ESG Communication as a Legitimacy and Governance Mechanism: How Swiss Financial Institutions Adapted ESG Communication under Geopolitical Uncertainty and Regulatory Change between 2020–2024

This thesis examines the adaptation of ESG communication by Swiss financial institutions between 2020 and 2024 in response to geopolitical uncertainty and regulatory change. The analysis draws on sustainability reports from UBS Group AG and Helvetia Holding AG, supplemented by expert interviews with sustainability professionals from Swiss financial institutions and advisory firms. The thesis traces the evolution of ESG communication during a period characterized by the Russian invasion of Ukraine, increasing energy insecurity, and the progressive institutionalization of mandatory disclosure frameworks.

Over the past five years, ESG communication has shifted from a voluntary commitment to a regulatory obligation. Financial institutions are now required to address legitimacy demands that are normative, risk-oriented, and compliance-driven. These demands have intensified as geopolitical disruptions and regulatory transformations have altered the institutional environment. Understanding how ESG communication evolves under these overlapping pressures matters for institutions seeking to maintain stakeholder trust, for regulators assessing whether mandatory disclosure produces substantive organizational change, and for researchers examining how geopolitical disruption reshapes the communicative environment in which sustainability commitments are articulated and justified.

The analysis identifies three cumulative phases. From 2020 to 2021, both institutions presented ESG as an expression of institutional purpose and voluntary commitment, employing the register of moral legitimacy. After the 2022 invasion of Ukraine, priorities shifted toward resilience and energy security, indicating a move toward pragmatic legitimacy. By 2024, procedural compliance and standardized governance became predominant, signifying a transition to cognitive legitimacy. These phases did not occur sequentially, and by 2024, all three legitimacy registers coexisted within the same reporting documents.

This thesis characterizes this phenomenon as a cumulative layering dynamic, in which a portfolio of overlapping justificatory registers addresses distinct audiences and contextual demands. The findings have practical implications at several levels. Institutions that integrate sustainability into core governance structures are better positioned to maintain credibility as disclosure requirements become more stringent, given the persistent tension between communicative sophistication and substantive organizational change across the sector. Geopolitical disruptions do not directly alter ESG communication but influence it indirectly by affecting internal materiality assessments. Consequently, robust materiality processes are more critical than reactive adjustments to communication during periods of external instability.

The primary empirical material comprises sustainability reports published by UBS Group AG and Helvetia Holding AG over five reporting cycles from 2020 to 2024. This documentary analysis is complemented by semi-structured expert interviews with sustainability professionals, including a Consultant at Ernst & Young Switzerland and the Head of Sustainability at Valiant Bank. The qualitative data were analyzed using the Gioia methodology, an inductive approach that develops analytical categories through iterative coding across three levels of abstraction, progressing from first-order concepts through second-order themes to aggregate dimensions.