The responsibilities and authorities of the Corporate Culture and Responsibility Committee (CCRC), which you chair, include "to support a strong and responsible corporate culture firmly founded in a spirit of long-term thinking." Looking at "long-term thinking" first, how do you interpret this?
Axel A. Weber (Chairman of UBS and Chair of the CCRC): The idea of thinking and acting with a long-term horizon must incorporate a number of critical perspectives, combining economic factors (e.g. strong capital base, sustained client relations) with other important considerations, notably a strong corporate culture and a responsible approach to our wider community of stakeholders.
Corporate culture and responsibility are key topics of the CCRC and it is clear that both can only be achieved through continuous effort. Take corporate culture: we have implemented a number of important measures at UBS, starting with the introduction of clearly defined principles and behaviors, the implementation of a firm-wide behavior program and, very importantly, making behaviors a determining factor in compensation. These and other measures will help us to build a strong corporate culture.
Thinking and acting with a long-term horizon also means to understand the role of our firm within society – and thus also the societal challenges that will be influencing our business in the mid- to long-term. Take climate change as a very relevant example: the FSB established a task force at the beginning of 2016, precisely with concerns about the long-term impact of this major societal challenge in mind. Owing to our comprehensive climate change strategy, UBS is actively involved in the pertinent discussions.
What do you regard as our firm's key achievements in 2015 in terms of our approach to sustainability? And what, in your view, are the key tasks and goals for 2016 and beyond?
AAW: We have decisively increased the involvement of the Board of Directors in corporate culture issues. Our commitment is to actively support and supervise the significant cultural change that the Group CEO and the Executive Board are leading. The right tone from the top clearly matters.
A second important achievement was undoubtedly the establishment and advancement of our UBS and Society initiative and, with it, our commitment to making sustainability the everyday standard at our firm.
Our activities regarding both culture and sustainability are closely intertwined with the interests of key stakeholders, in particular our shareholders, employees and clients. But both topics are also of interest to governments and regulators. We have intensified our discussions in the CCRC about the approach and actions these bodies have taken pertaining to culture and sustainability as well as those they are currently and in future envisaging to adopt.
Moreover, looking at 2016 and beyond, all of the developments highlighted above continue to be relevant. Embedding cultural change, making sustainability the everyday standard and continuing to interact with stakeholders in these areas are ongoing tasks and require continuing efforts. This is highly demanding – but essential and undeniably worthwhile!
A very important illustration of our firm's long-term focus is the UBS and Society initiative, which you highlighted. This year it features prominently in both our Annual Report and our Annual Review, and you and our Group CEO also refer to it in your Letter to Shareholders. Why does UBS attach such significance to it?
AAW: UBS and Society is an integral part of our firm's effort to fulfill its responsibilities toward its stakeholders and clients. Across all our firm's clients, be they private, corporate or institutional, we see a growing interest in, and indeed a demand for, sustainable investing. I firmly believe our bank is uniquely positioned to cater to this demand – and in fact we already do so and to an ever-greater extent, for example with the introduction of novel financial products and services such as impact investing. We provide telling examples in our Annual Report as well as an informative overview of where we stand in terms of sustainable investing overall.
But UBS and Society not only benefits our clients. It is a cross-divisional, umbrella platform covering our activities in sustainable investing and philanthropy, our environmental and human rights policies, our environmental footprint, and our firm's community interactions.
In our annual reporting, we emphasize that we are striving to make sustainability the everyday standard. How would you comment on this very strong and very ambitious commitment?
AAW: Sustainability in banking means both seizing opportunities and managing risk. For a long time people thought it was an achievement for big banks just to stay out of trouble. But I firmly believe that today the focus is shifting from "doing no harm" to "doing good." As one of many examples, we must align our client and supplier relationships with our strict environmental and social risk management standards. In the end, it's also about each one of us and our daily actions, not just as bankers, but also as consumers and citizens.
UBS's commitment to the UN Global Compact
UBS was among the first companies to sign the Global Compact in 2000. We are also a member of the UN Global Compact Network Switzerland. As reflected in detail in our 2015 sustainability disclosure (in Annual Report, Annual Review, and on ubs.com/ubsandsociety), we have a comprehensive set of commitments and activities in place pertaining to the principles of the Compact.