6-K
UBS Group AG (UBS)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_________________
FORM 6-K
REPORT OF FOREIGN PRIVATE
ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 UNDER
THE SECURITIES EXCHANGE ACT OF 1934
Date: March 17, 2025
UBS Group AG
(Registrant's Name)
Bahnhofstrasse 45, 8001 Zurich, Switzerland
(Address of principal executive office)
Commission File Number: 1-36764
UBS AG
(Registrant's Name)
Bahnhofstrasse 45, 8001 Zurich, Switzerland
Aeschenvorstadt 1, 4051 Basel, Switzerland
(Address of principal executive office)
Commission File Number: 1-15060
Indicate by check mark whether the registrants file or will file annual
reports under cover of Form
20-F or Form 40-
F.
Form 20-F
☒
Form 40-F
☐
This
Form
6-K
consists
of
UBS
Group
Sustainability
Report
2024,
which
appears
immediately
following this page.
Sustainability Report
2024
Thinking and acting with the long term in mind
Table of contents
Page
Introduction
1
The importance of sustainability and culture to UBS
1
About this report
3
Our integration journey – key measures taken in 2024
6
General information
7
Our business model
7
Our stakeholder engagement
9
Assessment of the significance of environmental, social and governance (ESG) topics to UBS
12
Governance
16
Our sustainability governance
16
Business conduct and corporate culture
21
Strategy
26
Our sustainability and impact strategy
26
Our key aspirations and progress
27
Environment
29
Our climate transition plan
29
Supporting our clients’ low-carbon transition
32
Reducing our own environmental impact
44
Managing the environmental impact of our supply chain
51
Supporting our climate approach: key enabling actions
54
Supporting our approach to climate – climate-related materiality assessment
56
Social
62
People and culture make the difference
62
Driving social impact
67
Respecting human rights
70
Cyber and information security
71
Supporting opportunities
72
Global Wealth Management
77
Personal & Corporate Banking
79
Asset Management
81
Investment Bank
83
Group Treasury
activities
85
Managing sustainability and climate risks
86
Sustainability and climate risk management framework
86
Risk identification and measurement
88
Monitoring and risk appetite setting
93
Risk management and control
95
Risk reporting and disclosure
97
Our investment management approach to sustainability and climate risks
98
Appendix
101
Appendix 1 – Governance
101
Appendix 2 – Social
105
Appendix 3 – Other supplemental information
108
Sustainability Report 2024
| Introduction
1
Introduction
The importance of sustainability and culture to UBS
In 2024, we made further progress
in advancing our sustainability and culture
agenda. We have done so both based
on
our commitment to further evolving UBS’s culture as well as
our continued ambition to be a leader in sustainability.
Our sustainability
and impact
strategy is
based on
three strategic
pillars: (i)
Protect
: manage
our business
in alignment
with our sustainable, long-term strategy
and evolving standards; (ii)
Grow
: embed an innovative
sustainability and impact
offering across all our business divisions; (iii)
Attract
: be the bank of choice for clients and employees.
We support our clients
in the transition to
a low-carbon world and
consider climate change risks and
opportunities across
our bank
for the
benefit of
our clients,
shareholders and
all our
stakeholders. In
2024, following
a review
of our
own
operations target for scope 1 and 2, we decided to set a revised target to reduce scope 1 and 2 emissions to net zero by
2035, which
reflects both
the integrated
organization and
latest regulatory
guidance. We
made progress
on these
key
components
of
our
climate
action
plan,
reducing
our
net
greenhouse
gas
scope
1
and
2
emissions
and
energy
consumption. For scope 3,
we remain committed to
our lending sector decarbonization
targets to address our
financed
emissions in specified sectors and have progressed on these.
We
further
advanced
on
our
multi-year
sustainability
and
climate
risk
Initiative
toward
the
goal
of
fully
integrating
qualitative and quantitative sustainability and climate risk considerations into the firm’s traditional risk management
and
stress-testing frameworks.
In
our
first
fully
consolidated
environmental,
social
and
governance
(ESG)
ratings
following
the
acquisition
of
Credit
Suisse, MSCI reaffirmed our AA ESG rating and we increased our S&P
Global Corporate Sustainability Assessment score.
Trends
In 2024,
sustainability-focused
public investment
fund markets
recorded a
new high
of USD
3.2trn. While
the level
of
inflows decreased compared
to previous years,
investors continued to
allocate to sustainability-focused
funds and ETFs.
Investments into
alternative
asset classes,
including hedge
funds, real
estate and
infrastructure,
continued throughout
- The share of sustainable investing private-market
fundraising in total reached an all-time high.
There has been a sharp rise as well as divergence
in sustainability-related regulation over the past
few years. Regulators,
particularly
in
Europe,
have
begun
to
emphasize
labeling
regimes,
introducing
new
local
criteria
for
sustainable
investment solutions.
In an
evolving
macroeconomic
and complex
regulatory
landscape, we
help our
clients
achieve
their
sustainability
and
impact objectives. The transition to a lower-carbon economy,
including the associated risks and opportunities, continues
to
be
the
main
focus
for
many
clients.
This
is
driven
both
by
their
own
ambitions
and
by
regulatory
requirements.
Additionally, there is a diversification of sustainable investing
into private markets.
People and communities
We are
dedicated to being
a world-class employer
for talented individuals
across all our
markets and a
place where people
can unlock their full
potential. Our global presence in
51 countries and jurisdictions, combined
with the expertise of
more
than 110,000 employees worldwide, helps us to create better
outcomes for our clients, communities and colleagues.
Our employees execute our business strategy and deliver on
our client promise. We therefore aim to
attract, develop and
retain employees who have the
capabilities, potential and mindset to help
us achieve those aims. Meritocracy
continues
to be at the forefront of any decision we make.
Corporate citizenship principles are embedded into our employment practices, for example,
in the benefits we offer and
in our fair pay practices.
In December 2024, we celebrated
25 years of the UBS
Optimus Foundation. During this
time, Optimus has grown
from
a small
grant-making
organization
to an
influential network
of foundations
in nine
locations working
at a
global and
local level to drive
transformative change for
marginalized communities.
In 2024, we
surpassed our goal
set in 2021 of
mobilizing USD 1bn in philanthropic capital by end of 2025,
by reaching a total of USD 1.1bn.
In 2024, we successfully engaged 32% of our global workforce in volunteering activities, many in skills-based programs.
We recognize
the importance
of continuing
this effort
for those
we support,
empowering our
participating employees
and fostering communities that also benefit our business.
Sustainability Report 2024
| Introduction
2
Our commitment
We support our clients
in understanding the impact
of climate change in
their business models,
their supply chains and
their investments, including risks
and opportunities. That is why
we contribute to the
development of methodologies and
data that enhance
transparency. However, our
climate-related ambitions and
targets depend on
the overall progress
made
by all
sectors
and
countries,
and factors
that
are
beyond
our
direct control
require
clear
guidance from
governments
through thoughtful regulations and policies.
Clients remain at the heart of what we do. We therefore remain steadfast in our commitment to be their bank of choice
and support them with offerings that meet their evolving
needs.
Colm Kelleher
Chairman of the Board of Directors
Sergio P. Ermotti
Group Chief Executive Officer
UBS was among the companies that first signed the UN Global Compact in 2000 and is also
a member of the UN Global
Compact
Network
Switzerland,
meaning
we
are
committed
to
its
principles
on
human
rights,
labor
standards,
the
environment and anti-corruption. As reflected in detail in this
report, we have a comprehensive set of goals and
activities
in place pertaining to the principles of the UN Global
Compact.
Sustainability Report 2024
| Introduction
3
About this report
Overview
The reporting period
for this UBS
Group Sustainability Report
is 1 January
to 31 December
2024, which is
aligned with
the financial reporting period
of UBS Group AG.
All 2024 data included
in the report is
therefore for this
period. Historical
data (for
2022 and
prior) pertains
to pre-acquisition
UBS, unless
otherwise stated.
Data showing
progress against
our
decarbonization
sectorial
targets
pertains
to
31
December
2023
(due
to
the
unavailability
of
relevant
2024
data,
as
explained in the respective section
of this report).
Unless otherwise noted, the information included in this report is presented at the consolidated level for UBS Group AG.
›
Refer to “Note 28 Interests in subsidiaries and other entities”
in the “Consolidated financial statements” section of
the UBS Group
Annual Report 2024, available under “Annual
reporting” at
ubs.com/investors
, for supplementary information regarding certain
significant subsidiaries
This report has been prepared with reference to the Global Reporting Initiative
(GRI) and in accordance with our Basis of
preparation. It also comprises the non-financial disclosures required for
UBS Group AG and its subsidiaries, including UBS
AG, under the Swiss Code of Obligations Art.
964b, including the Swiss Ordinance on Climate Disclosures. A
table at the
end of this report (Appendix 3) provides the references to
such non-financial information.
›
Refer to the GRI Content index, available at
ubs.com/sustainability-reporting
, for more information on the metrics with references
to GRI standards
›
Refer to the Basis of preparation document, available at
ubs.com/sustainability-reporting
, for more information on the metrics
definitions, approaches and scope
›
Refer to the “Supplement to Managing sustainability
and climate risks” section of the Supplement
to this report, available at
ubs.com/sustainability-reporting
, for information on the implementation of the environmental
risk regulations in Singapore and
the Hong Kong SAR by UBS, and disclosures in connection
with the legal entity reporting requirements of the ESG
Sourcebook in
the Business Standards section of the UK Financial Conduct
Authority Handbook, and for information pertaining
to UBS Group
AG’s approach to the “Swiss Ordinance on Due Diligence and Transparency in relation to Minerals and Metals from Conflict-
Affected Areas and Child Labor”
›
Refer to “Key terms and definitions” in the “Appendix
3 - Other supplemental information”
section of this report for terms and
abbreviations used in this report
Credit Suisse integration – explanations and related assumptions
On 12 June
2023, UBS Group
AG acquired
Credit Suisse
Group AG,
succeeding by operation
of Swiss law
to all assets
and
liabilities
of
Credit
Suisse
Group
AG,
and
became
the
direct
or
indirect
shareholder
of
all
the
former
direct
and
indirect subsidiaries
of Credit
Suisse Group
AG. UBS
Group AG
is a
holding company
and conducts
substantially all
its
operations through UBS AG, and subsidiaries thereof. UBS aims
to substantially complete the integration of Credit Suisse
into UBS by the end of 2026.
The legal structure of the UBS Group
The chart below gives an overview of our principal legal entities
and our legal entity structure.
›
Refer to the “Risk factors” and “Regulatory and
legal developments” sections and the “Integration
of Credit Suisse” section of the
UBS Group AG Annual Report 2024, available under
“Annual reporting” at
ubs.com/investors
, for more information
Sustainability Report 2024
| Introduction
4
Assurance and agreed-upon procedures
UBS’s sustainability metrics, as disclosed
in the UBS Group AG Sustainability
Report 2024, have been assured
by Ernst &
Young
Ltd, Basel (EY). EY’s
procedures covered
29 metrics subject
to reasonable assurance
in key areas
such as climate
and 230 metrics subject to limited assurance. A list
of these metrics and level of assurance can be
found in the assurance
report.
In 2024, we
also engaged
EY to
perform agreed-upon
procedures (AuP)
on our lending
sector decarbonization
targets
to assist
us
in
determining
whether
these
have
been
set
in line
with reference
scenarios
mentioned
and
informed
by
certain requirements taken from pertinent global standards
and initiatives.
›
Refer to “Appendix 3 – Other supplemental
information” in the “Appendix” section of this report
for the assurance report
›
Refer to the Lending sector decarbonization targets
AuP report, available at
ubs.com/sustainability-reporting
, for more
information on agreed-upon procedures on our lending sector decarbonization
targets
Explanation of dependencies
Certain activities of UBS that pertain to the implementation of its sustainability and impact strategy are directly impacted
by factors that UBS cannot influence directly or can only influence
in part. These include pertinent governmental actions
(e.g. when it
comes to the
achievement of the
Paris Agreement
and thus the
achievement of our
firm’s climate-related
ambitions);
the
quality
and
availability
of
(standardized)
data
(e.g.
in
such
areas
as
emissions);
the
development
and
enhancement
of
required
methodologies
and
methodological
tools
(e.g.
on
climate
risk);
the
ongoing
evolution
of
relevant definitions (e.g. sustainable finance); and the furthering of transparency (e.g. pertaining to company disclosures
of data).
Areas
where
these dependencies
are
of particular
relevance
(including,
in particular,
regarding
the examples
noted above) are explained in the relevant
sections of this report.
17 March 2025
UBS Group AG
Contacts
Information to stakeholders
about the content
of this report
is provided
by the stakeholder
management team,
part of
UBS Group Sustainability and Impact.
