Engagement
SECO's engagement on climate change
The consequences of climate change – droughts, storms and flooding – have a devastating impact on human well-being and economic goals. Developing countries are particularly vulnerable. If nothing is done, climate change will push more than 100 million people into poverty by 2030, wiping out many hard-won development gains.
Françoise Salamé Guex
Head Climate Network SECO
Sustainable economy
SECO supports developing countries in the transition to a low-carbon and resilient economy. It systematically considers climate risk and ways to reduce greenhouse gas emissions in its activities. Together with its partners, SECO mobilizes private sector investment in climate-friendly projects.
SECO supports developing countries in the transition to a low-carbon and resilient economy. It systematically considers climate risk and ways to reduce greenhouse gas emissions in its activities. Together with its partners, SECO mobilizes private sector investment in climate-friendly projects.
Cities
Sustainable urban growth
Sustainable transport
Traffic accounts for over a third of all pollution in towns and cities. SECO works with urban planners to develop smart growth strategies that encourage the use of public transport and non-motorised mobility. With these options, people can go about their business quickly and efficiently without harming the environment.
Sustainable energy supply
The most important cause of greenhouse gases is the supply of energy to the population and the economy. SECO supports cities in dealing with energy sustainably, using it more efficiently and supporting renewable energy. In particular, this involves feeding large quantities of solar and wind energy back into the power grid and promoting hydropower as a sustainable solution.
The most important cause of greenhouse gases is the supply of energy to the population and the economy. SECO supports cities in dealing with energy sustainably, using it more efficiently and supporting renewable energy. In particular, this involves feeding large quantities of solar and wind energy back into the power grid and promoting hydropower as a sustainable solution.
Climate-related risks
Most cities are located near rivers or on the coast. This makes them vulnerable to the kind of extreme weather events caused by climate change, which can often trigger massive economic losses and poverty.
Most cities are located near rivers or on the coast. This makes them vulnerable to the kind of extreme weather events caused by climate change, which can often trigger massive economic losses and poverty.
Disaster risk reduction
SECO helps partner cities prepare for, withstand and recover from potential disasters. It helps authorities plan the development of their cities in a risk-calculated way. And it supports them in providing their populations with a continuous supply of water and energy and in disposing of their wastewater.
More information: Urban development and infrastructure services
SECO helps partner cities prepare for, withstand and recover from potential disasters. It helps authorities plan the development of their cities in a risk-calculated way. And it supports them in providing their populations with a continuous supply of water and energy and in disposing of their wastewater.
More information: Urban development and infrastructure services
Resources
Efficient use of resources
Sustainable production
SECO has for many years advocated a greener and more sustainable production of industrial and agricultural goods in developing countries. Through its various projects, it encourages small and medium-sized enterprises to scale back their use of energy, water and other resources. This makes manufacturers not only more ecological but also more productive and often more competitive.
Favourable legal framework
SECO advises governments on creating suitable legal frameworks for manufacturers to conserve resources and energy.
SECO also helps partner countries set up carbon pricing mechanisms, such as a carbon tax or an emissions trading system.
SECO advises governments on creating suitable legal frameworks for manufacturers to conserve resources and energy.
SECO also helps partner countries set up carbon pricing mechanisms, such as a carbon tax or an emissions trading system.
Sustainable value chains
SECO works with partner countries to establish sustainable value chains that will protect natural resources. For example, it advises cocoa and coffee farmers on adapting production practices to the impacts of climate change. Farmers and their social communities can thus better withstand crises and become more resilient.
More information: Integration in value chains
SECO works with partner countries to establish sustainable value chains that will protect natural resources. For example, it advises cocoa and coffee farmers on adapting production practices to the impacts of climate change. Farmers and their social communities can thus better withstand crises and become more resilient.
More information: Integration in value chains
Investments
Sustainable investments
Promoting ESG criteria
Sustainability has become an important investment theme, with the focus on the three ESG dimensions: environment, social and governance. SECO sees ESG criteria as key to long-term business success and advocates their application throughout the market.
