UBS Life Climate Aware World Equity Fund

Investing for generations to come

At the end of this century, our planet will likely be warmer than at any other time in human history. The impact this will have on our ecosystem, our lives and the economy will be dramatic. The UBS Climate Aware Equity strategy aims to address climate change as a systemic problem and invests in companies that will be successful in a low-carbon economy.

Why the UBS Equity Climate Aware strategy

Our low cost solution aims at providing investors with an innovative, rules-based strategy, designed to capitalize on the long-term transition to a low greenhouse gas emissions economy and invest more in companies at the heart of this transition, as well as those adapting their operating models.

Key reasons

Tilting to achieve climate objectives

The strategy applies positive and negative 'tilts' related to climate change that guide portfolio construction

Engagement and voting

Engaging directly with company's management to educate about best practices and encourage reporting of sustainability metrics

Risk mitigation

Incorporating sustainability in the investment process may lower the cost of capital and limit downside risks

Our Climate Aware philosophy and process

Our model is constructed and based on four core elements or building blocks. By combining this multi-dimensional group of metrics, we guide portfolio construction toward a set of exposures aimed at reflecting the low greenhouse gas emission economy and the beyond 2°C scenario. Our approach is innovative and forward-looking, implementing a probability-based framework to capture the inherent uncertainty surrounding carbon data. The four core elements or building blocks are:

Glide path probability

We build a quantitative model that compares a company's carbon footprint trend with the required emission reduction implied by the beyond 2°C scenario. This approach allows us to estimate the likelihood that a company will achieve those glide path targets.

Qualitative overlay

We improve the estimates of our quantitative model with a qualitative framework. We take into account whether carbon emission is reported under the Carbon Disclosure Program (CDP) and the company's disclosure related to implementation of policies, objectives and/or initiatives on carbon efficiency.

Current carbon intensity and renewable energy

We consider information about a company's direct and indirect carbon footprint (measured as intensity levels). In order to partially capture the substitution of energy sources under the beyond 2°C scenario, we incorporate information related to both the production of renewable energy and the delivery of technology to the sector.

Fossil fuel reserves and energy production

We allow underweighting companies generating electricity from coal power stations and the reduction of exposure to companies that hold proven reserves of coal, oil or gas.

Contact our experts

Whether you have a question or a request, we will be happy to get in touch with you. Contact our UBS Asset Management team for more details.