Sustainability Report 2024
| Introduction
5
Terms used in this report, unless the context requires otherwise
”UBS,” ”UBS Group,” “UBS Group AG consolidated,” “Group,”
“the
Group,” “we,” “us” and “our”
UBS Group AG and its consolidated subsidiaries
“UBS sub-group”
All UBS Group entities, excluding Credit Suisse AG
and its consolidated
subsidiaries, Credit Suisse Services AG, and other
small former Credit Suisse
Group entities now directly held by UBS Group AG
“UBS AG,” “UBS AG consolidated“
UBS AG and its consolidated subsidiaries
“Pre-acquisition UBS”
UBS before the acquisition of the Credit Suisse Group
“Credit Suisse AG”
Credit Suisse AG and its consolidated subsidiaries
before the merger with UBS
AG
“Credit Suisse Group” and “Credit Suisse Group AG consolidated”
Credit Suisse Group AG and its consolidated subsidiaries,
before the
acquisition by UBS
“Credit Suisse”
Credit Suisse AG and its consolidated subsidiaries
before the merger with UBS
AG, Credit Suisse Services AG, and other small former
Credit Suisse Group
entities now directly held by UBS Group AG
“UBS Group AG” and “UBS Group AG standalone”
UBS Group AG on a standalone basis
“Credit Suisse Group AG”
Credit Suisse Group AG on a standalone basis
“UBS AG standalone”
UBS AG on a standalone basis
“Credit Suisse AG standalone”
Credit Suisse AG on a standalone basis
“UBS Switzerland AG”
UBS Switzerland AG on a standalone basis
“UBS Europe SE consolidated”
UBS Europe SE and its consolidated subsidiaries
“1m”
One million, i.e. 1,000,000
“1bn”
One billion, i.e. 1,000,000,000
“1trn”
One trillion, i.e. 1,000,000,000,000
In this report, unless the context requires otherwise, references to any
gender shall apply to all genders.
Sustainability Report 2024
| Introduction
6
Our integration journey – key measures taken in
2024
In 2024,
our focus
continued to
be on
the integration
of Credit
Suisse, with
our progress
described in
the shareholder
letter in the UBS Group AG Annual Report. We have also continued the
integration process across our sustainability and
culture activities, with key measures set out in the table
below.
Governance
We advanced with the integration of governance
bodies and policies
We near-completed the integration of Credit Suisse sustainability activities
into the operational processes and structure of the UBS
Group by decommissioning further Credit Suisse governance
bodies and policies. In 2025, we aim to
fully integrate the remaining
Credit Suisse sustainability-relevant governance bodies,
policies and procedures into the overall UBS Group sustainability
governance in
accordance with the overall UBS Group integration efforts
and timeline.
Strategy
We apply our sustainability and impact strategy
Group-wide
We applied within the overarching sustainability and impact
strategy of the UBS Group a limited number of
sustainability-related
policies, processes and activities that continued
at Credit Suisse in 2024.
Environment
We progressed on our Group-wide climate ambition
We developed and introduced the Group-wide Company Transition Assessment Scorecard (CTAS), which assesses how
advanced a
company is on its transition path toward decarbonization.
We worked on defining a more strategic and scalable
toolset for calculating, monitoring and reporting
the integrated firm’s climate-
related metrics covering the financing of corporate
loans and facilitated emissions. Guided
by our technology and ESG (environmental,
social and governance) data strategy, we developed a fully cloud-based
toolset that will be fully operational in 2025.
We concluded our first integrated ISO14001
environmental management surveillance audit for
our in-house environmental program
and set a new scope 1 and 2 target reflecting the
integrated organization and latest guidance.
Social
We are building a unified culture
We leveraged a dedicated forum chaired by the Head
Group Human Resources and Corporate Services and composed
of senior
management representatives and selected external
advisors to steer culture integration across our firm.
We consolidated the former Credit Suisse Foundations with
the UBS Optimus Foundation, with the
alignment of their philanthropic
foundation program portfolios underway.
We rolled out our Group-wide Responsible Supply Chain
Management framework and our Global Procurement
and Vendor
Management Policy and Guidance to Credit Suisse.
Supporting
opportunities
We leverage
the power of the integrated firm for
the benefit of clients
We continued to align our sustainability-related governance
structures and policies and brought together our processes
and teams to
enhance collaboration and leverage our combined
strengths.
We applied UBS sustainable investing policies to the
Credit Suisse products when onboarded to the UBS shelf.
This process is being
carried out in waves and will continue until
at least the end of 2025. We continued with having
in operational use the legacy Credit
Suisse Sustainable Investment Framework (the
SIF) for Credit Suisse Wealth Management and Credit Suisse Asset
Management clients
still being serviced through the Credit Suisse systems.
Managing
sustainability
and climate
risks
We integrated the firm’s sustainability and climate risk appetite
We further enhanced our transition and physical
risk methodologies and updated the sustainable
finance and carbon and
environmental market guidelines,
to address emerging sustainability and climate risks.
›
Refer to the “Integration of Credit Suisse” section of the
UBS Group Annual Report 2024, available under “Annual
reporting” at
ubs.com/investors
, for more information
Sustainability Report 2024
| General information
7
General information
Our business model
UBS – who we are
UBS is the largest truly global wealth
manager and the leading bank in Switzerland.
These key pillars of our strategy are
enhanced by focused and competitive
investment bank and asset management
capabilities.
Staying close to our clients,
whether
they
are
individuals,
institutions
or
businesses,
and
providing
financial
advice
and
solutions
to
help
them
to
achieve their goals is of
the upmost importance to
us.
We have a capital-generative
and well-diversified business
model
with strong competitive positions
in our target markets.
Our business model, our
strong and risk-aware culture
and our
superior client service, as
well as our respected brand
with over 160 years
of history and our
capital prudence, have made
it possible to consistently
and sustainably both
grow profits and
deliver a high
return on equity over
the long term. The
acquisition of the Credit Suisse Group has further accelerated our
growth strategy by providing our client franchises with
additional scale,
complementary capabilities
and talent
in line
with our
ambition to
position UBS
for sustainable,
high-
quality returns and long-term growth.
We are focused on driving sustainable long-term growth
while maintaining risk and cost discipline
Our objective is to generate value for
our shareholders and clients by driving sustainable
long-term structural growth and
attractive
capital
returns.
To
accomplish
this,
we
are
building
on
our
scale,
content
and
solutions,
while
remaining
disciplined on capital, risk and costs.
Maintaining a balance sheet
for all seasons remains the foundation
of our success.
This gives us the capacity
to invest strategically and
will enable us to deliver
against our financial targets
and ambitions,
which are outlined in the “Targets, capital guidance and
ambitions” section of this report.
Our growth
plans are
rooted in
an attractive
business mix
that is
also a
source of
our competitive
strength. Our
asset-
gathering
businesses
are
characterized
by
being
structurally
attractive
from
a
capital
consumption
perspective
and
generate more than half of
our revenues
1
, while representing around
40% of our risk-weighted
assets (RWA)
1
. Roughly
another third of our
RWA
1
are in Personal &
Corporate Banking in Switzerland,
our home market and
an attractive, stable
and well-diversified
economy,
with low
historic credit
losses. Furthermore,
we operate
a capital-light
Investment Bank,
which is limited to 25% of Group RWA.
1
Moreover, our aim is to maximize our impact and that of
our clients to create long-term sustainable value. We also
have
a responsibility
toward the
communities we
serve and
our employees. We
have outlined
selected environmental,
social
and governance (ESG) aspirations, which we expect to
support our financial targets and ambitions.
We have a global, diversified business model
Our invested
assets of
more
than USD 6trn
are regionally
diversified across
the globe.
We give
our clients
access
to a
broad,
relevant
and
customizable
range
of
solutions,
which,
together
with
our
thought
leadership
and
capabilities,
position us well to
become their partner of choice.
Our strategic ambitions reflect the
long-term outlook on demographic
and social trends affecting wealth distribution, product demand
and client experience.
Half of our wealth management clients’ invested
assets are in the Americas, where we
are among the top players in the
world’s largest
wealth
pool, with
solid wealth
generation
prospects.
The Investment
Bank has
invested
in growing
its
Global Banking,
Global Markets
and Research
capabilities
in the
region, and
it is
focused on
cross-regional
and cross-
divisional collaboration to drive growth.
In Asia
Pacific, which is
the fastest-growing wealth
market, we are
by far
the largest
wealth manager,
2
and we
are building
on that scale to drive growth.
We are further developing
our businesses in the region
to deliver our leading capabilities,
leveraging our expanded and diversified footprint, strengths
in cross-divisional collaboration and global connectivity.
In EMEA we are focused on improving profitability and driving focused growth by optimizing our domestic footprint and
providing a comprehensive offering for entrepreneurs.
Finally, in Switzerland we have a highly
integrated business and aim to reinforce our position
as the leading bank. We are
driving our digital transformation, enhancing the client experience and improving efficiency, while focusing on capturing
selected
growth
opportunities.
We
are
also
delivering
on
our
commitments
to
our
home
market,
as
we
continue
to
provide around CHF 350bn of credit to Swiss companies
and the economy.
Sustainability Report 2024
| General information
8
We collaborate as one UBS to deliver integrated coverage
for clients
We strive
to serve
our clients
as one
firm, with
collaboration
across our
business divisions
being a
cornerstone
of our
strategy
and
a
key
differentiator,
as
we
deliver
the
best
of
UBS.
For
example,
our
asset-gathering
franchises
work
in
synergy
to
offer
clients
a
comprehensive
product
suite
paired
with
exclusive,
premium
personalized
services.
The
Investment Bank complements these by delivering
insights, execution capabilities and risk management expertise
to both
our
wealth
and
Swiss
corporate
clients.
We
regularly
enhance
this
integrated
approach
to
support
our
growth,
as
demonstrated by
recent initiatives,
such as the
establishing of
the division-agnostic
Unified Global
Alternatives and
the
creation of Global Wealth Management Solutions.
Supporting sustainability
We help our clients achieve
their sustainability and impact
objectives while navigating the
evolving macroeconomic and
complex regulatory
landscape. To
help us realize
this ambition,
our sustainability
and impact
strategy is
based on
three
strategic
pillars:
(i) Protect
–
manage
our
business
in
alignment
with
our
sustainable,
long-term
Group
strategy
and
evolving standards;
(ii) Grow –
embed an
innovative sustainability
and impact
offering across
all our
business divisions;
and (iii)
Attract
–
be the
bank of
choice for
clients and
employees.
We
support
our
clients in
the
transition
to
a
low-
carbon
world
and
consider
climate
change
risks
and
opportunities
across
our
bank
for
the
benefit
of
our
clients,
shareholders and all our stakeholders.
We are investing in our technology to drive business
outcomes
We have a proven technology strategy in place
to focus on delivery and experience for
our clients and employees, while
we are preparing for the future.
We are constantly modernizing our technology to support
an already strong foundation;
we
have
a
robust
infrastructure,
70%
of
which
is
in
the
public
and
private
Cloud,
that
maintained
over
99.999%
availability over the last year and maintains high security
standards.
This
foundation
facilitates
our
integration
and
enables
us
to
embrace
and
implement
innovation,
such
as
generative
artificial intelligence (AI), to bring technology products and
solutions to the next level.
We are
evolving into
an AI-driven
institution, using
generative
AI to
drive growth,
improve client
service, and
increase
productivity.
In the
fourth
quarter
of 2024,
we
announced
the
deployment
of 50,000
Microsoft
Copilot
licenses,
the
largest in the global financial services industry at
the time. This initiative is
already showing increased usage of generative
AI tools, with
1.75 million prompts
across all tools
in 2024,
and it is
expected to
substantially expand
in 2025.
We will
continue delivering AI initiatives across our businesses, including
re-inventing how we do software engineering.
We
invest in
partnerships
with
leading
academic
institutions
worldwide
and
other
key
players
to develop
ideas,
drive
outcomes across the firm and foster pioneering AI research.
We
are
committed
to
driving
innovation
and
excellence,
ensuring
that
our
technology
advancements
meet
the
expectations of our clients, employees, and stakeholders.
Our efforts
are supported
by our
governance and
controls that
are designed
to safeguard
the interests
of our
clients,
employees and other stakeholders.
›
Refer to the UBS Group Annual Report 2024, available
under “Annual reporting” at
ubs.com/investors
, for more information
1
Excluding Non-core and Legacy.
2
Asian Private Banker, 23 January
2024.
Sustainability Report 2024
| General information
9
Our stakeholder engagement
We engage with UBS’s stakeholders,
such as clients, employees, investors, policymakers, legislators
and regulators, along
with representatives of the business community, society and non-governmental
organizations (NGOs), on a regular basis
and on a
wide range of
topics. This
engagement helps
us to better
understand stakeholder
expectations and
concerns
and to manage
pertinent issues
and challenges.
In recent
years, the exchange
of views
and ideas with
stakeholders on
sustainability-related
issues
has
grown
in
importance.
Such
interactions
are
undertaken
through
various
dedicated
channels.
Employees
Our employees
want to
be heard
and to
be involved
in shaping
their daily
experience. As
such, we
offer opportunities
throughout
the
year
for
employees
to
connect
with
management
and
provide
feedback
on
topics
such
as
strategic
alignment, employee
engagement,
well-being, our
work environment
and line
manager effectiveness.
As an
example,
initiatives such
as our regular
Ask the
CEO event,
give employees
the chance
to learn
about (and
ask questions
about)
topics such as strategy.
