UBS Group saw a sharp rise in sustainable investments in 2020 and committed to help clients lower greenhouse gas emissions in their portfolios to net zero, the bank said in its latest Sustainability Report. The 2020 report, based on comprehensive GRI standards, showed that UBS met or exceeded its key sustainability targets. 
 
The rise in sustainable investments comes as part of a strategy that UBS has pursued for over two decades, making it one of the financial industry’s leading forces for driving positive, long-term change. 
 
Heinrich Baer, Country Head of UBS in Luxembourg: “Here in Luxembourg, sustainable finance benefits from a dedicated commitment from the country’s government and is a key anchor point in its development strategy, as we can see by the recent launch of the Luxembourg Sustainable Finance Initiative and Strategy.”          

Impact investing- and sustainability focused invested assets

The year 2020 saw very strong momentum in UBS’ sustainable finance activities, indicated by growth in Core Sustainable Investments (Core SI), which rose by 62% to USD 793 billion to become 19% of all client invested assets. Core SI products involve a strict and diligent asset selection process across key SI strategies. Invested assets classified as impact investing or sustainability focused, which apply the most rigid sustainability criteria, increased 154% to USD 141 billion compared to 2019. The rise reflects UBS’s strategic focus on the most sustainable asset classes and increased demand for sustainable strategies during the pandemic crisis.  

Group CEO Ralph Hamers: "For over two decades, UBS has been at the forefront of sustainable finance – and we aim to extend our leadership. We aspire to do more to help clients transition to sustainable ways of doing business, to ensure their long-term success and to support them in fulfilling the commitments they've made to people and planet.” 
 
UBS's leadership in sustainable finance resulted from successes throughout the Group. For example: 

•  Asset Management saw investments in Climate Aware strategies, which help institutional clients measure and reduce the carbon footprint of their portfolios, increase almost five-fold to USD 15.3 billion from USD 3.1 billion in 2019.
• Global Wealth Management made sustainable investments the preferred solution for private clients investing globally, the first major global financial institution to do so.  
• UBS has directed USD 6.9 billion of client assets into impact investments related to the United Nations Sustainable Development Goals (SDGs) since 2017, and surpassed its USD 5 billion goal in 2020, more than one year early.
• The Investment Bank supported 33 green-, social- and sustainability bond transactions. 

High-carbon related assets

The bank advanced its ambition to apply leading transparency and reporting standards, which include climate-related disclosures. Underscoring UBS’s commitment to support an orderly transition to a low-carbon economy as defined by the Paris Agreement, the firm piloted a novel heatmap methodology in 2020 to enable a better understanding of climate risk exposures. This demonstrates UBS's commitment to aligning its disclosure within the five-year pathway outlined by the Task Force on Climate-related Disclosures. Applying this methodology, UBS further reduced its banking balance sheet exposure to high-carbon related assets to 1.9% (USD 5.4 billion) at end of 2020, compared to 2.3% in 2019 and 2.8% in 2018. 
 
UBS also committed to help clients reach net-zero greenhouse gas emissions in their investment portfolios by 2050 by becoming a founding member of the Net Zero Asset Managers Initiative. This group of 30 major international asset managers pledged to set interim targets for increasing the proportion of assets managed in line with the Paris Agreement. To support the transition to a low-carbon economy, UBS intensified its active engagement on climate-related topics during 2020, which included meetings with 49 oil and gas companies and utilities, and voted on 50 climate-related shareholder resolutions, supporting 88% of these. 
 
“Investors have the power to effect real change and we are seeing an increasingly strong appetite to direct capital towards a lower-carbon future. We were able to capture the spectacular industry growth in climaterelated funds during 2020 by providing innovative products and solutions that enable clients to align their investments with their de-carbonization goals. Looking ahead, we are strongly placed to help meet the evolving needs of our clients in a post-COVID-19 world, where sustainability and climate will continue to be central themes.”, adds Heinrich Baer, Country Head of UBS in Luxembourg. 
 
UBS also fulfilled its RE100 commitment to source 100 percent of its electricity from renewables in 2020. In addition, the firm set a target to achieve net zero emissions for its own operations by 2025.            

Top rankings in sustainability indices

In recognition of its achievements across all sustainability activities, UBS received the top ranking among diversified financial services firms in the Dow Jones Sustainability Indices (DJSI), the most widely recognized sustainability rating, for the sixth year running. UBS also secured a place on CDP’s prestigious "A List" for tackling climate change. Kicking off 2021, UBS received the Gold Class Sustainability Award in the S&P Global Sustainability Yearbook showcasing the best performing companies in terms of environmental, social and governance metrics.