Preservation of biodiversity
Actions taken to protect biodiversity, for example, can benefit a wide range of services and businesses with no obvious connection – such as a hotel catering for divers at a nearby coral reef, or farms that could not exist without insect pollination. This was the thinking behind ENCORE, a tool SECO was involved in developing which helps banks understand how they can align their lending and investment portfolio with biodiversity risks.
Actions taken to protect biodiversity, for example, can benefit a wide range of services and businesses with no obvious connection – such as a hotel catering for divers at a nearby coral reef, or farms that could not exist without insect pollination. This was the thinking behind ENCORE, a tool SECO was involved in developing which helps banks understand how they can align their lending and investment portfolio with biodiversity risks.
Private capital for climate investments
SECO is committed to ensuring that private funds are invested in sustainable and climate-friendly projects in developing countries via the capital market. So-called "green bonds" play a central role in this. Their issuers are obliged to finance environmental and climate protection measures with the funds received.
SECO is committed to ensuring that private funds are invested in sustainable and climate-friendly projects in developing countries via the capital market. So-called "green bonds" play a central role in this. Their issuers are obliged to finance environmental and climate protection measures with the funds received.
Promoting green bonds
For example, SECO is involved in the World Bank's Emerging Green One fund, which promotes green bonds in developing countries. Through the Climate Bonds Initiative, it also supports international standards for green bonds to promote transparency for investors and reduce transaction costs.
For example, SECO is involved in the World Bank's Emerging Green One fund, which promotes green bonds in developing countries. Through the Climate Bonds Initiative, it also supports international standards for green bonds to promote transparency for investors and reduce transaction costs.
Impact investing
SECO also promotes impact-oriented investments (impact investing). In addition to a financial return, these should also achieve a measurable social and environmental impact. The development finance institution of the Swiss Confederation SIFEM, established by SECO, plays a key role in promoting impact investing.
More information: Access to financing
SECO also promotes impact-oriented investments (impact investing). In addition to a financial return, these should also achieve a measurable social and environmental impact. The development finance institution of the Swiss Confederation SIFEM, established by SECO, plays a key role in promoting impact investing.
More information: Access to financing
Finance
Climate-friendly finance
Stabilizing public finances
Given the increased frequency and severity of natural disasters, climate change poses risks to the stability of a country's public finances. What's more, a higher risk of natural disasters weakens a country's financial standing, making it more expensive to raise capital.
Analysis of financial risks
At the same time, many countries are still spending significant amounts on climate-harming subsidies, especially for fossil fuels. Even without subsidies, market prices are often too low as they do not reflect the true cost to society when the external costs of pollution and global warming are factored in. This is economically inefficient.
Climate change also poses serious challenges for the financial sector itself. Financial institutions that invest in outdated, climate-damaging technologies risk major losses in value. In addition, lenders lose out when customers disrupted by climate change default on repayments.
At the same time, many countries are still spending significant amounts on climate-harming subsidies, especially for fossil fuels. Even without subsidies, market prices are often too low as they do not reflect the true cost to society when the external costs of pollution and global warming are factored in. This is economically inefficient.
Climate change also poses serious challenges for the financial sector itself. Financial institutions that invest in outdated, climate-damaging technologies risk major losses in value. In addition, lenders lose out when customers disrupted by climate change default on repayments.
Managing risks
SECO supports partner countries assess and manage the financial risk of natural disasters, for example through reserve funds or insurance solutions. It also works with them in making their public finances more climate-friendly. For example, by disclosing climate-relevant information in budget planning and including environmental criteria in the public procurement process and the awarding of public contracts.
SECO also advocates including climate-relevant criteria in public financial management. This creates incentives for ministries of finance to address climate change.
SECO supports partner countries assess and manage the financial risk of natural disasters, for example through reserve funds or insurance solutions. It also works with them in making their public finances more climate-friendly. For example, by disclosing climate-relevant information in budget planning and including environmental criteria in the public procurement process and the awarding of public contracts.
SECO also advocates including climate-relevant criteria in public financial management. This creates incentives for ministries of finance to address climate change.
