UBS Clients Go More Sustainable, New Numbers Show

Tom Burroughes Group Editor 11 March 2021

UBS Clients Go More Sustainable, New Numbers Show

The firm says the growth in its sustainable investment assets, accounting for a rising share of all clients' money, speaks to a powerful trend in financial affairs around the world.

UBS, the world’s largest wealth manager, today said its holdings of “core” sustainable investments surged by 62 per cent during 2020 to hit $793 billion, at 19 per cent of all client invested assets and highlighting how this area is gaining traction. 

The banking group disclosed the figures in its Sustainability Report, based on Global Reporting Initiative standards, an international benchmark. 

"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,” the firm’s chief executive, Ralph Hamers, said.

Banks and wealth managers have been touting their credentials and offerings around sustainable investing - such as putting money into low-carbon energy - over recent years. And with the world's biggest asset manager, BlackRock ($8.67 trillion, end-December 2020), saying it is putting its weight behind the idea, the trend appears unstoppable. So much so, in fact, that a worry expressed to this news service from industry figures is of firms "greenwashing" conventional portfolios with lots of marketing spin about helping the environment. (Editor's note: it is also worth noting that not everyone still buys into the idea that carbon emissions are an existential threat and that fossil fuels should be phased out rapidly without reliable and affordable alternatives.)

Core sustainable investment products follow a specific selection process. Invested assets classified as impact investing or sustainability focused, which apply the most rigid sustainability criteria, increased 154 per cent to $141 billion compared with 2019. 

Within the global wealth management segment, UBS said it made sustainable investments the “preferred solution” for private clients investing globally and said it was the first major global financial institution to do so. 

UBS has directed $6.9 billion of client assets into impact investments related to the United Nations Sustainable Development Goals since 2017, and surpassed its $5 billion goal in 2020, more than one year early.

In Switzerland, UBS converted its entire $9 billion Vitainvest fund shelf into sustainable investments, making sustainable private pensions the standard for UBS.

In asset management, the group made investments in “climate aware” strategies, and these rose almost five-fold to $15.3 billion from $3.1 billion in 2019. 

“Investors have the power to effect real change and we are seeing an increasingly strong appetite to direct capital toward a lower-carbon future. We were able to capture the spectacular industry growth in climate-related funds during 2020 by providing innovative products and solutions that enable clients to align their investments with their de-carbonization goals,” Suni Harford, president UBS Asset Management, said.

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