Our multi-faceted
employee
listening
strategy
is adaptable,
captures
feedback
in
a
timely way
and
drives
meaningful
improvements to the employee experience. We conduct employee life cycle surveys,
short “pulse” surveys to understand
what is top
of employees’ minds and
in-depth analyses, such as
virtual focus group sessions.
In 2024, those
conversations
allowed participants from every business division and function to share their perspectives and insights on the integration
and provided employee sentiment data points to track progress. Group-wide surveys measure cultural indicators, such as
line manager effectiveness and employee experience.
Clients
Our clients’ needs and their preferred communication
channels continually evolve. Our objective is to
engage with clients
in
the
ways
most
convenient
for
them.
We
use
a
variety
of
channels,
in
particular
digital
channels
and
regular
client
relationship and service meetings, as
well as various corporate roadshows and
dedicated events, with a mix
of hybrid and
in-person events.
Global Wealth
Management
interacted
with its
clients through
a
broad range
of forums
and channels
in 2024,
from
personalized private briefings with
subject matter experts to
segment-specific virtual and in-person
events and large-scale
initiatives.
Through
marketing
and
media
campaigns,
events,
advertising,
publications
and
digital-only
solutions,
we
helped
drive
greater
awareness
of
UBS
among
prospective
clients
and
reinforced
trust-based
relationships
between
advisors
and clients.
We
proactively
engaged
with
clients
to reassure
them
about
the
acquisition
of the
Credit
Suisse
Group and highlighted the benefits
of the combined organization for
them. This was done through
individual meetings
and calls and by
opening up certain flagship events
and conferences to clients of the
combined firm. Our global footprint
means that we were
well positioned to
take advantage of the
opportunities in every region.
We have continued to
deliver
capabilities to clients,
for example
through digitally enabled
e-banking and sales
tools, while also
setting up new
units,
such
as
Global
Wealth
Management
Solutions,
Unified
Global
Banking
and
Unified
Global
Alternatives,
adding
even
greater connectivity
across all
our businesses.
We have
also continued
to roll
out artificial
intelligence (AI)
to positively
impact
our
business
and
serve
our
clients
better.
We
expect
generative
AI
will
continue
to
help
us
generate
more
personalized
advice
and
solutions
more
quickly
and
in
a
sustainable
and
responsible
way,
ensuring
a
more
efficient
experience for our clients around the globe.
Personal
&
Corporate
Banking holds
regular
client
events
(leveraging
a
number
of
formats,
such
as webcasts
and
in-
person, virtual or hybrid events), covering a wide range
of topics. In 2024, we further enhanced our digital engagement
strategies to
reach more
clients and
strengthen relationships
with existing
ones. We
utilize various
channels, including
social media, online displays, search engines and helplines,
as well as our branch network.
In Asset Management, we continue to host
our global program of client events
and engagement activities. These include
our annual
The Red
Thread
market outlook
roadshow, which
we host
in key
locations across
the world,
as well
as our
flagship
UBS Reserve Management Seminar
, which marked its 30th year of
operation in 2024. The event brings together
institutional investors
to debate
relevant topics and
share best practices,
and the accompanying
survey provides
one of
the most authoritative depictions of central banks’
investment views. Alongside this, our teams
continued the high level
of interaction
with clients
globally, supported
by digital
tools and
our publication
of macro
and thematic
insights. We
also hosted a broad range of hybrid events, including our investment
series, to help our clients better understand market
challenges and opportunities, and we continued to engage
with clients through our social media and online channels.
Sustainability Report 2024
| General information
10
The Investment
Bank hosted
more than
240 conferences
and educational
seminars
globally in
2024, providing
clients
with access
to corporations,
experts, research
and capital
introductions. The
events covered
a diverse
range of
topics,
including
macroeconomic,
geopolitical
and
sector-
and
region-specific
themes,
in
addition
to
regulatory,
product
and
market trends. More than 50,000 clients
took part in such events over
the year. We leverage our
intellectual capital and
relationships and use
our execution capabilities,
differentiated research content, bespoke
solutions, client franchise
model
and global platform to expand coverage
across a broad set of clients.
UBS Live Desk
,
built within the
UBS Neo
platform,
provides
clients
with
a
stream
of
fast-paced
commentary
from
UBS
traders.
The
UBS Analytical
Research
Community
(UBS-ARC)
is a
proprietary,
interconnected
research
network
of industry
leaders, subject
matter
specialists, executives,
academics and analysts in the Americas region.
Client feedback and surveys
We
engage
with
our
clients
on
a
regular
basis
and
on
a
wide
range
of
topics.
This
engagement
helps
us
to
better
understand
clients’
expectations
and
concerns,
including
those
pertaining
to
sustainability,
and
to
manage
pertinent
issues
and
challenges.
Feedback
received
from
clients
relevant
to
our
policies
is
considered
in
the
regular
reviews
of
policies
and
incorporated
where
applicable.
Our
client
insight
and
feedback
teams
are
responsible
for
gathering
and
processing all demands and issues raised through
our central channel, available online.
Investors
We have regular interactions
with institutional investors, financial analysts and
other market participants, such as
credit-
rating agencies, including on sustainability topics. These interactions
take place through the UBS Investor
Relations team,
with subject
matter experts
engaged as
required, and
help us
to learn
about investors’
concerns and
address them
as
effectively
as possible.
The
annual general
meeting
is also
an
open forum
for
shareholders
to voice
their
concerns
or
inquiries that may then feed into our approach on material topics.
Governments and regulators
Financial
market
stability
is
largely
dependent
on
the
overall
economic,
regulatory
and
political
environment
and
the
conduct of firms within the sector. We actively
participate in political and regulatory discussions to share our expertise on
proposed regulatory and
supervisory changes. Our
lobbying priorities
and engagements –
both direct
and indirect through
our
trade
associations
–
are
a
reflection
of
our
strategy
and
priorities.
In
Switzerland,
they
must
be
aligned
with
the
general political engagement approach defined by the
Political Board Swiss Chapter. In the US,
our lobbying priorities are
presented to and approved by the Region Americas’ top
management group at the beginning of each year.
Regarding
the
stability
of
the
financial
system,
UBS
advocates
for
an
internationally
aligned
regulatory
framework,
including capital
and liquidity
rules, anti-money
laundering and
digital regulation.
Moreover, in
the wake
of the
Credit
Suisse rescue,
we advocate
for targeted
and balanced
amendments to
the too-big-to-fail
(TBTF) framework
to address
the lessons learned from the
recent crisis
.
We also actively engage in
discussions relating to corporate
responsibility and
sustainability.
Sustainability
and
sustainable
finance
continue
to
remain
key
focus
topics
in
our
interactions
with
our
financial regulators and supervisors. These
are subject to ongoing oversight
and control by the second and
third lines of
defense.
In recognition of the vital function of Switzerland’s political parties, UBS provided a total of CHF 1.2m
1
to political parties
in
both
2023
and
2024
as
a
contribution
toward
their
operational
costs.
These
financial
contributions
are
direct
and
calculated based on the number of parliamentary seats the respective party holds
at the federal and cantonal level. Swiss
parties are eligible to apply for a financial
contribution if they commit to free competition,
the market economy and the
Swiss
financial
center.
They
should
also
have
a
national
focus
and
either
form
a
parliamentary
group
in
the
federal
parliament or be represented in at least one cantonal government.
1
Beyond the above there were no additional contributions,
including in-kind.
Sustainability Report 2024
| General information
11
Society
We regularly
interact with
various stakeholders
across broader
society. This
supports our
efforts to
consider views
and
insights from
a range
of backgrounds
and further
enhances the
experience
UBS provides
both inside
and outside
the
firm. This includes UBS’s ambition to maximize its impact in local communities in which it operates
by providing financial
and human
support through
strategic grant
making and
employee volunteering.
Our partnerships
in academia
further
contribute to our efforts to engage with thought leaders
in universities and other academic institutions.
We
also
engage
with
NGOs
and
appreciate
their
input
and
insight,
as
they
help
us
consider
our
approach
to,
and
understanding
of,
societal
issues
and
concerns.
NGOs
have
long
established
themselves
as
critical
watchdogs
of
companies, both scrutinizing and challenging how we address
a broad range of environmental, social and human
rights
concerns. In 2024, discussions with NGOs remained particularly focused on
climate change, including the transition to a
low-carbon economy. Other topics discussed included sustainable
finance, human rights and nature.
Meanwhile,
our
media
teams
maintain
direct
and
long-term
relationships
with
media
representatives
across
all
our
business regions and provide them with timely information on a wide range of global, regional and
local topics. We also
actively engage in
dialogue with analysts
at ESG rating
and research
agencies,
which helps us
to evaluate our
sustainability
performance and
activities and
provides a
useful means
for benchmarking.
In 2024,
we provided
detailed information
about our sustainability
performance to
a range
of agencies, either
in response to
questionnaires or
via calls
(with ESG
analysts) and our Sustainability Report regularly serves as
a key source of information for these agencies.
Sustainability Report 2024
| General information
12
Assessment of the significance of environmental,
social and governance (ESG) topics to UBS
Assessing
the
significance
of
ESG
topics
helps us
to ensure
that our
sustainability disclosures
reflect our
stakeholders’
expectations and
concerns. It
also informs our
discussions as
we evolve
our approach to
sustainability. Our
approach is
grounded in
recognizing the
importance of
engaging with
subject matter
experts and
listening to
key stakeholders
to
inform and evolve our sustainability strategy.
Note
: For
2024, we
have
used
the
results from
the
2023 Global
Reporting
Initiative
(GRI)-based assessment
outlined
below, as
no
material
changes
to the
assessment
were
identified.
This
assessment
supports
our
interactions
with
our
stakeholders, including regulators, that would want to understand
the relevance of ESG topics to our disclosures.
Methodology
Definitions
Our assessment
methodology was
focused on impact
reporting for
a multi-stakeholder audience.
To
assess our impact,
we
leveraged
the GRI Universal Standards 2021
revised definitions,
customizing
these
for the following:
–
The “impact” is the effect the
organization has or could have on
the economy, the environment and people, including
on their
human rights,
which in
turn can
indicate its
contribution (negative
or positive)
to sustainable
development.
Note: impacts can
be actual or potential,
negative or positive,
short-term or long-term,
intended or unintended,
and
reversible or irreversible.
–
The
“topics”
represent
the
organization’s
most
significant
impacts
on
the
economy,
the
environment
and people,
including impacts on
their human rights.
The degree of significance
(“very high,” “high” or
“medium”) was qualitatively assessed with
the help of
internal subject
matter
experts.
Their
inputs
considered
the
scale
and
scope
of
actual
or
potential
impact
(on
the
economy,
the
environment or society), the likelihood and irremediability.
Process
Our
process
consolidated
both
past
significant
topics
that
remain
relevant
and
newly
identified
topics.
In
2023,
we
refreshed
our
assessment,
starting
with
a
review
of
our
organizational
context
(i.e.
activities,
business
relationships,
sustainability context, stakeholders), before completing the three main process steps outlined below.
Step 1: Desk research
Step 2: Stakeholder consultation
Step 3: Final review
–
We developed an
initial list of topics
and
subtopics based
on internal and external
sources.
–
Integrated impact of integration of Credit
Suisse.
–
We consulted internal subject matter experts,
including those interacting
with stakeholders
directly, to add, refine and prioritize our
self-
assessed list of significant
topics.
–
We had the outcome of the assessment and
final list of topics verified by senior
management and
reviewed for
external
assurance purposes.
Organizational context
Before
identifying
our
actual
or
potential
impacts,
we
considered
the
sustainability
context
across
our
activities
and
business relationships, including:
–
our strategy;
–
our sustainable finance products and services, business relationships
and stakeholders; and
–
new products or services (for the climate materiality assessment only, pertaining to risks and opportunities).
In this context,
we identified which
stakeholders and experts
should inform the
determination of our
significant topics.
Internal subject matter experts were consulted via group
discussions.
Sustainability Report 2024
| General information
13
Governance
Reviewed
by
the
UBS
Group
Board
of
Directors’
Corporate
Culture
and
Responsibility
Committee
(the
CCRC),
the
assessment process was
managed by a group
of employees who deal
with stakeholder expectations and concerns
in their
respective
roles.
Their
regular
engagement
with
clients,
employees,
investors,
suppliers,
regulators
and
governments,
communities, and civil society ensured that the views of these stakeholders were adequately considered. The assessment
team applied the following three principles to arrive at
the outcome of the assessment:
–
Completeness: the team reviews the long and short lists and their aggregation into a prioritized list.
–
Accuracy:
the
team
challenges
the
approach,
provides
access
to
relevant
resources
and
helps
to
overcome hurdles
throughout the process.
–
Relevance: the team reviews all decisions in terms of relevance for the stakeholders they represent.
Execution
Desk research – identifying impact
We conducted
initial desk
research
to identify
general areas
where negative
or positive
impacts are
mostly likely
to be
present
relative
to
our
own
activities,
business
relationships
and
stakeholders.
During
this
scoping
exercise,
we
considered, in particular,
the internal and external stakeholder sources listed below.
