Climate change is one of the most significant risks that organisations face today. Yet the vast potential of physical, regulatory and technological impact is largely misunderstood.
The UN Climate Change Paris Agreement requires signatory countries to work towards reducing greenhouse gas emissions, limiting global average temperature to a maximum of 2 ̊ above pre-industrial levels and accelerating the transition to a lower-carbon economy. This requires widespread change, that will bring both risks and opportunities impacting industries around the globe.
To bring about global change, investors have a crucial role to play in urging companies to invest in climate solutions, implement TCFD disclosure recommendations and adopt a scenario analysis to assess climate-related risks and opportunities.
Some investors have chosen to simply invest in tracker funds that are benchmarked to ex-fossil fuel indices. However, by excluding any investment in fossil fuels, the passive investor is avoiding not just the risk but the opportunity of one of the major market segments. For instance, it is often the ‘oil majors’ that are the largest investors in renewable energy. Further, a blanket exclusion policy reduces influence on the means and timing of transitions.
At UBS, we believe that rather than adopt blanket exclusion policies, a more productive approach is one of proactive engagement with those companies in need of greater change. In this way we can play an active part in driving the processes which are needed to ensure effective and long-lasting solutions.
UBS has developed a Climate Aware World Equity Strategy, which aims to substantially reduce the carbon (CO2) footprint of a passive global equity portfolio, increase investment in companies benefiting from a growing demand for renewable energy and achieve long-term returns broadly in line with the net of costs and performance of a designated underlying index benchmark (e.g. FTSE Developed Index, MSCI World, etc.).
The strategy selects its investments by using a transparent, rules-based and optimised portfolio construction methodology and has generated positive results, in particular, enabling clear tilts towards renewables and away from fossil fuels.
The website contains general information about UBS Asset Management (Americas), Inc., UBS Hedge Fund Solutions LLC, and UBS O'Connor LLC, collectively known as "UBS Asset Management". The information contained on this website does not constitute investment advice or a recommendation to purchase or sell any securities or other financial instrument or any particular strategy or fund. Market commentary, product information and related performance data available on this website has been compiled from sources believed to be reliable and is provided in good faith for informational purposes only. UBS Asset Management does not guarantee the accuracy, suitability or completeness of information contained on this website, and all such information, including but not limited to performance data and related metrics, is subject to change without notice. Certain content on this website is intended for institutional investors and their financial representatives only, and should not be relied upon by retail investors or members of the general public.
Market commentary and similar statements contained herein are based on current expectations and may be considered “forward-looking statements.” Actual future results, however, may prove to be different from expectations. The opinions expressed are a reflection of UBS Asset Management’s best judgment at the time of posting, and any obligation to update or alter any forward-looking statement as a result of new information, future events, or otherwise is disclaimed.
Investments involve risks, are not guaranteed and may not return the original principal amount invested. Past performance is no guarantee of future results. Investors should read all available product information carefully before making an investment decision, including information about applicable risks, fees and expenses. This website does not address the investment objectives, risk tolerance or financial needs of any particular investor. In addition, any statements regarding investment performance expectations, risk and/or return targets do not constitute a representation or warranty that such expectations or targets will be achieved.
This website is not intended for persons located in any jurisdiction where the availability of this website is prohibited or contrary to local law or regulation or would subject any UBS entity to any registration or licensing requirement in any such jurisdiction.
Please confirm you are a US resident to proceed.