Environmentally-friendly products
Finally, SECO helps governments in verifying the quality of climate-relevant financial products on the market and launching their own such products, e.g. green bonds. It also works with central banks to analyse the impact of climate change on monetary policy and financial sector stability and use the findings as a basis for further measures.
More information: Growth-promoting economic policy
Finally, SECO helps governments in verifying the quality of climate-relevant financial products on the market and launching their own such products, e.g. green bonds. It also works with central banks to analyse the impact of climate change on monetary policy and financial sector stability and use the findings as a basis for further measures.
More information: Growth-promoting economic policy
Multilateral
Multilateral engagement
Cooperation with development banks
Global challenges such as climate change need a multilateral response. SECO therefore supports the climate commitment of multilateral development banks. These play a key role in the fight against climate change.
SECO helps to develop climate strategies and ensure that the private sector is more involved in climate programs. It encourages the development banks to work towards the Paris Agreement goals and invest only in sustainable and climate-friendly projects.
Towards the energy transition
The biggest source of greenhouse gases worldwide is the energy sector. This is why SECO works with multilateral development banks to supply homes and businesses with reliable, climate-friendly energy.
SECO helps to develop energy strategies and programs to promote renewables and use energy more efficiently. Moreover, SECO played a role in ensuring that the multilateral development banks no longer finance coal-fired power plants, support gas energy only on an exceptional basis, and are opening up new solar and wind energy markets in many developing countries.
In 2020, the multilateral development banks invested over USD 22 billion in renewable energy.
The biggest source of greenhouse gases worldwide is the energy sector. This is why SECO works with multilateral development banks to supply homes and businesses with reliable, climate-friendly energy.
SECO helps to develop energy strategies and programs to promote renewables and use energy more efficiently. Moreover, SECO played a role in ensuring that the multilateral development banks no longer finance coal-fired power plants, support gas energy only on an exceptional basis, and are opening up new solar and wind energy markets in many developing countries.
In 2020, the multilateral development banks invested over USD 22 billion in renewable energy.
Sustainable and green economic growth after Covid-19
Within a year of the outbreak of the COVID-19 pandemic, the multilateral development banks launched programs worth more than USD 260 billion for health and economic measures in developing countries.
The development banks are promoting sustainable, low-emission economic growth so that countries can achieve the Sustainable Development Goals in the post-pandemic world. This requires competitive businesses and less inequality. The poorest and most vulnerable population groups must also be able to participate.
Together with the development banks, SECO supports countries achieve net-zero emissions and prepare for future crises, particularly the impacts of climate change.
More information: Multilateral cooperation
Within a year of the outbreak of the COVID-19 pandemic, the multilateral development banks launched programs worth more than USD 260 billion for health and economic measures in developing countries.
The development banks are promoting sustainable, low-emission economic growth so that countries can achieve the Sustainable Development Goals in the post-pandemic world. This requires competitive businesses and less inequality. The poorest and most vulnerable population groups must also be able to participate.
Together with the development banks, SECO supports countries achieve net-zero emissions and prepare for future crises, particularly the impacts of climate change.
More information: Multilateral cooperation
Françoise Salamé Guex
Head Climate Network SECO
Climate-relevant expenditures
In 2021, SECO's Economic Cooperation and Development division financed climate-relevant projects in its partner countries for a total of CHF 111 million. This equates to more than a third of the division's annual expenditure.
Climate-relevant spending is calculated according to the OECD-DAC guidelines on the Rio Conventions. These determine which projects contribute to combating climate change and to what extent. A distinction is made between projects that mitigate the impacts of climate change and those which help countries adapt to the consequences.
Mitigation measures include, for example, switching to renewable energy sources, sustainable energy concepts or sustainable forest management. Adaptation measures include insurance and early warning systems or the provision of shelters.
Climate-relevant spending is calculated according to the OECD-DAC guidelines on the Rio Conventions. These determine which projects contribute to combating climate change and to what extent. A distinction is made between projects that mitigate the impacts of climate change and those which help countries adapt to the consequences.