Internal sources
External sources
–
UBS climate risk materiality assessment
–
UBS climate-related opportunities materiality
assessment
–
UBS’s 2022 GRI-based materiality topics list
–
G7 Communiqué
–
G20 Communiqué
–
WEF Global Risk Report
–
ECOFACT’s Top 5 Trending
Topics
–
FINMA Risk Monitor
–
Peers’ material topics disclosed
–
ECB’s climate-related risks to financial stability May 2022
–
PRI’s Strategic Plan 2021–2024
Stakeholder consultation
During
the
assessment
process,
we
considered
feedback
from
clients,
investors,
NGOs,
media,
policymakers
and
employees via polls and
open discussions. We
also regularly
gather feedback on
emerging issues and the
quality of our
reporting and impact from various sources, including other experts at our firm, stakeholder inquiries, questionnaires
and
rating firms.
Outcome
The topics considered as significant for UBS fall into three impact categories: the economy, the environment
and society.
Sustainability Report 2024
| General information
14
Significant ESG topics
1,2
Significant topics
and impact
category
Related subtopics
Description
Sustainable finance
–
sustainable and impact investing
–
sustainable financing
–
blended finance
–
financial inclusion
–
transition finance
–
natural capital and nature finance
–
engagement and stewardship
–
ESG research
As a global financial services firm, UBS has
a role to play in mobilizing
capital to support the transition to a more sustainable
world and
prevent a negative impact. Our impact arises as a result of
our business
relationships and the financial services we provide, for
example, in the
way we partner with our clients to help them
mobilize their capital
toward a more sustainable world and help protect our clients’
assets
from the impacts of climate change and loss of biodiversity.
Regulatory
compliance
–
client protection: data confidentiality;
transparency (clear terms and conditions of
products); fair pricing schemes; easy-to-
understand products and services
–
combating financial crime: anti-corruption
and
anti-money laundering; crime and manipulation
detection processes
–
conduct: compliance with laws, rules, tax
authorities and regulations; integrity of the
financial system; our Code of Conduct and
Ethics;
forward-looking engagement with risk topics and
risk prevention
–
data confidentiality
–
financial stability and resilience: going concern
leverage ratio (phase-in, %); CET1 capital
ratio;
managing risk-weighted assets within
an
increasingly stringent risk framework; clear
strategy
–
legal and litigation risk
–
responsible marketing
Our firm operates in a highly regulated industry
and compliance with
legal and regulatory requirements is a prerequisite for our license to
operate. Our impact arises as a result of how we
comply with and
navigate the ever-evolving regulatory and legal landscape
to protect
and serve the interests of all our stakeholders or
mitigate negative
impacts on them.
Climate and nature
–
our approach to environmental matters
–
environment-related investments, financing and
research
–
sustainability and climate risk management
–
energy and resource efficiency, reduction of
emissions and resource consumption (energy,
paper, water)
–
standards in product development, investments
and financing and for supply chain management
decisions
We understand that we have a responsibility to identify, manage or
mitigate potential adverse impacts on the
environment. Our impact
arises from our own environmental footprint,
which we aim to reduce
with a focus on energy, water, paper,
waste and travel.
Client experience
–
delivering excellence
–
best services and practices
–
understanding clients and their needs
Responding to clients’ expectations and delivering
exceptional service
are essential for our long-term future performance.
We aim to
differentiate our impact through our promise to deliver a client
experience that is personalized, relevant, on time
and seamless.
Technology
–
technology as a differentiator
–
front-to-back digitization to deliver a seamless
client experience
–
cyber risks, data security and protection
–
digital culture and workspaces
–
integrated digital product and service offering
–
data management (incl. ESG data management
and governance)
We are making technology a differentiator for our clients and
employees. It is our responsibility to balance the increasing
demand for
digitalization and our commitment to improve
energy efficiency. We
also need to protect our clients and operations
against the threat of
cyberattacks that could lead to negative impacts,
such as financial and
reputational damage.
Corporate
governance
–
internal policies and guidelines
–
governance structure
–
strategy
–
risk management
–
board succession planning
–
transparency
To deliver the best for our clients and stakeholders, we hold ourselves
to the highest standards and a well-defined
strategy and business
model. Our impact arises in the way we sustain
long-term business
success and contribute to sustainable growth.
We make an impact on a
truly global scale by working with other thought
leaders.
Employees
–
corporate culture
–
hiring, developing and retaining talent
–
workforce inclusion, employment conditions and
opportunities
–
flexible work arrangements
–
employee support,
including benefits,
occupational health and well-being
–
employee listening and engagement
–
performance management process, along with
fair pay
–
employee representation
We cannot succeed without our employees. That
is why we drive our
culture and foster our employees’ continuous career development.
An
effective people management strategy helps us
attract, develop and
retain talented individuals and ensures we take responsibility
as an
employer worldwide. Our impact arises in the way
we offer a place
where people can unlock their full potential, and in the
way we
support employee health and well-being.
Sustainability Report 2024
| General information
15
Social impact and
human rights
–
client philanthropic investments
–
corporate community engagement, partnerships
and volunteering
–
deploying resources (including philanthropic
capital) to support and build an impact
economy
–
sustainability and climate risk management
(including human rights)
–
standards in product development, investments
and financing and for supply chain management
decisions
We aspire to support a more inclusive society by building the impact
economy, by working with a wide range of stakeholders to help clients
that wish to maximize their impact on the
environment, health,
education and child protection, while optimizing the
contribution of
our firm to our local communities through employee
volunteering and
corporate philanthropy. To manage our supply chain’s impact, we
include ESG standards within our sourcing and procurement activities.
Operational
efficiency and
effectiveness
–
cost and process efficiency
–
focus on core competencies
–
flexibility to adapt to the changing regulatory and
public policy environment
–
outsourcing / nearshoring / offshoring,
automation
–
location strategy – product and execution
excellence
–
business disruption and vulnerability; disruption
of
the value chain
Ensuring efficient and effective operations is fundamental
to our ability
to remain competitive, to invest for the future and to
be resilient in the
face of revenue volatility. Impact occurs within our business, which in
turn affects how we serve our clients and
support our employees.
Economy
Environment
Society
1
This table is arranged in order of most to least significant impact, as the outcome of our internal assessments and pre-set threshold
to determine which topics are significant.
2
Certain activities of
UBS that pertain
to the implementation
of its sustainability
and impact strategy
are directly impacted
by factors that
UBS cannot influence
directly or can
only influence in
part. These
include
pertinent governmental actions (e.g. when it comes
to the achievement of the Paris Agreement);
the quality and availability of (standardized) data (e.g.
in such areas as emissions); the development and enhancement
of required
methodologies and
methodological tools
(e.g. on
climate risk);
the ongoing
evolution of
relevant definitions
(e.g. sustainable
finance); and
the furthering
of transparency
(e.g.
pertaining to
company
disclosures of data).
Sustainability Report 2024
| Governance
16
Governance
Our sustainability governance
The role of our supervisory bodies – the Board of Directors
of UBS Group
The
Board
of
Directors
of
the
UBS
Group
(the
BoD)
has
ultimate
responsibility
for
the
success
of
the
Group
and
for
delivering sustainable
shareholder value within
a framework
of prudent and
effective controls.
The BoD decides
on the
Group’s strategy and the
necessary financial and human
resources, on the recommendation of
the Group Chief Executive
Officer (the
Group CEO),
and also
sets the
Group’s values
and standards
to ensure
its obligations
to shareholders
and
other
stakeholders
are
met.
The
BoD
oversees
the
overall
direction,
supervision
and
control
of
the
Group
and
its
management.
It
also
supervises
compliance
with
applicable
laws,
rules
and
regulations.
The
Chairman
of
the
BoD,
together
with the
Group CEO,
takes
responsibility for
UBS’s reputation
and is
closely
involved in,
and responsible
for,
ensuring
effective
communication
with
shareholders
and
stakeholders,
including
government
officials,
regulators
and
public organizations.
As of 31
December 2024, the
UBS Group BoD
consisted of 12
non-executive members
and the Group
Executive Board
(the GEB) consisted of 15 executive members (2023: 12 and
16 respectively).
All non-executive members are also elected
as members of
the UBS
AG BoD.
Except for the
President of UBS
Switzerland AG, all
GEB members are
executive members
of UBS AG.
As of 31
December 2024, the
UBS AG BoD
consisted of
12 non-executive
members and the
Executive Board consisted
of 14 executive members.
The number of members is unchanged from
2023.
26.7%
(2023:
37.5%)
of
members
of
the
UBS Group
GEB
and
41.7%
(2023:
33.3%)
of
members
of the
BoD were
women, while for UBS
AG women made up
21.4% of members
of the Executive
Board and 41.7%
of members of the
BoD.
›
Refer to the “Corporate Governance” section
of the UBS Group Annual Report 2024, available
under “Annual reporting” at
ubs.com/investors,
for more information
The BoD’s role on ESG topics
Five committees support the BoD in fulfilling its duty through the respective
responsibilities and authority given to them.
All BoD committees
have specific responsibilities
pertaining to ESG
(environmental, social
and governance) matters.
For
example, the
Risk Committee
supervises the
integration of
ESG in
risk management,
the Governance
and Nominating
Committee
supports the
BoD in
establishing
best practices
in corporate
governance, the
Compensation Committee
is
responsible for
financial and
non-financial compensation
topics, and
the Audit
Committee has
oversight of the
control
framework underpinning ESG metrics.
›
Refer to the “Supplement to Governance”
section of the Supplement to the UBS Group Sustainability
Report 2024, available at
ubs.com/sustainability-reporting
, for more information
The BoD’s Corporate Culture
and Responsibility Committee
(the CCRC) is the
supervisory body primarily responsible
for
corporate culture and
sustainability. It is
chaired by
the Chairman of
the UBS
Group, with four
BoD members
as committee
members.
Permanent
guests
include
the
Group
CEO,
the
Group
Chief
Risk
Officer
(the
GCRO),
the
GEB
Lead
for
Sustainability
and
Impact
(S&I), the
Chief Sustainability
Officer
(the
CSO) and
the
Group
General
Counsel.
The
CCRC
oversees
our
Group-wide
sustainability
and
impact
strategy
and
key
activities
across
environmental
and
social
topics.
These include climate, nature and
human rights. Annually, it considers and
approves the firm’s sustainability and
impact
objectives.
As part
of this
process,
it also
considers
the
impact and
financial
materiality
of climate-
and sustainability-
related risks and opportunities on UBS.
The CCRC’s
function is
forward-looking in that
it monitors
and reviews
societal trends and
transformational developments
and assesses their potential relevance for the Group. In
undertaking this assessment, it reviews stakeholder concerns and
expectations pertaining to the
societal performance of UBS
and the development
of its corporate
culture. UBS has
various
mechanisms (including complaint
and feedback procedures)
in place to ensure
that such concerns and
expectations are
received, managed and, where necessary,
brought to the attention of
the GEB and the BoD.
The CCRC is also
responsible
for conducting the annual review
process for the Code of
Conduct and Ethics (the Code) and
for proposing amendments
to the BoD. This process includes a prior review of the Code
by the GEB and is led by the Group CEO.
The role of our supervisory and administrative bodies
The GEB develops the Group
strategy and is responsible
for managing our assets and
liabilities in line with that
strategy
and our regulatory commitments, and in the interests
of our stakeholders. As determined by the
BoD’s Risk Committee,
the GEB manages
the risk profile of
the Group as
a whole and has
overall responsibility for establishing
and implementing
risk management and
control. For the
management of risks,
UBS maintains a
risk governance framework. This
framework
also governs ESG risks.
Sustainability Report 2024
| Governance
17
Our risk governance
framework operates
along three lines
of defense. Our
first line of
defense, business management,
owns its
risks and
is accountable
for maintaining
effective processes
and systems
to manage
them in
compliance with
applicable
laws,
rules
and
regulations,
as
well
as
internal
standards,
including
identifying
control
weaknesses
and
inadequate processes.
Our
second
line
of
defense,
control
functions,
is
separate
from
the
business.
Control
functions
provide
independent
oversight, challenge financial and non-financial risks arising from the firm’s business activities and establish independent
frameworks for
risk assessment,
measurement, aggregation,
control and
reporting, protecting
against non-compliance
with applicable laws, rules and regulations.
Our third line of defense,
Group Internal Audit (GIA),
reports to the Chairman
of the BoD and to
the Audit Committee.
This
function
assesses
the
design
and
operating
effectiveness
and
sustainability
of
processes
to
define
risk
appetite,
governance, risk management, internal controls,
remediation activities and processes to
comply with legal and
regulatory
requirements and internal governance standards.
›
Refer to the “Non-financial risk framework”
section of the UBS Group Annual Report 2024, available
under “Annual reporting” at
ubs.com/investors
, for information about our approach to managing
non-financial risks
Ensuring (availability of) appropriate skills and expertise
The
BoD
and
the
GEB
are
well
diversified
and
composed
of
members
with
a
broad
spectrum
of
skills,
educational
backgrounds, experience
and expertise from
a range of sectors that
reflect the nature
and scope of the
firm’s business.
