UBP Favours Sustainability Pragmatism, Mulls Defence Shift

Tom Burroughes

27 June 2025

As the term “ESG” – environment, society and governance – seems to have fallen out of use, with more talk of “sustainability" instead, it’s clear that pragmatism is now the order of the day.

A series of forces have changed the narrative. There was Russia’s February 2022 invasion of Ukraine that sent oil and gas prices up sharply; supply chain disruptions during and after the pandemic; worries about European countries’ defence gaps; and regulatory clampdowns on “greenwashing.” To show how far matters have changed, a crop of banks has started to launch defence-related funds – once unthinkable for some on the ESG side. (See articles here, here and here.)

Although the investment vocabulary has changed, that doesn’t mean that concerns about human-caused global warming, pollution, species and habitat loss, maltreatment of workers, corruption and poor corporate governance have ceased to be urgent.

Robert de Guigné, group head of sustainability at sector.”

The approach
Discussing how UBP evaluates firms, de Guigné explained that the bank will consider, for example, how sensitive a firm’s value is and performance to external ESG trends, such as global warming, social arrest, resource scarcity, and so forth. This measures the ESG risks of the company; how a company makes what it does and if its products and production processes have a negative impact on third parties; and what positive contribution the firm is making to the transition to a more sustainable economy, etc.

Firms that can provide solutions for issues that arise, such as when software can measure a producer’s carbon footprint and hence give information helpful in tackling it, are considered as positive contributors.

“Companies that transform their business models to become more sustainable will gain a much larger market share,” De Guigné said. Conversely, companiesw with non-sustainable business models who are unwilling to change will become stranded assets, meaning their financial value will become worthless in the future.

There have been mistakes and approaches to investment down the years that haven’t worked out or had to be modified, and that’s entirely normal and healthy," he said.

“You need to be agile and take into account all the messages you receive,” De Guigné added.