2021 ESG Annual Report

VOICE OF THE CLIENT A Conversation with UBS Global Wealth Management

Making Sustainable Investing the Standard

UBS Global Wealth Management stewards $3.1 trillion* of assets for clients in 45 markets across 5 continents. We spoke to Andrew Lee, Head of Sustainable and Impact Investing, about making sustainable portfolios the “preferred choice above traditional investments” for those clients.

UBS claims to be the first truly global wealth management organization to make sustainable investing portfolios its “preferred choice above traditional investments.” What does that mean, in practice? Andrew Lee: It reflects our view that sustainability risks and opportunities matter for investment performance, and signals how important we think this dynamic will be for the development of the investment management industry. Our conversations with clients suggest that many of them share this view and are on the same path of prioritizing sustainability. Integrating sustainability at the core of our asset allocation and portfolio construction approach produces portfolio solutions that are well positioned to deliver long-term risk-adjusted returns across market cycles and meet the evolving expectations of our clients. Further, in addition to thinking about factor, style, sector, asset class and geographic balance, we also emphasize diversification from a sustainability perspective. Clients benefit from exposure to asset classes and strategies that approach sustainability differently, ranging from companies demonstrating leadership on ESG operational management, to companies whose business models address specific sustainability themes like climate change or healthcare, to development bank bonds and active strategies designed to drive positive

social or environmental impact through engagement. The universe of available (and credible) sustainable investments has expanded significantly in recent years, and we see ample potential for further innovation across asset classes and strategies in the coming years, which should accrue to investors’ benefit and support additional portfolio diversification. In 2019, UBS’s then-chairman, Axel Weber, stated that the UN Sustainable Development Goals (SDGs) will not be achieved until more people are aware of them and more solutions are available to the public. How has UBS Global Wealth Management been raising awareness of the SDGs with its clients? Andrew Lee: We embrace the SDGs as an important common framework for discussing the challenges that can be addressed by investors alongside governments, philanthropists, corporations and other key stakeholders. However, the awareness and understanding of the SDGs can vary widely among clients. We think that the financial services industry has a key role to play in raising awareness of the SDGs and mobilizing capital to address these urgent challenges.

*AUM figure as of 1Q22.



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