The Governance
and Nominating
Committee
maintains
a competencies
and experience
matrix to
identify gaps
in the
competencies
and
experiences
considered
most
relevant
to
the
BoD,
taking
into
consideration
the
firm’s
business
exposure, risk profile, strategy and geographic reach. In
recent years, the composition of the
BoD has been systematically
shaped in response to the identified requirements. We consider the continuous education of our BoD and GEB members
to be
an important
priority and
support their
participation in
various training
sessions. In
addition to
a comprehensive
induction
program
for
new
BoD
members,
continuous
training
and
topical
deep
dives
are
part
of
the
BoD
and
GEB
agenda.
Sustainability Report 2024
| Governance
18
Our sustainability governance
Our sustainability
and corporate culture
activities are
grounded in our
Principles and Behaviors
and overseen at
the highest
level of our organization. Our Code covers our commitment
to acting with the long term in mind and
creating value for
clients, employees, communities and
investors. This includes
our commitment to
protecting the environment
and fulfilling
our compliance obligations.
Integration of Credit Suisse
In
2024,
we
advanced
with
integrating
Credit
Suisse
sustainability
activities.
It
is
our
aim
to
complete
integration
in
accordance with the overall UBS Group integration efforts
and timeline.
›
Refer to “Appendix 1 – Governance”
section to this report for more information about active
and retired sustainability
governance for Credit Suisse
Group Sustainability and Impact (GSI)
GSI
develops
the
Group’s
sustainability
and
impact
(S&I)
strategy
and
oversees
the
strategy’s
implementation
by
the
business divisions and Group functions
responsible for execution.
GSI operates as a Group function under the leadership
of the GEB
Lead for S&I.
Each of the
senior managers listed
below reports directly
to the GEB
Lead for S&I.
Specifically,
the senior manager roles directly reporting to the GEB
Lead for S&I are the Chief Sustainability Officer, the Head of Social
Impact and Philanthropy and the GSI Chief Operating Officer. Senior managers may hold more than one role and, where
required, may have additional responsibilities and reporting
lines in the Group’s legal entities.
GEB Lead for Sustainability and Impact
The GEB
Lead for
S&I has
overall responsibility
for the
management and
control
of the
GSI function.
In particular,
the
GEB Lead for S&I is
responsible for the oversight of matters, such as maintaining an
appropriate and adequate functional
organization
designed
to
ensure
compliance
with
applicable
laws and
regulations.
Additionally,
where
necessary,
the
GEB Lead
for S&I
represents
UBS in
interactions with
regulatory
authorities on
Group-wide
sustainability-
and impact-
related topics in close coordination with the Group CEO, other GEB members and Governmental and Regulatory Affairs.
In relation
to disclosures,
the
annual UBS
sustainability
reporting
and disclosure
process
is managed
by the
GEB Lead
jointly with Group Finance.
›
Refer to the “Supplement to Governance“
section of the Supplement to the UBS Group Sustainability
Report 2024, available at
ubs.com/sustainability-reporting
, for an explanation and depiction of the
sustainability governance at the UBS Group, including
the main bodies involved in this governance
Chief Sustainability Officer
The Chief
Sustainability Office
r
(CSO), jointly
with the
Head of
Social Impact
and Philanthropy
(SIP), supports
the GEB
Lead for S&I
in setting the
Group-wide S&I
strategy,
in alignment with
the business
divisions and Group
functions. The
CSO and team
develop and maintain
frameworks and methodologies
to drive Group-wide
consistency.
In addition, the
CSO team monitors
new GSI regulatory
consultations and owns
and drives Group
advocacy efforts,
in partnership with
the GSI
Chief Operating
Officer (GSI
COO) and
GSI-aligned Group
functions. The
CSO maintains
and annually
reviews
our S&I commitments,
memberships or contracts
at Group, divisional,
functional or regional
level for completeness
and
alignment with the Group-wide S&I strategy
.
Sustainability Report 2024
| Governance
19
Head of Social Impact and Philanthropy
The Head of SIP and team oversee the UBS charitable entities
,
including Optimus Foundation entities and donor-advised
fund entities.
Their
remit
includes
overseeing
the
strategy,
corporate
structure
and governance,
financial
matters
and
relevant risks and controls. The SIP team reviews inherent reputational risks relating to social impact grants and escalates
high reputational
risks to
the GEB
Lead for
S&I, in
line
with the
UBS Reputational
Risk Management
Policy.
They also
manage the SIP client
and employee offering through the delivery of
philanthropic insights, advice and execution services
to existing and prospective clients.
GSI Chief Operating Officer
The GSI
Chief Operating
Officer (GSI COO)
and team
manage the
end-to-end processes and
the service
delivery, operating
and
control
environment
of
GSI,
together
with
business
divisions
and
Group
functions,
ensuring
timely
escalation
of
relevant matters
impacting GSI and
effective oversight
of operational performance.
Furthermore, they
support the GEB
Lead
for
S&I
in
developing
Group-wide
S&I
objectives,
in
alignment
with
business
divisions
and
Group
functions,
to
implement the
Group-wide S&I strategy
and monitor
the progress against
these objectives. In
addition, the team
manages
the annual UBS sustainability reporting process,
jointly with Group Finance.
Oversight of objective-setting and monitoring processes
UBS runs an
annual objective-setting
process for objectives
related to
sustainability and impact
matters, which includes
environmental
(including
climate-related)
and social
topics. As
delegated
to the
GEB Lead
for S&I
by the
Group
Chief
Executive
Officer
(the
Group
CEO),
the
GEB
Lead
for
S&I
is
responsible
for
setting
the
Group-wide
S&I
strategy
and
developing
Group-wide
S&I
objectives
in alignment
with
business
divisions
and Group
functions.
The
annual
strategy
review
and objective-setting
process
is done
to identify
priorities and
strategic focus
areas
across
the Group.
Progress
made in implementing Group-wide S&I objectives is
reported as part of UBS’s annual sustainability disclosure.
Swiss
law
requires
Swiss
companies
to
achieve
net-zero
greenhouse
emissions
in
their
own
operations
by
2050.
This
requirement is
integrated into
the firm's
methodologies and
approaches. Adherence
to these
requirements is
primarily
driven by
three
GEB
members:
the
GEB
Lead
for
S&I,
along
with risk
teams
led by
the
Group
Chief
Risk
Officer,
and
compliance teams under
the Chief Compliance
and Governance Officer,
and is
considered in the
annual GEB performance
assessments.
UBS considers
the performance
assessments
in determining
the
performance
award decisions.
However,
there is no direct link between
senior management compensation and
specific climate goals. In
line with Swiss law, and
as set out in this report, UBS has announced a climate plan to achieve net zero by 2035 across its own operations (scope
1 and 2), well ahead of the 2050 deadline.
›
Refer to the “Supplement to Governance”
section of the Supplement to the UBS Group Sustainability
Report 2024, available at
ubs.com/sustainability-reporting
, for additional information about our sustainability
governance
In 2024, to further support our
evolved S&I strategy, we revised our
GSI governance structure and internal forums,
which
now comprise the GSI Business Development & Client Forum
(the GSI BDCF) and the GSI Execution Forum (the GSI
EF).
GSI Business Development & Client Forum
The GSI
BDCF is
established under
the authority
of the
GEB Lead
for S&I.
The forum
is focused
on client,
product and
impact approaches in relation
to the overall UBS S&I implementation
activities, together with the
business divisions. The
GSI BDCF is the most senior administrative body overseeing
the Group-wide S&I activities.
GSI Execution Forum
The GSI Execution
Forum reports to the
GSI BDCF and
is established under
the authority of
the GSI COO
to help discharge
their role and responsibilities. The forum is responsible for the oversight of the front-to-back operating environment
and
for the implementation of the Group-wide S&I strategy
through Group-wide strategic objectives
and outcomes.
Other senior management roles with Group-wide sustainability
responsibilities
Chief Risk Officer Sustainability
Our management of
sustainability and climate
risk is steered
at the GEB
level. Reporting to
the Group
CEO, the
Group
Chief
Risk
Officer
is
responsible
for
developing
and
implementing
control
principles
and
an
appropriate
independent
control framework
for sustainability
and climate
risk within
UBS, together
with integrating
it into
the firm’s
overall risk
management and risk
appetite frameworks.
The Chief
Risk Officer Sustainability supports
the GEB by
providing leadership
on sustainability risk in collaboration with business divisions and
Group functions.
GSI Chief Financial Officer
The GSI
Chief Financial
Officer
(the GSI
CFO) is
the primary
lead on
sustainability topics
for the
Group
Chief Financial
Officer
(the
GCFO),
working
closely
with
the
Group
Controller
and
the
GEB
Lead
for
S&I.
The
GSI
CFO
oversees
the
external
sustainability
disclosures
and
associated
requirements
in
partnership
with
Group
Legal,
Group
Compliance,
Regulatory and Governance, Group
Risk and GSI.
The GSI CFO
additionally ensures that UBS operates
an effective control
environment, underpinning our sustainability disclosures
and reporting processes.
Sustainability Report 2024
| Governance
20
Head of Group Compliance, Regulatory & Governance (GCRG)
Sustainability
The Head
of GCRG Sustainability
is responsible
for the
integration of
ESG requirements
into the UBS
non-financial risk
framework
and
non-financial
risk
appetite
objectives
in
line
with
firm-wide
standards
as
part
of
the
broader
GCRG
mandate. GCRG
is respon
sible for
developing
the Group’s
risk management
and control
framework
for non-financial
risks
(compliance
risk,
operational
risk
control
and
financial
crime
prevention).
The
GCRG
function
provides
ongoing
monitoring of the adequacy
of our control
environment for
these risks and drives
the review
and, where necessary,
the
required adaptations to our internal frameworks to ensure that
our independent control and oversight capabilities evolve
in line with emerging regulations and changes across
business activities.
Head of Sustainable Finance Legal
The Head
of Sustainable Finance
Legal is
responsible for the
ongoing delivery of
legal advice
to the CSO,
business divisions
and Group
functions
in relation
to sustainability
matters. The
Sustainable Finance
Legal (SFL)
team acts
as a
center of
excellence fully
dedicated to
sustainability-related
legal risks
and opportunities.
This includes,
but is
not limited
to, the
interpretation of and provision of support
for the implementation of sustainability-related laws and
regulations in the EU,
the
UK,
Switzerland
and
Asia
Pacific,
and
regional
and
global
international
standards
applicable,
in
particular,
to
sustainable
products,
services
and
activities.
In
addition,
SFL
monitors
the
regulatory
developments
in
the
space
of
greenwashing
along with
sustainability-related
disputes (including
regulatory
enforcement
actions), human
rights
and
environmental due diligence regimes across
the globe.
Key sustainability topics
Climate program
The
climate
program
coordinates
the
implementation
and
execution
of
our
ambition
to
support
our
clients
in
the
transition to a low-carbon world and embed considerations of climate
change risks and opportunities in our firm for the
benefit of our
stakeholders. It does so
in line with
UBS’s fiduciary responsibilities and
includes members from the
business
divisions and
Group
functions. As
part of
the program,
our in-house
environmental
management is
steered
by Group
Real Estate and Supply Chain (GRESC).
›
Refer to the “Assurance and certification” section
of the Supplement to the UBS Group Sustainability
Report 2024, available at
ubs.com/sustainability-reporting
, for information about our application of the environmental
management standard ISO 14001
Other key sustainability topics
Human rights
As our Human
Rights Statement articulates, the
governance outlined above also
applies to our
commitment to respecting
internationally recognized human rights across UBS globally.
›
Refer to our Human Rights Statement, available
at
ubs.com/sustainability-reporting
, for more information
Sustainability Report 2024
| Governance
21
Business conduct and corporate culture
In our Code of Conduct and Ethics
(the Code), the Board of Directors (the
BoD) and the Group Executive Board (the
GEB)
set out
the
principles and
practices
that define
our ethical
standards and
the way
we do
business,
which
apply
to all
aspects of our business. The
Corporate Culture and Responsibility
Committee (the CCRC) of
the BoD is also responsible
for conducting the annual
review process for the
Code and for proposing
amendments to the
BoD. This review process
includes a prior review
of the Code by
the GEB and
is led by the
Group CEO. In undertaking
this assessment, it reviews
stakeholder concerns and
expectations pertaining to
the societal performance
of UBS and to
the development of UBS’s
corporate culture.
›
Refer to the Code of Conduct and Ethics of
UBS, available at
ubs.com/code
, for more information
Principles for identifying, preventing, escalating and managing conduct
risks are established in the Group-wide Conduct
Risk Management Framework.
These principles are
aligned to the
Code and the
Group-wide escalation framework
and
include:
–
our
strategy
and
business
model,
along
with
our
incentives
and
rewards,
which
are
designed
to
actively
manage
conduct risk.
Above all,
our culture
and our
Principles and
Behaviors are
the strongest
mitigant to
our exposure
to
conduct risk;
–
a review of relevant management
information,
which is critical to giving
a view of the risk
landscape and where risks
may be crystallizing;
–
policy,
appetite
and
governance,
which
are
key
components
of
our
conduct
risk
framework
and
contribute
to
its
sustainability.