Mitigation measures include, for example, switching to renewable energy sources, sustainable energy concepts or sustainable forest management. Adaptation measures include insurance and early warning systems or the provision of shelters.
Resource-efficient industrial parks
With the Global Eco-Industrial Parks Programme, SECO is helping to ensure that industrial parks use fewer resources and that affiliated companies take better environmental and social standards into account. The program operates in Colombia, Egypt, Indonesia, Peru, South Africa, Ukraine, and Vietnam, working together with park management, affiliated companies and the government agencies involved.
Industrial parks cluster a variety of different manufacturing and service companies in one location. They are widespread in many developing and emerging countries and play an important economic role. But they are often inefficient in terms of production and resource use.
The programme helps existing industrial parks transition to 'eco-industrial parks'. The companies in eco-industrial parks adhere to common standards for their use of resources and environmental performance. This reduces their ecological footprint and improves the park's overall productivity.
Scroll up
Scroll left
Scroll right
Scroll down
The programme works with affiliated companies to identify ways to conserve resources. It also seeks synergies between companies. For example, heat from one company's production process could be used to heat a greenhouse elsewhere in the park.
The park management ensures affiliated companies have the infrastructure and organisational framework needed for greater resource efficiency. The programme supports management in identifying potential improvements and new solutions. For example, this could be the park's own wastewater treatment plant, a sustainable means of generating electricity, or an internal transportation service for the park.
The programme also advises governments on creating a legal framework to encourage resource-efficient production. More and more governments are asking for technical support in the areas of climate and resource efficiency in order to comply with international agreements, such as the Paris Agreement in the area of climate or the Sustainable Development Goals.
More information: Global Eco-Industrial Parks Programme
Solar revolution in the Egyptian desert
There are few places in the world as barren as Egypt's southern desert. But this is where Benban Solar Park opened in 2019: the largest solar power plant in Africa and one of the largest in the world. Spread over 37 square kilometres, it provides clean energy for more than 400,000 households. It also powers a large number of businesses, boosting the regional economy.
With the region now far less reliant on fossil fuels, Benban will help avoid up to two million tonnes of greenhouse gas emissions a year.
The solar park also creates employment, offering some 4,000 long-term jobs for the local community. This is vital in southern Egypt, where unemployment is rampant among young people.
A number of multilateral development banks supported Benban Solar Park, including the European Bank for Reconstruction and Development and the World Bank Group. These multilateral partners of SECO are leaders in financing solar projects in developing countries.
A large number of companies and some 9,000 people worked on what was Egypt's largest construction site. One important goal of the project was to familiarise workers with international labour, environmental, and health and safety standards and enforce these throughout.
For example, it had to be ensured that no children or youths worked on the construction site, that the greatest possible safety precautions were taken, that medical care was guaranteed, that sufficient clean water and sanitary facilities were available, and that waste was handled carefully. The development banks worked hand in hand with the companies and government agencies involved.
More information: Benban solar power plant
More information: Benban solar power plant
Sustainable wastewater treatment in Kocani
For more than 20 years, SECO has supported water supply and wastewater projects in North Macedonia. Waterworks and wastewater treatment facilities need vast amounts of energy, in turn producing high levels of greenhouse gas emissions. The situation is particularly acute in North Macedonia, where around 70 percent of energy comes from fossil fuels.
The Kocani wastewater treatment plant – funded by SECO and designed together with Swiss experts – serves some 65,000 local inhabitants. The plant generates power from sewage sludge converted into biogas and from solar energy, covering around three quarters of its energy needs with renewables. This reduces not only the level of greenhouse gas emissions but also the plant's operating costs.
North Macedonia enjoys ample sunshine with ideal conditions for solar power. This is now being used for the first time at a wastewater treatment facility in the Kocani region. The solar panels produce up to 300 kilowatts of power, at times covering the plant's entire energy needs in the summer.
At the same time, sewage sludge is fermented to produce large quantities of biogas, which is then converted into electricity and heat.
