it was to raise awareness among financial players of ethical issues, to promote best practices in governance or to change the environmental and social practices of companies. 

On 2 February 1997, two Swiss pension funds – one public (CPEG) and one private (CPPIC) – joined forces to create the Ethos Investment Foundation. While sustainable finance was still in its premises, the objective was simple: to help long-term investors such as pension funds to invest in a sustainable and responsible manner. The Foundation's Charter also sets the promotion of a stable and prosperous socio-economic environment for current and future generations as one of its objectives.

At the end of its first year, the Ethos Foundation had 25 members and managed a portfolio of CHF 270 million of Swiss and European equities. A quarter of a century later, the funds labelled Ethos and the mandates that replicate its various stock market indexes represent more than CHF 3 billion. There are now 232 members, Swiss pension funds or public utility foundations only, for assets under management that exceeds CHF 330 billion in total (i.e., more than a quarter of the second pillar in Switzerland).

Visionary and determined

Since its creation, the Ethos Foundation has often played a pioneering role in Switzerland, whether it is to promote ethics within finance or to urge listed companies to improve their practices in terms of governance or social and environmental responsibility (ESG).

While the Foundation made a name for itself by opposing the UBS-SBS merger in 1998, rightly sensing a systemic risk for the financial centre, it also distinguished itself by opposing the combination of the functions of chairman/CEO in the largest Swiss companies (Nestlé, Credit Suisse, Zurich Insurance Group) or by defending the interests of small shareholders of Sika in a conflict which opposed part of the board of directors to the executive management.

Since 1997, the objective has remained to give shareholders more rights so that they can, in turn, encourage the companies they co-own to improve their ESG practices. This was the case in 2008 with the “Say on Pay” initiative, which was then embedded in the Minder initiative, which today allows shareholders to express their views on the amounts and systems of remuneration for the managers of listed companies. This was also the case in 2021 with the introduction of a vote on the climate strategy (“Say on Climate”) of Nestlé and Holcim, of which Ethos was also at the origin.

Dialogue as a mechanism for improvement

Over the past 25 years, the Ethos Foundation has also contributed to raising awareness among investors, and in particular pension funds, of numerous ESG themes. In addition to abusive remuneration and the separation of the functions of Chairman/CEO, we can cite climate change, the fight against deforestation, the defence of human rights in supply chains, fiscal responsibility or, more recently, the corporate digital responsibility. The Foundation has also always worked to request greater transparency from companies, particularly in the environmental and social field.

As the exercise of the right to vote is not always sufficient, Ethos has also set up engagement programs such as EEP Switzerland in 2004 and EEP International in 2016 to make companies aware of their social and environmental responsibility as well as good governance practices and to ensure that they improve their practices in this area. These two programs now have 156 and 84 members respectively.

Finally, when this dialogue did not lead to the expected results, Ethos never hesitated to intensify its shareholder engagement measures by mobilising, for example, other shareholders to file a resolution at a general meeting.

To celebrate its 25th anniversary, the Foundation will organise a conference devoted to the responsible and inclusive economy on 9 June in Bern, following its 2022 general assembly. An event focused on the economy for which Ethos has been committed for more than 25 years.