Identifying actual or potential conduct risks is the responsibility of every UBS
employee,
who must take appropriate steps
to identify and escalate
any actual or
potential conduct risks
they may see
in their day-to-day-activities
and have a
duty
to lead by example, role model UBS’s Behaviors and support
our risk culture of “see something, say something.”
Ongoing monitoring ensures the firm’s activities and those
of employees are monitored to detect issues with a potential
impact on clients and markets and to detect individual cases
of employee misconduct.
We are committed
to incentivizing the
right behavior by
establishing reward principles
and internal control
frameworks
to support adherence to internal and external standards, laws, rules
and regulations.
Violations, whether it is
of our Code, UBS
policies or external laws, rules
or regulations, may result in
a disciplinary action,
up
to
and
including
dismissal.
Furthermore,
employees’
conduct
is
taken
into
account
in
year-end
performance
and
reward decisions.
We have a
global mandatory training
module,
Conduct and Culture,
that educates
all UBS employees
on adherence
to
the three keys to success, understanding the Code, identifying conduct risk
and how it can arise from within any part of
the organization, and culture and ethics.
Additionally, all employees must affirm annually
that they have read and
will adhere to the Code and other
key policies,
supporting a culture
where ethical and
responsible behavior is
part of our
everyday operations. By
following and affirming
the Code, we foster a culture
where responsible behavior is ingrained
in a way that protects our
clients, our people and
our reputation
and ensures
stability and
sustainable performance.
This safeguards
our ability
to create
lasting value
for
our shareholders, clients and societies.
Significant matters requiring immediate senior management
awareness and action are managed in accordance
with our
Group-wide
escalation
framework,
which
lays
out:
(i)
minimum
requirements
for
escalations;
(ii)
applicable
escalation
paths
for
distinct
governance
dimensions;
and
(iii)
the
interplay
between
governance
dimensions.
The
framework
is
complemented by relevant
divisional / functional
/ legal entity
/ local annexes
detailing specific escalation
requirements,
which outline
taxonomies, thresholds, processes and protocols. The framework
does not replace day-to-day information
exchange, decision-making mechanisms or
regular reporting. As
such, the escalation framework
does not replace
existing
governance, line management,
any of the
existing monitoring /
reporting requirements
or regular risk
assessments that
may result in the need to report and follow up.
The
firm
has
a
global
Whistleblowing
Protection
for
Employees
Policy
and
framework,
with
established
internal
whistleblower
reporting
channels,
including
hotlines
and
an
online
platform,
where
the
whistleblower
can
remain
anonymous if preferred.
All
employees
are
required
to
complete
mandatory
Speak
Up
training
every
two
years,
with
new
joiners
required
to
complete
it
upon
onboarding.
This
training
aligns
with
the
Whistleblowing
Protection
for
Employees
Policy,
raising
awareness of available
reporting channels. Throughout the
year, there are
activities such as
communication from the GEB,
newsletters, whistleblowing campaigns and regular employee surveys, aimed at encouraging
employees to speak up and
raise awareness with regard to the various whistleblower
reporting channels that can be used to raise concerns.
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For staff
receiving whistleblowing
reports, there
are procedures
and guidance
on handling
such reports
to ensure
each
whistleblowing
concern
is
taken
seriously
and
investigated.
Whistleblowing
reports
made
through
the
dedicated
whistleblowing channels
(hotlines and
online platform)
are received
and appropriately
triaged by
the relevant
Regional
Head of Investigations and their delegates (selected
investigators in their team),
who are trained on how to handle such
whistleblowing reports.
There are controls
and processes in
place to check
for potential retaliation
against known whistleblowers.
For example,
if a whistleblower is potentially
at risk of redundancy,
this individual is flagged
to the Investigations Operating
Group to
assess whether the redundancy decision is made independently
of the whistleblowing.
Our framework and
Group Investigations Policy define
clear roles and responsibilities,
including reporting requirements,
for ensuring accurate and complete quarterly reporting to
the BoD and the GEB, as well as to regulators.
Our Group
Investigations function
is responsible
for delivering
and overseeing
all investigations,
including incidents
of
corruption and bribery.
These must be conducted
and governed in a
way that ensures the
investigations are independent,
objective
and
reliable
as
defined
in
our
Group
Investigations
Policy,
which
governs
the
conduct
of
all
investigations,
including
whistleblowing
investigations.
Roles
and
responsibilities
in
the
overall
Group
Investigations
framework
are
defined at two levels: (i) cross-functional governance
bodies that have responsibilities across the investigations
portfolio;
and (ii) prescribed roles and responsibilities over certain individual
investigations.
Policy effectiveness
is assessed
through our
non-financial risk
framework. All
policies are
accompanied by
controls that
are
designed
to
prevent
non-financial
risks
from
materializing,
ensuring
UBS
operates
within
its
risk
appetite.
These
controls are
regularly evaluated
for both
design and
operational effectiveness.
Should the
firm operate
beyond its
risk
appetite or if a non-financial risk event occurs, corrective
actions are taken to return to within the defined
appetite. This
may involve remediating deficient controls, adjusting risk tolerance, modifying
the firm’s risk profile or accepting the
risk.
Independent assurance processes are in place to promptly
identify and address heightened non-financial risks.
Non-financial risks are regularly reported to the
GEB and the BoD. The
BoD oversees UBS’s risk management and culture,
approving the risk management
and control framework
of the Group. The
GEB, acting as
the risk council,
holds overall
responsibility
for
establishing
and supervising
the
implementation
of risk
management
and control
principles,
and
for
managing the
Group’s risk
profile as
determined by
the BoD
and the
Risk Committee. Monthly
reports summarize relevant
changes to the firm’s risk profile
and the Annual Non-Financial
Risk Report highlights the identified
key risk themes and
activities undertaken to manage related exposures.
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Combating financial crime
The GEB
oversees our
efforts to
combat money
laundering, corruption
and terrorist
financing. Our
first line
of defense
owns
the
anti-money-laundering
(AML)
and
terrorist-financing
risk
front
to
back
for
its
respective
clients
and
their
activities and has the primary responsibility for managing that risk. Dedicated staff
in our second line of defense support
the organization
in developing,
maintaining and
implementing Group
financial crime
programs,
including control
and
oversight.
Our
third
line
of
defense
is
the
reinforcement
component
led
by
Group
Internal
Audit
and
independently
evaluates the financial crime control frameworks.
UBS complies
with applicable laws
and regulations
and is
committed to meeting
industry standards regarding
the effective
prevention
of money
laundering
and financing
of terrorism.
We
take
comprehensive
measures
to
prevent
and
detect
non-compliance with
laws and regulations
and do
not tolerate
or facilitate
criminal activity
or breaches
of the
letter or
spirit of applicable laws, regulations, rules and policies designed to
prevent such activities.
We do not
engage in business
activities that present
unacceptably high levels
of money laundering,
fraud, sanctions or
corruption risk.
Additionally, we
do not
engage in
activities
that pose
risks that
cannot be
effectively managed
by the
existing
control
environment.
Although
it
is
not
possible
to
eliminate
such
residual
risk
entirely,
we
have
appropriate
policies, procedures, controls and processes in place to manage
the relevant risks.
We assess
the money
laundering, fraud,
sanctions and
bribery and
corruption risks
associated with
all of
our business
operations annually against our control framework and take
action, where appropriate,
to further mitigate these risks.
Public-private partnerships
We are a founding
member of the
Wolfsberg Group, an
association of global
banks that aims to
develop standards for
the
financial
services
sector
to
prevent
financial
crimes,
such
as
money
laundering,
fraud,
corruption
and
terrorist
financing,
and
to
develop
industry
standards
for
know-your-client
(KYC)
due
diligence
and
ongoing
transaction
monitoring.
The Wolfsberg Group brings together banks from around
the world at its annual forum and regional outreach meetings
focused on financial
crime topics. It
also delivers an
annual academy to
support the development of
junior Financial Crime
Prevention (FCP)
officers and
works on
guidance papers
in related
key areas
of financial
crime. UBS
is actively
involved
with this group.
We are a member of various
public-private partnerships operating globally that have been set
up to foster closer working
relationships between financial institutions
and law enforcement, most notably
the Joint Money Laundering Intelligence
Taskforce operations group in the UK, which has worked
on a number of human trafficking and modern slavery cases.
Prevention and detection of corruption and bribery
Our
Group
Policy
Against
Bribery
&
Corruption
(ABC
Policy)
is
consistent
with
the
principles
of
the
United
Nations
Convention
against
Corruption.
Our
policy
sets
out
a
zero-tolerance
approach
to
bribery
and
corruption;
UBS
is
committed
to detecting
and
preventing
bribery
and corruption
and
requires
employees
and associated
persons
to do
business in a fair and transparent manner, in compliance
with the principles of the policy.
Every employee is responsible for the following:
–
compliance with
the UBS
Group’s zero-tolerance
approach to
bribery and
corruption and
the requirements
set forth
in the policy and related procedures;
–
taking reasonable steps to detect and prevent bribery;
–
maintaining accurate books and records to fairly reflect
employees’
expenditure;
–
reporting cases of concern or doubt to Financial Crime Prevention Anti-Bribery and Corruption (FCP ABC) or based on
the Group’s Whistleblowing Protection for Employees Policy.
Delegated by
the Global
Head Financial
Crime Prevention
to Anti-Bribery
and Corruption
(ABC) Taxonomy
Owner, the
Global ABC Head, supported by
the specialized teams, is
responsible for establishing and maintaining
an ABC framework
and incorporating the
principles of the
policy as minimum
global standards.
To this end,
we have controls
in place
and
hold ourselves accountable for detecting, stopping and reporting bribery and corruption matters;
we do not tolerate any
form of corruption or bribery, including facilitating payments, nor
do we offer or accept improper gifts or payments.
The ABC framework comprises: policy,
procedures, training and communications,
risk assessments, controls across all
key
risks areas, investigations
and incident management,
and monitoring and
assurance (including
independent audit). The
framework aligns
with globally
recognized standards
and laws,
rules and
regulations designed
to prevent
and mitigate
bribery and corruption risks
across all jurisdictions in
which we operate (e.g. UK
and US legal and
regulatory requirements
for ABC frameworks
,
including the UK
Bribery Act and
the US Foreign
Corrupt Practices
Act).
There is a
global team of
dedicated
anti-bribery
and
corruption
officers
responsible
for
setting
and
maintaining
the
framework
standards.
The
board
and
senior
management
set
out
the
ABC
policies
and
risk
appetite,
and
all
employees
are
accountable
for
compliance.
The
ABC
framework
includes
controls
across
all
key
risk
areas:
employees,
third
parties
(vendors
and
intermediaries),
charitable
and
political
donations
and
sponsorships,
hiring,
gifts
and
business
entertainment,
deals,
mergers and
acquisitions, and
client-related
ABC risk.
There is
regular control
testing to
ensure that
the program
and
controls are appropriately designed, operationally effective
and adhered to in line with policy requirements.
Sustainability Report 2024
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Where corruption or
bribery incidents arise,
these are identified
through controls monitoring, self-declaration
or reporting
(e.g.
through
the
whistleblowing
mechanism)
or
through
ongoing
due
diligence
or
risk
assessments.
Each
incident
is
assessed for
severity
and impact
,
with senior
management
involved
for
the
more
serious
incidents.
Incidents
that
are
breaches of the Group’s
policies, including the
ABC Policy, are dealt
with in line with
the Employee Incidents Policy
and
framework and may result in disciplinary action, including
dismissal, in serious cases.
The ABC
risk appetite
of the
UBS Group
(including business
division appetite
and significant
Group
entity appetite)
is
defined within the
Anti-Bribery and
Corruption Risk
Appetite Statement
(RAS), which is
governed by the
Non-Financial
Risk Framework Policy and aims to
define the risk appetite of the firm
in relation to bribery and corruption risks.
The ABC
RAS is subject to annual approval and review by the Board
of Directors (the BoD).
Inherent risks for bribery and corruption
within the organization are not dissimilar to
those faced by other multinationals;
specifically, third-party risk, employee insider threat risk and client risk. The organization has a robust framework in place
to monitor and mitigate the risk of bribery or corruption arising through such inherent risk sources across all levels of the
organization.
Specifically,
the framework includes
controls coverage of
functions where such
inherent risk is
more likely
to
arise,
such
as
those
functions
and
teams
that
actively
engage
with
clients
and
third
parties
and
those
involved
in
employee hiring
(i.e. business
first-line
teams and
third-party
and employee
management
functions).
Additionally,
the
framework and policy are applicable to all employees, including
executive-
and board-level management.
The
Group
Investigations
team,
including
investigators
and
the
investigations
committee,
are
independent,
with
a
separate reporting line to the ABC framework and team
management. This allows for fair and independent investigation
of both internal or external concerns relating to bribery or
corruption.
The effectiveness
of the
ABC framework,
including incident
management reporting,
is subject
to frequent
and regular
updates at both first- and second-line management forums,
including up to the BoD. The reporting includes provision of
qualitative and
quantitative risk
indicators, covering
both inherent
and control
risk. When
a threshold
is exceeded,
this
may indicate an increased
risk of bribery and
corruption. Assessment of
these risk indicators on
a regular basis prompts
the identification of
excess(es) of the
thresholds under the
program’s risk appetite
assessments, which will
trigger a review
of whether (further)
action is deemed necessary
at a divisional /
entity and / or
Group level to avoid
undue risk, thereby
focusing on staying within the overall ABC risk appetite.
