Chairman's statement 2012
2012 was undoubtedly a milestone year for UBS. Together with our clients and others around the globe we celebrated the firm's 150th anniversary. We continued to execute our strategy successfully and, in October, we announced the acceleration of our strategy to create the UBS of the future for benefit all our stakeholders. This involves further sharpening our focus in the Investment Bank, reducing costs significantly and driving further Group-wide efficiencies more rapidly. We are already ahead in key areas of our strategy, notably in building our capital ratios and reducing our risk-weighted assets. Our actions are detailed in our 2012 Annual Report. We remain fully committed- as emphasized in our Code of Business Conduct & Ethics - to placing our client's best interests at the heart of everything we do, and to deliver sustainable performance for the benefit of our shareholders.
I understand if such a strong and positive message rings hollow to some of our firm's stakeholders in light of the setbacks we experienced during 2012. I refer in particular to our announcement in December that UBS had agreed to pay approximately CHF 1.4 billion in fines and disgorgement to US, UK and Swiss authorities to resolve LIBOR-related investigations. However, I would like to emphasize that these are legacy issues that we are dealing with. We have taken appropriate action and we will not let the actions of a few in the past define our future.
There is no doubt in my mind that as part of our ambitious plans to transform the firm for future success we must also undertake a "cleaning of the stables". Indeed, to many of our stakeholders this must appear a truly Herculean task. No one pretends it will be plain sailing, but we believe we have the right strategy, the right people and appropriate checks and balances in place to ensure we perform sustainably and responsibly in future.
The Board and I will continue to display zero tolerance towards inappropriate and unethical behavior. At the same time, we fully understand that strict compliance with all relevant policies and regulations, while vital to the proper functioning of UBS, does not in itself create the positive culture we strive to have at our firm. More needs to be done to accomplish this goal, and both the Board of Directors and the Group Executive Board are working hard towards achieving it. Our credibility with clients, investors and employees is critical and therefore we must continue to strengthen the firm's operations, culture and awareness of risk.
Observations on Corporate Responsibility
In a recent thought-piece, renowned Harvard Professor and corporate strategy expert Michael E. Porter reminded us of an important truth: "The perception that business is bad for society is ironic because business is the only institution where wealth is actually created. Society cannot prosper without healthy businesses." Unfortunately, when thinking of banks like ours many members of the public hold the opposing view. Since the financial crisis of 2008, banks are too often seen to be destroyers and not creators of wealth. Some perceive banks in fact as neither "healthy" nor "good" for society. It is my goal to reverse this perception of our bank at least.
I see true corporate responsibility as a key component of this. Corporate responsibility starts with individual responsibility, with the expectation that each and every one of us at UBS behaves responsibly. At the corporate level, our firm's commitment to corporate responsibility demands careful management of our relationships with our stakeholders. It demands careful consideration of societal issues, directly and indirectly linked to business. We have embedded responsibility for this important task at the highest level of the firm. At the Board of Directors level, the Corporate Responsibility Committee monitors and continues to provide direction on our corporate responsibility commitments and activities. As a member of the Committee, I actively contribute to its discussions and decisions.
UBS does in fact deliver successfully across a broad range of corporate responsibility commitments and activities. Regretfully, many of these important and laudable efforts do not receive the recognition they deserve. I want to remedy this and that is why I have highlighted below some noteworthy examples of what we have achieved over the past year.
UBS's continued commitment to corporate responsibility
In 2012, we continued to support our clients in understanding key societal opportunities and challenges and acted as a trusted financial advisor on sustainability issues. We did so by expanding our comprehensive range of sustainability products and services, including impact investing, sustainable real estate funds, socially responsible investment products, advisory on sustainability challenges, and offerings to our retail clients. We have established a leading position in values-based investing and providing environmental, social and governance (ESG) research.