The Kocani region has long been known for its rice cultivation. Although it is prohibited, until now the rice fields were mostly burned after harvest. This led to a loss of biodiversity and soil fertility, air pollution and CO2 emissions.
Today, the rice straw is collected after harvesting and composted in the wastewater treatment plant together with dried sewage sludge. The result is a cheap compost fertiliser for local farmers. This solution also keeps the sewage sludge out of landfills, which would otherwise release climate-warming methane into the atmosphere.
More information: Kocani Waste Water Treatment Project
Today, the rice straw is collected after harvesting and composted in the wastewater treatment plant together with dried sewage sludge. The result is a cheap compost fertiliser for local farmers. This solution also keeps the sewage sludge out of landfills, which would otherwise release climate-warming methane into the atmosphere.
More information: Kocani Waste Water Treatment Project
Climate-friendly public finances
What are our taxes and duties used for? The answer can often be found in ministries of finance. Under the supervision and guidance of parliament and the government, these ministries play a key role in determining how a state collects, manages and spends money.
SECO developed the Mainstreaming Climate Change in Public Financial Management programme to incorporate climate aspects in projects with finance ministries. In order to reach a critical mass, SECO co-developed the programme with the World Bank, which supports reform projects with ministries of finance in practically all developing countries.
Let's see this programme in action, taking three examples:
Let's see this programme in action, taking three examples:
1. Climate-friendly state budget in Bhutan
How a state manages its revenues and expenditure is, to a large extent, determined by the public budget. The SECO-World Bank programme makes recommendations on how to integrate the impacts of climate change into governments' planning and budgeting.
For example, Bhutan is now for the first time reporting climate-relevant expenditures in its national budget. In the next stage, the programme will help Bhutan adopt a climate lens to all government spending. The outcome will then be mainstreamed in the national budget as a basis for parliament and the ministry of finance to assess how their budget decisions affect climate goals.
How a state manages its revenues and expenditure is, to a large extent, determined by the public budget. The SECO-World Bank programme makes recommendations on how to integrate the impacts of climate change into governments' planning and budgeting.
For example, Bhutan is now for the first time reporting climate-relevant expenditures in its national budget. In the next stage, the programme will help Bhutan adopt a climate lens to all government spending. The outcome will then be mainstreamed in the national budget as a basis for parliament and the ministry of finance to assess how their budget decisions affect climate goals.
2. Local government reforms in Kenya
Supported by the SECO-World Bank programme, all 47 administrative districts in Kenya assessed their climate change preparedness and where action is needed. On this basis, recommendations were made for public finance reform and disaster risk management. In a series of training sessions, the recommendations were discussed with over 150 local decision-makers to identify ways of implementing the reforms.
3. Climate-friendly public procurement
Some USD 11 trillion, or 12 percent of global GDP, is spent on public procurement worldwide. These contracts have a huge influence on the economy but also on the environment. As part of the SECO-World Bank programme, new climate indicators were formulated for public procurement.
Over 150 countries were then assessed against the indicators and the results posted online, giving countries an indication of how they rank internationally and how they can improve. Detailed recommendations for greener public procurement systems were also published.
More information: Mainstreaming Climate Change in Public Financial Management
Some USD 11 trillion, or 12 percent of global GDP, is spent on public procurement worldwide. These contracts have a huge influence on the economy but also on the environment. As part of the SECO-World Bank programme, new climate indicators were formulated for public procurement.
Over 150 countries were then assessed against the indicators and the results posted online, giving countries an indication of how they rank internationally and how they can improve. Detailed recommendations for greener public procurement systems were also published.
More information: Mainstreaming Climate Change in Public Financial Management
Investing in South-African solar energy
Companies need sound and long-term financing solutions. Then they can invest, tap into new markets, and create decent jobs.
But in developing countries, it is often difficult for companies and SMEs in particular to obtain financing. That is why SECO provides companies with capital and technical expertise and trains local banks in lending. SECO cooperates with SIFEM, the development finance institution of the Swiss Confederation created in 2011. SIFEM provides established and economically viable SMEs with expertise and reliable, long-term equity investments and loans at affordable terms.