The
ABC
Policy
is
translated
into
multiple
languages
and
is
accessible
to
all
employees
through
our
internal
policy
repository and relevant
intranet ABC site.
There is mandatory
training for all employees
on the policy requirements
(see
details
below
for
further
information
on
training
provision
under
the
ABC
framework).
Furthermore,
an
annual
declaration and commitment to this
policy is required from all
UBS staff, including a statement of
compliance with regard
to any past or current bribery-
or corruption-related incidents.
In 2024, all employees
of UBS, including
its senior management
and governance bodies,
received adequate training
on
financial crime prevention
matters, which covers
AML / KYC, sanctions,
fraud and anti-corruption.
All staff are required
to complete the Global Financial Crime Prevention refresher
module on an annual basis. The frequency for each training
course is specified by the course owner (onetime, annual, bi
-annual).
ABC training is mandatory for
all UBS Group employees, including
the GEB and the BoD, and
is rolled out on an annual
basis.
All
new
joiners
are
required
to
complete
a
more
substantial
training
course
within
30
days
of
joining,
then
all
employees are
required to
complete an
annual refresher
training course
within 60
days of
rollout (with
a test
score of
80% required
to pass
). The
training covers
the
full ABC
Policy and
framework,
including topics
on risk
identification,
assessment and escalation of bribery and corruption.
Additional
targeted
training
is
delivered
online
or
in
person
to
selected
functions
on
specific
financial
crime
risks
associated with the business lines or activities they are involved
in, as needed.
Web-based training modules are regularly
updated to address compliance issues,
including financial crime standards, and
to incorporate learning from both internal and external events
and geopolitical developments.
Onboarding and ongoing monitoring
UBS performs risk-based
initial due diligence
on all customers,
which is designed
to establish their
identity and ownership,
the
nature
of their
business
activities,
and the
source(s)
of their
wealth
and funds.
This includes
formal
processes
for
mitigating the
risk of
impersonation
fraud in
circumstances
where
we are
not doing
business on
a face
-to-face
basis.
Where the client represents a
potentially elevated risk according to
the Group AML &
KYC Policy, enhanced due diligence
is performed.
We do not establish
or maintain relationships with
parties when the KYC
information cannot be
sufficiently established
or where
we have
reason to believe
the party
has or intends
to use
UBS products
or services
for illicit
activities. We
do
not
open
accounts
for
relationships
that
do
not
meet
our
standards
or
that
pose
unacceptable
financial
crime
or
reputational risks for the firm.
After a
client onboarding is
completed, ongoing
due diligence
and name
screening are
performed during
the life
cycle
of the client
relationship. Clients
are subjected
to regular
risk rating and
client activities
and transactions
are subject
to
AML transaction monitoring. In addition, ongoing periodic KYC reviews are conducted with varying frequency, driven by
the client risk rating.
Sustainability Report 2024
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25
Our Group AML & KYC Policy sets
out the process and criteria relating to the
identification, senior management sign-off,
periodic
review
and
ongoing
monitoring
of
clients
deemed
to
be
Politically
Exposed
Persons
(PEPs),
along
with
other
customers who have links with jurisdictions or industries
that pose elevated levels of financial crime risk.
We apply
KYC rules
and use
advanced technology
to help
identify suspicious
transaction patterns
and compliance
risk
issues. We continue
to invest in our
detection capabilities and
core systems as
part of our FCP
program. Red flags
must
be referred to
FCP if any
UBS staff become
aware of potentially
suspicious activities
during the client
life cycle
and this
may result in
investigation, suspicious
activity report
filing and
/ or client
exit, as
appropriate. When
a UBS
employee is
suspected of
or identified as
acting or
failing to act
in accordance
with applicable
laws or
regulations
or in
violation of
UBS policy,
we escalate
this to
Group Investigations
for further
assessment under
the Group
Investigations Policy.
Our
Group Investigations Policy
defines clear roles
and responsibilities, including
reporting requirements, for
ensuring accurate
and complete quarterly reporting to the BoD and the GEB,
as well as to regulators.
We
adhere
to
the
global Financial
Action
Task
Force
standards
and
local
laws
and
regulations
with
regard
to
record-
keeping.
Our entire financial crime
framework is subject
to regular controls testing,
in both the first
and second lines of
defense,
which includes
a cycle
of regular
peer review
testing executed
by a
designated team
within the
Group’s FCP
function.
Additionally, our Group Internal Audit
team performs a rigorous cycle
of independent audit reviews
covering the financial
crime framework globally and cross-divisionally and we are subject to ongoing supervision by regulatory authorities in all
the markets in which we operate.
Conduct and culture
The Code sets
out the principles
and commitments
that define
our ethical
standards and
the way we
do business. The
Code commits
all UBS
employees to
do whatever
we can to
combat money
laundering, fraud,
corruption and
terrorist
financing.
Additionally, the Code requires
that UBS employees do
not help or advise
our clients, or
any other party, to
evade taxes
or misreport taxable income and gains.
It also states that we should not contract
with third parties who provide services
for UBS or on our behalf, where those services help others
improperly evade taxes.
›
Refer to the Code of Conduct and Ethics of
UBS, available at
ubs.com/code
, for more information
Sustainability Report 2024
| Strategy
26
Strategy
Our sustainability and impact strategy
We are guided by
our ambition to be
a leader in sustainability.
This is reflected in
our vision to be
the bank for the
next
generation. To
help us realize
that vision,
our sustainability
and impact
strategy is
based on
three overarching
strategic
pillars: Protect, Grow and Attract, representing a natural evolution
in our strategic approach.
Sustainability and impact vision: the
bank for the next generation
Protect
Manage our business in alignment with our
sustainable, long-term Group strategy and
evolving standards.
Grow
Embed an innovative sustainability and impact
offering across all our business divisions.
Attract
Be the bank of choice for clients and employees.
Protect
As part of our continued commitment
to protect our clients’ assets and
those of our firm, we
are focused on managing
our
business
by
aligning
to
the
sustainable
long-term
Group
strategy
and
evolving
standards.
We
maintain
a
strong
control and risk
framework, as
well as a
robust sustainability
data strategy,
to support
our risk management
processes,
regulatory requirements and product offerings.
›
Refer to the “Environment” section of this report for
more information about our decarbonization approach and
efforts
›
Refer to the “Managing sustainability and climate
risk” section of this report for more information about our
sustainability and
climate risk management approach
Grow
We continue to expand
our sustainability and
impact offerings across
all business divisions
to meet our clients’
evolving
needs. For
example,
we
identify and
offer
innovative
sustainable
financing
and investment
solutions, with
the
aim to
support our clients through the world’s transition to a low-carbon economy.
To facilitate this, we established a dedicated
Group Sustainability
and Impact
(GSI) Business
Development &
Client Forum
(the GSI
BDCF) under
the authority
of the
Group Executive Board (the GEB) Lead for Sustainability
and Impact, focused on client, product and impact approaches.
›
Refer to the “Governance” section of
this report for more information about the GSI BDCF
›
Refer to the “Supporting Opportunities” section
of this report for more information about our innovative
sustainability and
impact offering
Attract
We aspire
to be
the bank
of choice
for clients
and employees
alike, maintaining
top quartile
sustainability ratings
and
positioning UBS as the go-to employer through our engagement
and education programs. In 2024, our MSCI
AA rating
was
reaffirmed
1
and we
increased
our S&P
Global Corporate
Sustainability Assessment
(CSA) score
to
72,
2
compared
with 69 in 2023.
›
Refer to the “Social” section of this report for more
information about UBS’s employees and its philanthropic activities
1
Source: MSCI ESG Ratings & Climate Search Tool, UBS Group AG ESG Rating 2024
.
2
Source: S&P Global, UBS Group AG 2024 CSA Score as of March 2025, out of a maximum of 100.
Sustainability Report 2024
| Strategy
27
Our key aspirations and progress
We work with a long-term focus on providing appropriate
returns to our stakeholders in a responsible manner.
We are
committed to
providing transparent
aspirations, goals
and targets
and reporting
on the
progress made
against
them. This table provides an overview, with more detailed
information provided throughout this report.
Ambitions
Topics
Our aspirations, goals or targets
Progress in 2024
- Protect
Climate
Lending sector decarbonization targets have been established
to
address our financed emissions by aligning specified sectors
to
decarbonization pathways.
1
Reduce emissions intensity associated with UBS in-scope lending
by 2030 from 2021 levels for:
–
Swiss residential real estate by 45%;
–
Swiss commercial real estate by 48%;
–
power generation by 60%;
–
iron and steel by 27%; and
–
cement by 24%.
Reduce absolute financed emissions associated with UBS in-scope
lending by 2030 from 2021 levels for:
–
fossil fuels by 70%.
Calculated progress against pathways for lending sector
decarbonization targets.
2
Changes in emissions intensity associated with UBS in-scope
lending
(end of 2023 vs 2021 baseline):
–
Swiss residential real estate reduced 11%;
–
Swiss commercial real estate reduced 9%;
–
power generation reduced 33%;
–
iron and steel reduced 20%; and
–
cement reduced 3%.
Changes in absolute financed emissions associated with UBS
in-scope
lending (end of 2023 vs 2021 baseline):
–
fossil fuels reduced 80%.
Reduce our scope 1 and 2 emissions to net zero by 2035 (90%
reduction of scope 1 and net scope 2 emissions by 2035
vs 2023
baseline, neutralizing the remaining 10% with high-quality carbon
removals).
Scope 1 and net scope 2 emissions reduced 35% vs 2023
baseline.
Reduce our absolute energy consumption by 35% by
2030 vs
2023 baseline.
Absolute energy consumption reduced 10% vs 2023
baseline.
Achieve 100% renewable electricity aligned to RE100 in markets
where feasible by 2026.
Achieved 99.8% renewable electricity aligned to RE100.
Environment
Paper: Use 100% recycled and Forest Stewardship Council (FSC)
paper for our operations by 2025.
Reached 49.9% share of recycled and FSC paper in our operations
in
2024.
Waste: Achieve 60% recycling ratio for our office waste by 2025.
Achieved 52.9% recycling ratio in 2024.
Water: Reduce water consumption by 5% by 2025 vs 2019
baseline.
Water consumption reduced 8% vs 2019 baseline.
- Grow
Market
opportunities
Embed an innovative sustainability and impact offering across
all
our business divisions.
Increased sustainable investing invested assets to USD 296bn
(2023:
USD 282bn).
3
Facilitated 96 green, social, sustainability or sustainability-linked
(GSSS) bond transactions globally against our target of 100 (2023:
102).
4
The total on-balance sheet drawn exposure of sustainable loans
granted to corporate and institutional clients booked on the UBS
Switzerland AG platform amounted to USD 2.0bn as of end 2024
(excluding mortgages).
5
Supporting our clients to achieve their sustainable investing
goals:
20% of Asset Management’s fund offering globally will be
sustainable-investing products, providing choice for clients.
As of end 2024, 23.4% of Asset Management’s fund offering
consisted of sustainable-investing products.
6
Sustainability Report 2024
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28
Ambitions
Topics
Our aspirations, goals or targets
Progress 2024
Social
impact and
philanthropy
Raise USD 1bn in donations to our client philanthropy foundations
and funds (cumulative for 2021
-
2025).
Achieved a UBS Optimus Foundation donation volume of USD 366m
in 2024 (2023: USD 328m), totaling USD 1.1bn since 2021,
thus
surpassing our goal (all figures include UBS matching contributions).
7
Reach 26.5 million beneficiaries by 2025 (cumulative for 2021–
2025).
Reached 7.4 million beneficiaries in 2024 (2023:
7 million)
8
and
25.9 million beneficiaries across our social impact activities
since
2021.
9
- Attract
Bank of
choice
Maintain top quartile position in key ESG ratings by the end of
2026.
Achieved top quartile position vs direct peers as defined in
UBS
compensation report in:
–
MSCI: AA rating, “Leader” in industry group;
–
S&P Global Corporate Sustainability Assessment: Score of 72.
Constituent of the Dow Jones Sustainability Indices (DJSI);
–
CDP: A– rating. Included in the leadership band.
Cautionary note:
We have developed
methodologies that we
use to set
our climate-related targets
and identify climate-related
risks and that
underly the metrics
that are disclosed
in this report.
Standard-setting
organizations and
regulators continue
to provide
new or
revised guidance
and standards,
as well
as new
or enhanced
regulatory requirements
for climate
disclosures. Our
disclosed metrics
are based
upon data
available to us, including estimates
and approximations where actual or specific
data is not available.
We intend to update our disclosures
to comply with new guidance and regulatory
requirements as they become
applicable to UBS. Such updates may result in revisions to our disclosed metrics, our methodologies
and related disclosures, which may be substantial, as well as changes to the metrics we disclose.