We apply robust environmental and social risk processes and practices. I am particularly proud of our industry-leading environmental and social risk screening process, which we established through a successful collaboration between our risk and compliance functions in 2011. Our compliance function is, in fact, a significant contributor to ensuring that our corporate responsibility commitments are met and plays a key role in protecting our firm from reputational, business or financial damage.
Our environmental and social risk management and our global sanctions, anti-money laundering and anti-bribery programs are important examples of the need for effective outreach and internal collaboration between our business divisions and external collaboration with our stakeholder community. In 2012, we once again demonstrated our commitment to engaging with various initiatives and partners to develop and, where appropriate, enhance our standards.
As regards our contribution to protecting the environment, UBS works hard to reduce its environmental footprint. In particular, we recognize that financial institutions are expected to play a key role in the transition to a low-carbon economy. In 2012, we accomplished our ambitious Group-wide CO2 emission reduction target of 40% below 2004 levels. Our achievements have been widely recognized by external experts, in particular by the most significant climate change-focused investors' initiative, the Carbon Disclosure Project (CDP). In 2012, the CDP ranked UBS as an industry leader in the banking sector and among the top 10 companies worldwide for its measures to combat climate change.
Another major milestone in 2012 was without any doubt our firm's 150th anniversary celebrations. Among the many activities conducted during the year, I am particularly pleased about the contributions made by and through our well-established and vigorous community investment program. We implemented an Employee Recognition Award, recognizing 150 UBS employees or teams of employees globally for their outstanding community involvement. Above all, we launched a major education initiative in Switzerland which, we firmly believe, will benefit the entire Swiss population. Consisting of six sub-projects, the UBS Education Initiative centers on the UBS International Center of Economics in Society at the University of Zurich. Other sub-projects go beyond academia, benefiting, among other groups, school children, young entrepreneurs and start-up companies, and entrepreneurs who are planning their succession. We are also creating 150 extra apprenticeships over the next five years and 150 extra internships over the next three years at our firm.
I see these examples as excellent evidence of the comprehensive range of valuable activities our firm engages under the helm of corporate responsibility. Our firm's corporate responsibility strategy is founded in the spirit of continuous improvement. This is a continuous process, one that demands a commitment to quality and transparency. It requires a regular and critical assessment of our policies and practices - which, in turn, requires the careful consideration and assessment of societal issues of potential relevance to UBS. This endeavor is directly linked to a key external corporate responsibility commitment of our firm, the UN Global Compact. As one of the original signatories of the Compact, which fosters adherence to ten principles covering the areas of human rights, labor standards, the environment and anti-corruption, we continue to consider it as an important reference point for our corporate responsibility efforts.
Retrospective and outlook
I look back on a turbulent but fascinating first year as Chairman of UBS. Much has been achieved, but more remains to be done. I am confident that we will overcome the effects of the challenges we faced in 2012 and once again enjoy the full confidence and trust of all our stakeholders.
We have recently undertaken an analysis of the issues deemed to be relevant to our stakeholders. The results of this analysis are reflected in a materiality matrix, which distils the views of the many and varied stakeholders our firm interacts with. The contents of the matrix reflect focal points of our strategy both explicitly and implicitly, including financial performance and stability, corporate culture and conduct, quality of products and services.
The matrix also reflects broader societal concerns which we are addressing through our corporate responsibility commitments and activities. Here, I see our new climate change strategy as a good example of what we are doing as it combines our internal responsibilities (further reducing our own CO2 footprint) with a clear client focus. We recognize that financial institutions are increasingly expected to play a key role in the transition to a low-carbon economy. As a trusted financial advisor, we are determined to help support prepare our clients in preparing for success in an increasingly carbon-constrained economy.
Together with my colleagues on the Board of Directors we are responsible for formulating our firm's values and standards and ensuring we meet our obligations to our stakeholders. A superb record in the area of corporate responsibility is part and parcel of this vital endeavor.
Products and services in these webpages may not be available for residents of certain nations. Please consult the sales restrictions relating to the service in question for further information.
© UBS 1998 - 2014. All rights reserved.