Our actions, both as institutions and individuals, have very real consequences. Some we see directly and some we do not. But, whether it happens today or tomorrow, the reality of those consequences will come to haunt us, particularly those related to environmental impact. It’s why we, at UBS, have been actively working on our environmental impact for over two decades. Today's topic – forests.
First, let's sum the populations of India and Brazil. That's around 1.6 billion people. It's also the number of people who depend on forests for their livelihoods. The United Nations estimate that forests are home to 80% of all terrestrial species and yet, between 2000 and 2015, about 20% of our planet's land area was degraded.1 Much of it was destroyed to make space for cultivation of soft commodities such as palm oil, soy or beef.
As a global bank, we have a role to play.
Committing to action
In 2014, we joined the Soft Commodities Compact, launched by the Banking Environment Initiative of Cambridge University. The premise of the compact is that we should help clients who contribute to deforestation by working with them to achieve zero net deforestation by 2020. We're also a member of the Roundtable on Sustainable Palm Oil (RSPO), which aims – among other things – to help clients achieve their commitment to deforestation-free palm oil.
What happens if a client wants to do business with UBS?
All our transactions are systematically logged. If a transaction is related to soft commodities, it triggers an automatic alert for enhanced due diligence and approval processing.
During this process, our team of Environmental and Social Risk specialists do an in-depth analysis of the client's sustainability performance and the standards they adhere to. To complete the view, they also check if the client was ever flagged in media or by NGOs for unsustainable practices. Our objective is to ascertain if their operations are sustainable. In certain cases, we may engage with clients so they commit to full certification of their production by 2020. In other cases, we just say "no" (95 transactions in 2018).2
Maximizing the positive
It's not all about controlling negative impact though. As a global wealth manager, we offer solutions to invest in positive outcomes. And this type of investing is growing incredibly fast. In fact, in 2018, our sustainable assets under management grew by 72%.
Want to know more?
Meet Canopy. They are a nonprofit dedicated to eliminating the use of endangered forests for the production of paper, packaging and textiles. Their founder, Nicole Rycroft, is a UBS Global Visionary. Discover more.