ESG integration

Defining ESG

It is our belief that ESG issues and opportunities can affect investment performance, and by considering these factors we can deliver better informed investment decisions. 

Environmental

Factors related to the natural world.
Example of Environmental issues:

  • Climate change
  • Resource depletion
  • Waste and pollution
  • Deforestation
  • Biodiversity loss

Social

Factors that affect the lives of humans.
Example of Social issues:

  • Human rights
  • Modern slavery
  • Child labor
  • Working condition
  • Employee relations

Governance

Factors that concern corporate considerations.
Example of Governance issues:

  • Bribery and corruption
  • Executive pay
  • Board diversity
  • Board structure
  • Tax strategies

Our ESG integration approach

Exclusion

A fundamental element of SI is the role of fiduciary duty. In our view, acting as good stewards of our clients’ assets entails the avoidance of investments which are deemed undesirable. 

As such we have defined a standard set of minimum exclusions.

Screening and SI assessments

UBS AM’s portfolio managers and analysts integrate ESG considerations in UBS AM's active equity and certain fixed income strategies, leveraging a combination of proprietary methodology and tools.

ESG integration involves the assessment of the material impact of ESG issues on the investment case, which is required as part of the fundamental assessment process of fundamental analysts.  The resulting information enables portfolio managers to incorporate ESG considerations when they implement investment decisions, and allows ESG risks to be systematically monitored and compared to risk appetite and constraints.

UBS AM ESG Risk Dashboard

The UBS ESG Risk Dashboard is a proprietary ESG monitoring tool which serves as the starting point for ESG integration. 

The Dashboard allows equity and credit analysts to quickly identify companies with significant ESG risks via the "UBS ESG Risk Signal". This clear, actionable signal serves as starting point for more in-depth analysis of the underlying sources of these risks and the links to their investment cases.

UBS AM ESG Risk Signal

The ESG Risk Signal combines data points from a number of reputable external research sources based on a proprietary methodology. 

It provides investment teams with a structured, holistic view of ESG risks across four different dimensions, allowing for industry relative comparisons (expressed via the UBS ESG Consensus Score) as well as the identification of outliers. If one or more pillars fail thresholds set, the issuer is flagged for severe ESG risks by the signal.

ESG at UBS Asset Management

View our ESG and sustainable investment policy. This document explains UBS AM’s approach to sustainable investing, highlighting its implementation across the breadth of our business, from traditional asset classes to alternatives and incorporating both our active and passive investment areas.

Explore the other pages

Our climate ambition
Stewardship
Our Group Commitment
SI Quant Analytics
SI Platform

Sustainable investing strategies aim to incorporate environmental, social and governance (ESG) considerations into investment process and portfolio construction. Strategies across geographies and styles approach ESG analysis and incorporate the findings in a variety of ways. The returns on portfolios consisting primarily of sustainable investments may be lower or higher than portfolios where ESG factors, exclusions, or other sustainability issues are not considered, and the investment opportunities available to such portfolios may also differ.