In South Africa, coal-fired power stations generate 90 percent of the electricity. This results in high CO2 emissions. As energy demand increases, the power plants have too little capacity, which repeatedly leads to power outages throughout the country.
While electricity cost in South Africa have increased by more than 300 percent in the last 10 years, the cost of solar photovoltaic energy is falling. This is making solar power increasingly attractive to commercial and industrial users, in turn promoting a climate-friendly economy. However, it is difficult for South African SMEs to finance their own solar installations.
That is why SIFEM invests in the photovoltaic company SolarAfrica via a fund. The company offers customers modern financing solutions for solar panels on their roofs. SolarAfrica handles the procurement and installation of the panels including commercial operation, monitoring and maintenance. The company concludes power purchase agreements with its customers. They pay only for the quantity of energy actually used and save up to 40 percent in comparison with the electricity rates of the local energy providers. SolarAfrica has installed more than 34,000 solar collectors to date.
Swiss Investment Fund for Emerging Markets SIFEM
Swiss Investment Fund for Emerging Markets SIFEM
One of SolarAfrica’s customers is the Apollo Hotel near Johannesburg.
«SolarAfrica always offers electricity rates that are lower than those of the public utility company. And we have absolutely zero investment costs.»
Jeffrey Hurwitz, Hotel Director
More information: SolarAfrica
«SolarAfrica always offers electricity rates that are lower than those of the public utility company. And we have absolutely zero investment costs.»
Jeffrey Hurwitz, Hotel Director
More information: SolarAfrica
Städteenwicklung
Mit der Gondel staufrei durch Bogotá
Durch Kolumbiens Hauptstadt führt seit 2019 eine vom SECO unterstützte Seilbahn, die als öffentliches Verkehrsmittel dient. Sie stimuliert auch das soziale und wirtschaftliche Leben. Über fast dreieinhalb Kilometer verbindet die TransMiCable Ciudad Bolívar, eine einkommensschwache Gegend im Südwesten, mit einer Hauptverkehrs-Buslinie in San Cristóbal im Südosten Bogotás.
Die TransMiCable ermöglicht es mehr als einer halben Million Anwohnern, sich zeitsparend in ihrer Stadt zu bewegen. Sie verkürzt die Fahrt zu Arbeitsplätzen und öffentlichen Dienstleistungen im Zentrum um rund 80 Prozent auf noch gut 13 Minuten. In den ersten drei Betriebsmonaten beförderte die Seilbahn mehr als 1,8 Millionen Passagiere. Die TransMiCable ersetzt rund 110 Busse und verringert so nicht nur die chronische Überlastung der städtischen Strassen, sondern auch den CO2-Ausstoss.
Das Seilbahnprojekt generiert soziale und wirtschaftliche Aktivitäten. So revitalisierte die Gemeinde öffentliche Räume rund um die vier Stationsgebäude. Entstanden sind neue Plätze, Gemeindezentren, Kinderspielplätze und viel Strassenkunst. Diese Entwicklungen beflügeln die lokale Wirtschaft und schaffen Arbeitsplätze. So sind neben den Stationen zahlreiche Betriebe wie Bäckereien, Souvenirshops, Restaurants und sogar ein Hotel entstanden.
Ana Mercedes Mora
Präsidentin Quartier ‘El Paraiso’, Ciudad Bolivar
In einem vom SECO finanzierten Teilprojekt hat IFC die Behörden in Bogotá zu zwei Fragen beraten: Wie kann man städtische Infrastrukturbauten wie die TransMiCable effizient verwalten und dabei internationale Umwelt- und Sozialstandards etablieren? Und wie lässt sich der Privatsektor dazu bewegen, sich mehr an städtischen Infrastrukturprojekten zu beteiligen? Anschliessend gelang es, für solche Projekte geschätzte 450 Millionen Dollar von privater Seite zu mobilisieren.
Stadtentwicklung und Infrastrukturversorgung
Stadtentwicklung und Infrastrukturversorgung
Scroll down to continue
Swipe to continue
Swipe to continue
SECO's engagement on climate change
