New Swiss Stewardship Code released to promote sustainable investment

Details of the main recommendations including nine principles for effective stewardship.

On October 4, 2023, the Asset Management Association Switzerland (AMAS) and Swiss Sustainable Finance (SSF) released the Swiss Stewardship Code (Code). The purpose of this Code is to promote the active exercise of shareholder rights by investors in Switzerland through developing a more sustainable economy and increasing long-term return for investors, adjusted for sustainability risks.

The Code contains five core chapters:

  • (1) an introduction;
  • (2) the definition of the term stewardship for the purpose of the Code;
  • (3) the importance of the interaction between the investors and the service providers;
  • (4) a summary and definition of the nine principles for an effective active ownership (i.e. stewardship);
  • 5) additional guidance on implementation of the principles.

Regulatory status of the Code

The Code is not binding. It is applicable on a voluntary basis and only makes recommendations. According to the AMAS and SSF, the principles of the Code are aligned with the Global Stewardship Principles of the International Corporate Governance Network (ICGN).

The Code complements existing civil and administrative/regulatory obligations applicable to service providers. In other terms, the Code does not contradict these civil or regulatory obligations or requirements, and compliance with its principles does not discharge investors and/or service providers from their respective obligations.

Definition and double materiality

The Code defines the notion of “stewardship” also known as “active ownership” as a responsible investment approach by which investors collaborate and interact with investee entities (investees) to generate long-term financial, environmental and societal value, and to reach positive and long-term sustainable outcomes.

The Code also recalls that the double materiality principle is key for stewardship efforts. Double materiality stems from the accounting concept of materiality of financial information, but brings the concept of disclosure a step further as it stipulates that it is not just sustainable-related impacts on a company that can be material but also impacts of that company on sustainability factors.

Key actors for implementation

Asset managers and other service providers play a key role in the implementation of a viable stewardship approach. Investors (asset owners) often have a limited capacity to implement all components of stewardship. For this reason, they delegate stewardship activities to their asset manager or service providers.

In this context, the Code insists on the importance of a clear definition of stewardship services, such as engaging and voting as well as related monitoring and reporting on activities has to be set out in the contracts entered into between investors and asset managers or service providers.

Nine principles for effective stewardship

The nine principles are explained here.


The implementation of the stewardship approach within the governance of asset managers and service providers require a proper board organization and allocation of resources, including sufficient competences. Sufficient resources and competences (as well as relevant continuing education) are not limited to the Board but should infuse all personnel involved, including executive management. For regulated entities, this means that the allocation of resources and training dealing with stewardship not only concerns staff active in investment management or sales, but also concerns control functions.

Such implementation must also be reflected in the internal organizational rules and processes of the relevant institutions. Depending on their structure and taking into account the applicable regulatory framework to Swiss asset managers, it may be advised to define and implement a stewardship approach in the investment guidelines or in an annex to the guidelines (subject to conflicts of interest, see below).

In addition, the fiduciary duties, which will ensure that investment objectives, strategies, business model and the general corporate culture are in line with an effective stewardship, may be implemented via a code of ethics or conduct. As part of this approach, a remuneration scheme should also be adapted.

Stewardship policies

The asset managers and service providers should establish effective stewardship policies in line with the principles set out in the Code. Such policies should cover key stewardship aspects, namely delegation and related due diligence (see below), conflicts of interest, voting, engagement, escalation and monitoring of investees. According to the Code, such policies should be endorsed at the highest level of the governance, which for mid-size institutions is the Board.

As mentioned above, such policies could be, for instance, reflected in the investment management guidelines or in an annex to such guidelines, even if nothing prevents the development of ad hoc policies. However in such a case, it will be important to ensure consistency with the investment process, which is generally defined in the investment management guidelines.

The effectiveness of such policies should be controlled through periodic review, which would require at least an annual review, even though this review could be conducted more frequently depending on the reliance on stewardship in the investment approach and the concrete experiences and feedbacks from the ground.

The Code specifies that the stewardship policies should be actively communicated to investees and publicly disclosed. In practice, if such policies are integrated in the investment management guidelines, it should be sufficient to communicate and publicly disclose a summary of such policies (see below).


The voting component of stewardship is one of the key and most visible aspects of such an approach. The Code takes great care in discussing this component since it must ensure that investors and service providers commit to an informed voting process at the General Meetings of investees, and monitor and/or challenge the policies of external advisers if a third-party proxy is used.

In an obvious way, the Code adds that voting should be consistent with stewardship policies and use of a proxy should not replace the investor’s own responsibility to guarantee that votes are made in a well-informed and responsible manner.

