One of the goals of the Paris Agreement is to make financial flows consistent with a low-carbon pathway. This report measures the alignment of Liechtenstein's financial sector with climate objectives, as part of the PACTA 2020 coordinated climate assessments. In this report, the test was coordinated internationally, as part of a wider effort to standardise the measurement of monitoring of the financial sector's contribution to the Paris climate goals.
This report also analyzes over 77,000 individual holdings from more than 100 equity and corporate bond portfolios held by Liechtensteiner financial institutions. The analysis found that participating financial institutions’ investments in certain sectors are still not aligned with a Paris-compatible pathway, though engagement with investees on climate issues is growing.
According to the qualitative survey of participating financial institutions, 88% of respondents reported that their organization had a climate-related target or was in the process of developing one. This compares to 69% percent of respondents in Switzerland who reported a climate strategy. The climate strategies most frequently employed by participants include engagement, coal exclusion policies, exercising voting rights, and best-in class investing. However, all the financial institutions that reported a coal exclusion policy still had holdings in coal mining or coal power.