Chairman's statement on Corporate Responsibility
Axel. A. Weber
As Chairman of UBS and Chair of its Corporate Responsibility Committee, one of my key duties is to understand the scope and scale of societal challenges and their relevance to, and impact on the firm, our clients and other stakeholders. Our industry has played, and continues to play an important role in fostering growth and prosperity and, as a consequence, societal change. I see our firm’s achievements in the area of corporate responsibility as part-and-parcel of this. It is through such achievements that we have made, and continue to make progress.
We live in a world that is more interconnected, more interdependent and more interactive than ever before. Rapid technological advances in particular continue to have a profound effect on the economic, political, cultural, environmental and social landscape. These advances have changed the way we think and act. They have altered the way we do business. They have transformed the products and services we consume, and reshaped our perceptions of the world around us. While this has brought with it significant benefits and opportunities, it has also created far greater awareness of the challenges we all face. As Chairman of a large, global bank and, since 2013, also Chair of UBS's Corporate Responsibility Committee, I see it as my duty to understand the scale of these challenges and to consider together with my fellow board members their relevance to UBS - as well as potential (mid-to-long-term) actions our firm may need to take.
In 2012, we had made significant changes to our strategy. We have, and continue to execute that strategy in a focused, determined and disciplined manner, while dealing with the headwinds that we, and the industry as a whole, continue to face. We have achieved a great deal already. We have demonstrated that our business model works in a variety of market conditions. We are in line with, or ahead of, many of our key strategic and financial targets. This has been recognized by our clients who have entrusted us with yet more of their assets. In short, our achievements have given our clients and other stakeholders even greater confidence in the firm.
Our clients care deeply about societal issues and want to use their resources for the benefit and advancement of individuals, communities and societies around the globe. They are increasingly focused on issues such as the maintenance of functioning infrastructures, the impact of climate change, the strains imposed by demographic shifts, the growth in inequalities, and the provision of education, jobs and health for all.
This translates into a strong and growing interest in investing according to sustainable and responsible criteria. In 2013, this trend was documented very clearly in one of the flagship publications of our Wealth Management business division. "UBS Research Focus - Sustainable Investing", the result of collaboration between experts in Wealth Management, Global Asset Management and the Investment Bank, also demonstrated why and how a well-considered sustainability approach may add value to the portfolio of clients.
UBS has played an active role in this field for many years and, in 2013, our Wealth Management Values-Based Investing team established an Impact Investing Private Equity fund for SMEs in emerging and frontier markets. I am proud to say that we were the first bank to do so. To me, the fund shows that banks can use their traditional strengths to meet the demands of new realities. Another example of this innovative approach is our Global Real Estate business’s Responsible Property Investment Strategy. With buildings accounting for some two-thirds of global CO2 emissions it is imperative that we look at ways to reduce the harm such emissions do to our environment for the sake of future generations. Our Global Real Estate business is already actively engaged in such work across its global real estate investment portfolio.
While we have long provided such offerings, we have not done so holistically. As a global bank, and the world’s largest wealth manager, we recognize that we are in a unique position to do so. This is why, in 2013, we made a significant commitment to maximize our efforts through a dedicated, industry-leading platform. This will deliver comprehensive research, advisory and product capabilities in sustainable investments and philanthropy, and is currently under development. While we have always provided such offerings, it is our objective to do this holistically, channeling a growing percentage of assets, through innovative financial mechanisms, to address societal challenges and make societal performance part of every client conversation.
The Board and I are taking a keen interest in this exciting development and will oversee its progress alongside our work to monitor our other corporate responsibility activities and commitments. Careful oversight of these significant endeavors requires more time and we have therefore increased the frequency of the Corporate Responsibility Committee’s meetings.
A well-founded understanding of the issues that are of relevance to the firm and its stakeholders is crucial to the successful execution of the Corporate Responsibility Committee's mandate. To that end, and at the behest of the committee, UBS undertook a comprehensive assessment of such issues in 2013. The results are reflected in the UBS materiality matrix, which distils the views of our stakeholders. The contents of the matrix reflect focal points of our strategy both explicitly and implicitly, including financial stability, risk behavior and culture, operational efficiency, as well as broader societal concerns.
Our industry has played, and continues to play an important role in fostering growth and prosperity and, as a consequence, societal change. However, recent events have shown that the global financial system needs to be strengthened significantly. We must restore trust and confidence in the financial system. Policy-makers and financial institutions have already embarked on a concerted multi-year effort to make the financial system more resilient and better able to secure sustainable returns.
I see our firm’s work in the area of corporate responsibility as part-and-parcel of this. I am a realist at heart and, as such, I know that we still have work to do. As Chairman, I know we must continue to implement our firm's ambitious strategy. As Chair of our Corporate Responsibility Committee, I know we must think in terms of advancing our societal activities and commitments in a more holistic fashion. Finally, as an ordinary citizen, I know that it is only together that we can successfully address the many sustainability challenges we all face.
Yet, being realistic also means that one should not become fixated on the challenges alone. It is important to recognize the achievements too. It is only through such achievements that we have made, and continue to make progress. As the economist and Nobel prize winner Robert J. Shiller says, we will not achieve progress "if we simply condemn financial capitalism as a system of irresponsibility." I agree, and believe that the best way forward is to harness the power and influence of our industry for the good of society.
Our commitment to the UN Global Compact
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.
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