In order to keep clients informed and ensure transparency, the Code recommends regular public communication of actual voting records both on a per-resolution basis and in aggregate on asset managers/service providers’ website as well as directly to clients. In case of a vote against the management or an abstention, the rationale behind such a decision must be disclosed to clients upon request.


Promoting active dialogue between investors/service providers’ and investees or potential investees (for example “engagement”) is an integral part of the stewardship approach.

The Code distinguishes between engagement performed at the individual, collaborative (coordination/collaboration with other investors) and public level (direct or indirect, via, for instance, the industry associations’ active dialogue with relevant public stakeholders and policymakers on issues that affect responsible investment). The Code provides various details for each type of engagement.

The choice of the types of engagement belongs to the investors/services providers. From a regulatory perspective, collaborative engagement may present prima facie several challenges and risks. Practically speaking, the determination of the type of engagement should be endorsed by the highest level of governance since it assumes a strategic element.


Escalation refers to the situation where the stewardship activities do not result in the desired outcome and where the investors or service providers should take measures to encourage the investees in pursuing sustainable outcomes.

The Code sets a certain number of guiding principles, such as the inclusion of a definition of the conditions under which an engagement is considered to have failed and the triggering factors under which an escalation should kick in, as well as the type of engagement activities applied in case of escalation.

The escalation steps should be scaled and may include measures such as voting against a specific agenda item (for example against a specific board member), voicing concerns collectively alongside other investors, issuing a public statement, proposing shareholder resolutions, modifying the asset allocation and including the relevant investee in an exclusion list.

In practice, the choice of measures and their timing should be made carefully and stringent ones, such as modification of allocation or inclusion in an exclusion list, should be approved at least at the executive level. Public statements should also require a great deal of care and proper internal approval given their potential impact on the investees.

Monitoring of investees

An effective stewardship requires an appropriate monitoring of investees by the investors and services providers. The Code prescribes several measures, such as the inclusion of overseas entities in the monitoring scope and the understanding of the investees’ corporate governance and sustainability practices. Assessment of investees should not be limited to financial metrics and information but should also cover non-financial information including environmental, social and governance elements.

In that context, in addition to having appropriate internal resources, the Code highlights the fact that a proper coordination should be ensured in case an investor has separate research, portfolio or investment teams applying stewardship in order to maintain a sufficient level of consistency. The same coordination across teams is encouraged in case both debt and equity investments are held.

In any instance, internal coordination should be performed in accordance with internal compliance guidelines and potential barriers. The Compliance function should be involved and able to monitor such interactions.

Delegation of stewardship

The Code recalls that the delegation of stewardship shall remain under the responsibility of investors and service providers. If such a delegation is contemplated, the delegated party should be subject to an appropriate due diligence process up front and receive clear instructions on its role and activities. The investors and service providers should be able to oversee the activities hence delegated. The recommendations of the Code do not diverge from standard requirements applicable in case of delegation of activities.

When investments take place indirectly through collective investment schemes, the Code insists that asset managers have a stewardship policy in place that is in line with the Code or with other codes or guidelines with similar objectives.

Conflicts of interest

The Code recalls that conflicts of interest should be managed in order to act in the best interest of clients and beneficiaries. It also provide certain examples of conflicts, such as business or commercial relationships between asset managers and asset owners, investors and service providers, and between investors/service providers and investees or constellations in which an asset manager/service provider to whom an investor has delegated stewardship activities also provides financial products and services to the same investor.

Any concrete or potential conflict should be identified and managed or eliminated. The stewardship policy should address the measures taken in that respect. In practice, from an operational perspective and to the extent an institution has already a conflicts of interest policy in place, the stewardship policy may recommend that the policy be adapted to address conflicts affecting the provision of stewardship services. In addition, in view of ensuring sufficient transparency, the conflicts and measures taken should be disclosed to clients.

Transparency and reporting

The Code promotes active disclosure and reporting of stewardship policies and activities to clients and beneficiaries. Such reporting should take place regularly at least once a year and take the form of a stewardship report. Active communication of stewardship policies to investees is also encouraged. As mentioned, it is expected that public communication of policies or a summary thereof as well as adherence to the Code are published on the internet (for example on the company website).


This Code is a welcomed initiative from the AMAS and SSF. It demonstrates that Switzerland is closely following international developments. It also helps raise awareness of the asset management industry and stewardship as an approach to sustainable investing.

Despite the fact that this Code remains principle-based, it contains several concrete recommendations and a clear methodology that may provide a useful assistance to asset managers and service providers active in promoting sustainable investing and stewardship. 

Dr Vaïk Müller is a partner and co-head of Banking & Finance CMS Geneva. His main areas of focus are banking, regulatory, financial services and products.