Our clients and stakeholders expect that all our banking activities are undertaken in a responsible manner, and that all our products and services are suited to the needs of our clients. We aim to beat those expectations. To that end, we have placed societal considerations at the heart of all our advisory, research, investment, financing and ownership processes. Our robust risk framework helps us identify and manage potential environmental and social risks. We also continue to further strengthen our efforts to prevent and combat financial crime. Our aim is simple. We want to continue to earn the trust of our clients and other stakeholders, deliver sustainable performance and create long-term shareholder value
UBS offers a state of the art values-based portfolio screening and investment approach to support not only our private but increasingly our institutional clients in their efforts to align their values with their investment approach. To serve our institutional clients, Wealth Management cooperates closely with Global Asset Management.
Social and environmental changes will have a major impact on the way we live and do business in the future. For forward looking investors these aspects are also playing an increasingly important role in long-term business success and as a consequence also in our investment approach.
The investment behaviour of socially or publicly exposed institutions such as churches, charities or foundations has come under media scrutiny as the public demands higher level standards. Well known non-profit organizations have been alleged of pursuing an investment approach which focused entirely on profit. It is no longer accepted that, for example, a non-profit engaged in children’s welfare is invested in companies accused of child labour. Environmental non-profit organizations increasingly ensure that none of their investments are involved with industries or companies that have a negative impact on the environment.
The UBS Values-Based Investing team is a solution provider with the mission to support our clients in establishing their sustainability goals and to help them to reflect them in their portfolio.
UBS was approached by a mining company operating in sub-Saharan Africa. The mining industry often is associated with severe environmental impacts, including the loss of biodiversity and environmental pollution, as well as social issues such as involuntary resettlements, poor working conditions, and child labor. The company was facing severe media criticism stating that it was indirectly sourcing from artisanal miners, including children that were all working without any safety equipment.
UBS's sector guideline on metals and mining provides guidance on dealing with the environmental and social issues the sector faces. If significant risks are identified during due diligence, they have to be escalated to senior management for approval. UBS's position on controversial activities states that UBS will not knowingly provide financial services to corporate clients that are engaged in child labor. UBS communicated these requirements to the company and discussed the allegations with them. The company provided insights into the supply chain process it had in place to make sure that suppliers were in line with, among others, ILO standards on child labor and occupational health and safety. Given the severe allegations in the media on the one hand and the company response on the other hand, UBS decided to engage an independent third party to assess the implementation of the firm's supply chain process.
The independent third party confirmed the company's responses, providing confidence that the company was managing its supply chain in line with UBS Standards. The approval was given and certain conditions were stipulated, allowing UBS to monitor the company and withdraw from its obligations would the client be subject to similar allegations in the future and not be able to refute these.
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