The COVID-19 crisis brought the vulnerability and interconnected nature of environment, societies and economies to the forefront of all our minds and demonstrated that sustainability considerations must be firmly pursued.
The crisis has demonstrated how years of sustainable thinking and acting delivered value for our firm, employees, and clients. For example, technology investments that long preceded the virus outbreak allowed us to transition from the workplace to home office with ease.
It has also become clear to all of us that we must better prepare for global systemic risks, among them climate change. If we delay any longer, the eventual costs will only increase. It’s therefore critical to take action now. The financial sector has a central role to play in particular by converting savings into investments – since the transition to a low-carbon global economy requires huge investments.
One of the major challenges, both for financial institutions and the world as a whole, remains the disclosure of social and environmental factors. Many companies have made significant progress with voluntary reporting and setting energy-transition targets, but comparing one company’s ambitions with those of another remains a challenge. Asset owners in particular want actual strategy changes, including quantifiable net-zero targets and compensation tied to outcomes. We therefore actively engage on climate topics with companies in which we invest. Sustainable finance is undoubtedly a growth area that sticks out for us, given our long-standing leadership and engagement on the topic as well as our competitive positioning. Our unique approach to sustainable and impact investing leverages all parts of UBS, from working with our corporate clients on their transition, through engaging with clients via our investment stewardship processes to providing our individual clients with the choice they need to effect the changes they want to see in the world.
We must and will be even more strategic in this area, increasing our offerings around environmental, social and governance factors so that clients’ investments are protected on more fronts. UBS is already strong in this area and we must continue to develop our position of strength.
Sustainability means thinking and acting with the long term in mind. We have an obligation to our clients, shareholders and employees to apply a long-term lens – and we also have a responsibility to society at large.