Sustainability & philanthropy
Acting in a responsible, sustainable manner is a central component of Liechtenstein’s culture. Liechtenstein is establishing itself as a respected, sustainable and stable financial centre.
In December 2015 a new era was initiated at the Climate Conference in Paris when all member states of the UN agreed to support a new climate convention. This convention is also setting the future direction of the financial sector. After all, it too is affected by climate change and the associated risks. If it does not focus its investments on sustainably oriented companies and sectors in good time, then climate change could destroy assets.
Sustainable Products and Services
Sustainability is tangible in Liechtenstein. Liechtenstein is one of the most sustainable and innovative countries in the world. In 2020 Liechtenstein was ranked the 12th most sustainable country in the worldwide Global Sustainable Competitiveness Index of 180 countries around the world. The Liechtenstein financial centre has traditionally placed particular importance on the need to accept responsibility and to show commitment in the field of sustainability, and has nurtured this through various activities and initiatives as well as special niche products.Sustainability plays an important role in Liechtenstein’s financial centre. It promotes the development of cutting-edge products and structures that take account of the sense of responsibility shown by clients towards society and the environment.
Socially Responsible Investment
This form of investment takes into account not only economic but also ecological, ethical, governance and social aspects. This enables investors to achieve a kind of ‘double return’: they generate an economic return and at the same time can sustainably promote their missions. Through the asset management of foundations and non-profit organisations, such sustainable investments offer the option of supporting the purpose of the recipient institutions.
Sustainable investments are more than just an investment style or product category. For an increasing number of investors, they are becoming a personal mission and a different way of dealing with money. Their goal is the so-called impact that the investment makes. The question of the targeted impact of the investment on social, ecological, ethical or even governance goals of the investors is central to their motivation. Microfinance investment funds, green building investment funds or sustainable forest investments are examples that are already available on the market. Climate change is likely to continue playing a key role here.
Philanthropy – financial products for common-benefit purposes
In today’s world, the traditional philanthropic concept of merciful charity is undergoing changes. This means wealthy individuals are not necessarily donating less, but are increasingly linking their donations to clear targets (venture philanthropy). In addition, an increasing number of organisations are discovering another way to do “good things” in the form of investment.
Philanthropic activity can take many forms. Traditionally, this has always been a variation on the donation. In activity terms, a distinction can be made between a financial donation (fund-raising), a donation in time (philanthropic commitment) or in kind (which includes tangible assets).
New forms of philanthropy can be seen in venture philanthropy – an approach to philanthropy that is based strongly on entrepreneurial principles. Venture philanthropy uses private equity or venture capital to support social, environmental or community projects. Unlike foundations or donors, venture philanthropy can use a variety of forms of financing, such as loans and equity. Recipients of the funds provided may, for example, be non-profit organisations and social enterprises. In addition to the financial commitment, representatives of venture philanthropy generally also support the sponsored projects through mentoring, advice and network contacts.
Further information about sustainability in Liechtenstein can be found under Sustainability.