"Preparing for success in an increasingly carbon-constrained world"

Three questions to Philip Lofts, Group Environmental Representative and Group Chief Risk Officer

Philip J. Lofts

UBS has had a climate change strategy since 2006. What's new today?
Our 2006 climate change strategy was successful in substantially reducing our in-house greenhouse gas emissions and in offering niche financial products. Now, recognizing the full financial impact climate change and the related transition to a low carbon economy may have on clients, we decided to adjust our strategy and seek to embed it in all our client-facing businesses. This approach seeks to prepare our firm, and our clients, for an increasingly carbon-constrained world.

Why does UBS need a climate change strategy?
Climate change is closely intertwined with issues such as access to drinking water and food, biodiversity and energy security. These issues present significant challenges to all sections of society. Clients, investors and regulators increasingly factor environmental and social performance into their decisions. Financial institutions are expected to play a key role in the transition to a low-carbon economy. We as a firm have to ask ourselves where we can make the best contribution.

So what is the contribution of UBS as a bank?
First of all, we have a responsibility as a corporate citizen and this responsibility goes beyond energy and water consumption in our premises. As a financial institution, we can help to gear capital towards investments which mitigate climate change. Let's take UBS's energy initiative in Switzerland as an example. Its climate change-related offering spans all three segments of retail, corporate and institutional clients: our Swiss private clients benefit from the UBS "eco" mortgage and a cash benefit when building energy-efficient homes;  we incentivize Swiss SME to save energy by promoting the Swiss Energy Agency's SME Model; and the UBS Clean Energy Infrastructure Switzerland offers institutional investors access to a diversified portfolio of Swiss infrastructure facilities and companies in the field of renewable energy and energy efficiency. Through these initiatives, we use our business model and franchise in the Swiss market to add value for our clients while contributing to mitigate climate change.