Mortgage bonds and climate transparency

Mortgage bonds (Pfandbriefe) indirectly finance a significant proportion of Switzerland’s building stock. By extension, the two mortgage bond institutions share responsibility for the CO2 emissions caused by these properties. SVVK-ASIR has been campaigning for greater transparency in the disclosure of these emissions since 2023 – and has already started to see results.

In Switzerland, buildings and construction activity generate around 11 million tonnes of CO2 every year, a quarter of the country’s total emissions. At the same time, this sector accounts for around 40 percent of the energy consumed and 84 percent of the waste generated. Maintaining and expanding living space requires capital, and Swiss mortgage bonds serve as an important source of refinancing for financial institutions.

The two Swiss mortgage bond institutions – the Pfandbriefzentrale der schweizerischen Kantonalbanken (PBZ; Central Mortgage Bond Institution of Swiss Cantonal Banks) and the Pfandbriefbank schweizerischer Hypothekarinstitute (PBB; Mortgage Bond Bank of Swiss Mortgage Lenders) – are central intermediaries between the capital and real estate markets. They raise capital by issuing mortgage bonds and pass it on to their member banks in the form of loans; these in turn finance private mortgages. For their part, the member banks deposit first-class mortgages on residential properties as collateral. These form what is known as the cover pool – the stock of collateral that hedges the mortgage bonds.

At the end of 2025, the outstanding bond volume of the two institutions amounted to around CHF 193 billion (SIX values as at 31 December 2025). This makes PBB and PBZ among the most important issuers in the Swiss bond market; only the Swiss Confederation has a comparable volume. For SVVK-ASIR members – large Swiss pension funds and insurance companies – mortgage bonds are a key investment instrument due to their high credit rating (AAA), security and liquidity, and they make up a large portion of their portfolios.

Transparency around climate risks and climate compatibility

As responsible investors, the members of SVVK-ASIR appraise the carbon footprint of their investments annually to assess their climate risks and climate compatibility. This data was not previously available for mortgage bond investments. As a result, SVVK-ASIR has been seeking dialogue with the two institutions since 2023 in the hope that they would provide reliable data – which has met with success:

• In 2025, PBZ included the average CO2 intensity of its cover pool in its Sustainability Report for the first time. It initially used a method that excluded indirect CO2 emissions (known as Scope 2 emissions) from purchased electricity, heating and cooling, which limited the scope for comparability. Fortunately, PBZ expanded its disclosure in 2026 by additionally making absolute emissions transparent and disclosing indirect Scope 2 emissions for the first time.
• PBB has been calculating the CO2 emissions of its cover pool since 2021 on the basis of an estimation process. This includes both direct (Scope 1) and indirect (Scope 2) emissions – a positive step. Just as fortunately, PBB expanded its reporting in 2026 as well, and is now disclosing the average CO2 intensity of the cover pool. However, unlike PBZ, it is still not including absolute CO2 emissions in its reporting.

Conclusion: to ensure consistent, cross-market comparability, both institutions need to disclose the average CO₂ intensity according to a common – and thus comparable – standard. This standard should include both Scope 1 and Scope 2 emissions.

Outlook: decarbonisation plan and net zero

The key questions is: how do buildings co-financed by mortgage bonds achieve Swiss climate targets? Many banks are now publishing decarbonisation plans that set out their approach for reducing their emissions by 2050. As key players in real estate financing, the two mortgage bond institutions also need to be transparent about how the emissions generated by the cover pool can be reduced in the long term.

SVVK-ASIR welcomes the progress made to date and encourages both institutions to remain resolute on their journeys towards greater climate transparency.