1
Our climate transition plan does not cover all our business activities. We may add ambitions for additional scope 3 activities
over time and on a best-efforts basis based on the availability of appropriate measurement
frameworks and data,
and the materiality
of the relevant
activity to UBS.
We will continue
to publicly disclose
our progress on
an annual basis
and, while we
continue to take
steps to align
our in-scope business
activities with the ambitions set out above, it is important to
note that progress toward our targets may not be linear. We regularly review our targets and
update our disclosures in line with new or enhanced
regulatory
developments, evolving best practices for the financial sector and climate science. Such reviews may lead us to revise previously agreed voluntary commitments,
metrics and methodologies. Metrics are based on gross
lending exposure
consisting of
total on-balance
sheet loans
and advances
to customers
and off-balance
sheet guarantees
and irrevocable
loan commitments.
Refer to
the “Basis
of preparation”
section of
the
Supplement to the UBS Group Sustainability Report 2024, available at ubs.com/sustainability-reporting for more information about exclusions and parts of the value chain
within sectors covered by metrics and targets.
2
Refer to the “Environment”
section of this report
for further information. The
inherent one-year time lag
between the as-of date
of our lending exposure
and the as-of date
of emissions can be
explained by two
factors: corporations disclose their emissions in annual reporting only a few months after the end of a financial year, and specialized third-party data providers take between 12 and 18 months to collect disclosed data
and make it available
to data users.
Consequently, the
baselines for our decarbonization
targets are calculated based
on year-end 2021
lending exposure and 2020
emissions data. Our 2023 emissions
actuals are
based on year-end 2023 lending exposure and 2022 emissions data. For asset financing (i.e.
real estate) there is no time lag, and exposure and emissions actuals refer to the same year.
3
The figures do not include
invested assets classified
under the Credit
Suisse sustainable investment
framework but include
invested assets of
Credit Suisse portfolios,
which have been
migrated onto UBS
platforms and vetted
against UBS’s
sustainable investing policies or merged with existing UBS sustainable investing portfolios. This process is being carried out in waves and will continue until at least the
end of 2025. The 2023 figure has been restated.
For more information, see the “Supporting Opportunities”
section of this report.
4
These metrics include transactions meeting the
UBS Sustainable Finance Guideline, as described
in the ”Sustainability and climate
risk policy framework“
section of the
Supplement to this
report, available at
ubs.com/sustainability-reporting.
5
Loans booked on
the Credit Suisse platform
are not in
scope of this
metric. As Credit
Suisse loans
migrate to the UBS infrastructure, a due
diligence against the UBS Sustainable Product
Guidelines framework will be performed.
6
Measured over a three-year rolling
period. The scope includes UBS Asset
Management
sponsored and
managed traditional
and alternative
funds. Mandates,
White Label,
UBS Asset
Management single
investor and
feeder funds
are excluded.
As of
2024, products
managed by
Credit Suisse
Asset
Management that are categorized in accordance with
the legacy Credit Suisse sustainable investing framework
are within the scope of the total
number of funds but not the total number
of UBS Asset Management
sustainable investing funds.
They will
only be included
once migrated
onto UBS Asset
Management product
shelves, i.e.
once corresponding
data has
been onboarded to
UBS systems,
they are
fully meeting
the
requirements of UBS’s
Group Sustainable Investing
Policy, and
are classified as
a UBS sustainable
investing product. This
process is being
carried out in
waves and will
continue at least
until the end
of 2025.
7
Figures provided for the UBS Optimus Foundation
are based on unaudited management accounts and information
available as of January 2025. Audited
financial statements for UBS Optimus Foundation entities
are
produced and available per local market
regulatory guideline.
8
Figures prior to 2024 exclude beneficiaries
reached through Credit Suisse-led programs.
9
Some of the beneficiaries reached were due to
activities
funded through mandatory contributions
required in India and
South Africa due to
respective corporate social
responsibility laws. The
cumulative reported figure does
not represent unique beneficiaries.
Where the
same individual was enrolled in a program in the previous year,
they are still counted in the following year as they are considered to have received different levels of support over the period.
Sustainability Report 2024
| Environment
29
Environment
Our climate transition plan
We have drawn
up a climate
transition plan, including
our overarching climate approach,
along with specified
key policies
and principles, targets
and actions. This
transition plan
has been approved
by the Corporate
Culture and Responsibility
Committee (the CCRC) of the Board of Directors and is included in our annual objective-setting process for sustainability
and impact matters.
›
Refer to the “Governance” section of
this report for more information about our sustainability
and climate governance and our
objective-setting process, and to “Key policies and principles”
in the “Appendix 1 – Governance”
section of this report for more
information about our sustainability-
and climate-related key policies and principles
Our climate approach
Our climate approach is guided by our climate ambition and
its underlying key objectives.
Our climate ambition
We will support our clients in
the transition to a low-carbon world
and embed considerations of climate change risks
and
opportunities into our firm for the benefit of our stakeholders,
now and in the future.
Our key objectives
Supporting our clients’ low-carbon transition
–
Mobilizing capital toward an orderly transition to a low-carbon
economy.
–
Aligning our in-scope lending activities to the objectives
of the Paris Agreement.
–
Supporting the transition of our financing and investing
clients to low-carbon and climate-resilient business models
.
–
Embedding climate considerations into our financing, investment
and capital markets offering.
Reducing our climate impact
–
Minimizing our own operational footprint and utilizing resources
in an efficient and sustainable way.
–
Measuring and managing our travel footprint, including reducing
air-travel-related emissions.
–
Interacting with our suppliers on emissions reductions and
managing our supply chain responsibly.
Managing the risks of climate change to our business
–
Identifying, measuring, monitoring, managing and reporting
sustainability and climate risks.
–
Applying our sustainability and climate risk policy framework
.
–
Further integrating
sustainability and
climate risk
regulatory requirements
into financial risk
management and
stress-
test frameworks.
–
Ensuring that the sustainability and climate risk policy framework is integrated into our Group- and organization-wide
activities.
Our climate approach
is aligned to
our sustainability and
impact strategy, which
is based on three
overarching strategic
pillars: protect, grow and attract. In relation to our climate
approach, our strategic ambition manifests as:
–
Protect
our
business
by
managing
climate
risks
and
supporting
our
clients’
low-carbon
transition
to
protect
their
assets.
–
Grow
our business by embedding an innovative UBS climate
transition offering across all business divisions.
–
Attract
and be the bank
of choice for clients and
employees by being recognized
as a leader
in climate, and leading
by example in our own operations.
›
Refer to the “Strategy” section of this report for more information
about the sustainability and impact strategy
Sustainability Report 2024
| Environment
30
Our climate-related targets
By 2050, the
global economy
aims to transition
to net
zero. For
example, across
our own
operations (scopes
1 and 2),
UBS plans to achieve net zero by 2035, well ahead of 2050.
We have defined the following targets:
Scopes 1 and 2:
Reducing our scope 1 and 2 emissions to net zero by
2035.
1
Scope 3:
Addressing our financed emissions by aligning specified
sectors to decarbonization pathways.
2
In 2024, we have updated our climate targets to consider
the following:
–
alignment with upcoming regulatory requirements and market
standards;
–
a review of the combined organization, reflecting the current
state of planning within the firm; and
–
ongoing macro-developments in public policy and climate science projections
across the sectors in which we operate.
Our climate-related targets have been set based on
the methodologies, data and assumptions currently in use. Following
a review of our own operations target
for scopes 1 and 2 (as disclosed in the
UBS Group Sustainability Report 2023)
for
the integrated
organization, we
have set
a new
1.5°C-aligned scope
1 and
2 net-zero
target to
be achieved
by 2035.
The target reflects
our enlarged corporate
real estate portfolio
following the acquisition
of the Credit Suisse
Group and
considers the latest definition of a “net-zero target” in the
Corporate Sustainability Reporting Directive (CSRD).
3
We
remain
committed
to
our
lending
sector
decarbonization
targets
to
address
our
financed
emissions
in
specified
sectors. All these targets
are 1.5°C-aligned except
for targets for Swiss
residential real estate
and Swiss commercial real
estate, which
are aligned
to a
below-2°C scenario.
4
In 2024,
we also
engaged EY
to perform
agreed upon
procedures
on
our
lending
sector
decarbonization
targets
to
assist
us
in
determining
whether
these
have
been
set
in
line
with
reference
scenarios
mentioned
and
informed
by
certain
requirements
taken
from
pertinent
global
standards
and
initiatives.
Our
Asset
Management
business
division
is
committed
to
supporting
our
clients
in
achieving
their
climate-related
investment
goals.
In
the
UBS
Group
Sustainability
Report
2023,
we
referred
to
the
target
set
by
Asset
Management
aiming, by
2030, to
align 20%
of UBS
AG Asset
Management’s total
assets under
management (AuM)
with net
zero.
Given
the
integration
taking
place
within
Asset
Management,
we
are
reviewing
the
legacy
target
set
prior
to
the
acquisition
of the
Credit
Suisse
Group,
taking
into
account
all
AuM
of the
combined
businesses.
Therefore,
we
have
withdrawn the target. We remain committed to supporting the Paris Agreement climate goals in line with global efforts.
We recorded USD 64.4bn of
total assets as having a
net-zero ambition at the
end of 2024, compared with
USD 35.5bn
at the end of 2023.
We
regularly
review
our
targets
and
update
our
disclosures
in
line
with
new
or
enhanced
regulatory
developments,
evolving best practices for the
financial sector and climate science.
Such reviews may lead us
to revise previously agreed
voluntary commitments, metrics and methodologies.
Our
climate
transition
plan
does
not
cover
all
our
business
activities.
We
may
add
ambitions
for
additional
scope
3
activities
over time
and on
a best-efforts
basis based
on the
availability
of appropriate
measurement frameworks
and
data, and the materiality of
the relevant activity to UBS.
We will continue to publicly
disclose our progress on an
annual
basis and, while we continue to take steps to align our in-scope business activities with the ambitions
set out above, it is
important to note that progress toward our targets may
not be linear.
Our priority is to support our clients in the transition to a low-carbon world, including their transition-financing needs. In
the
area
of client
investments,
our ability
to
meet
our ambitions
depends
on
our obligations
to our
clients,
including
fiduciary duties as an investment manager and
on the terms of the mandates
agreed with clients. We continue to embed
sustainability
and
climate
considerations
into
our
operating
model,
leading
to
regular
adjustment
of
evaluation
and
decision-making frameworks, governance structures, control
and monitoring processes and underlying systems.
Our climate-related
ambitions and
targets
have a
critical dependency
on the
overall
progress
made by
all
sectors and
countries. Collaboration
across the
private and
public sectors
is required.
The decarbonization
of the
global economy,
emissions reductions by clients
and the realization of
our own targets and
ambitions all depend on
various factors outside
our
direct
influence.
Clear
guidance
from
governments
through
thoughtful
regulations,
policies
and
incentives,
the
development and scaling of key technologies and broader
changes in the behavior of society are needed.
1
Refer to the “Reducing our own environmental impact”
section of this report for details about our scope 1 and 2 net-zero target.
2
Refer to the ”Supporting our financing clients’ low-carbon transition”
section of this report for details about our lending sector decarbonization targets.
3
Definition of a net-zero target by
the CSRD: Setting a net-zero target at
the level of an undertaking aligned with
meeting societal climate goals means: (i) achieving a
scale of value chain emissions reductions consistent
with the abatement required to reach global net zero in
1.5°C pathways; and (ii) neutralizing the impact of any residual emissions (after
approximately 90–95% of GHG emission reduction with the possibility of justified
sectoral variations in line with a recognized sectoral pathway) by permanently removing an equivalent
volume of CO
2
.
4
For Swiss real estate mortgage lending (commercial
and residential real estate), our targets are using
the percentage decarbonization rate implied by
the Energy Perspectives 2050+ ZERO Basis
scenario (below-2°C
scenario) as a minimum rate to
be followed. This scenario
is a representative, country-specific
pathway, reflective of
the government’s climate strategy.
It also informs Switzerland’s
decarbonization ambitions for real
estate as set out in the Swiss Climate and Innovation Act.
Sustainability Report 2024
| Environment
31
Our climate roadmap
Sustainability Report 2024
| Environment
32
Supporting our clients’ low-carbon transition
It is our priority to support our clients in the transition to a low-carbon world. To support this aim, we have defined a set
of targets and actions related to our financing and investing
activities,
which are outlined below.
Supporting our financing clients’ low-carbon transition
Our lending sector decarbonization targets
Lending sector decarbonization
targets for 2030
have been established
for Swiss real
estate mortgages (residential
and
commercial real
estate) and
for financing
of in-scope
activities in
the fossil
fuels (oil,
gas and
coal), power
generation,
iron and steel and cement corporate sectors.
Our
approach
to
target-setting
is
based
on
industry
guidance
and
our
calculation
methodology
is
based
on
global
standards
such
as
the
GHG
Protocol
Corporate
Accounting
and
Reporting
Standard
and
the
Partnership
for
Carbon
Accounting Financials (the PCAF).
Our 2030
targets
were
approved
and
are
continued
to
be overseen
by the
CCRC,
and are
managed
by the
business
divisions in collaboration with Group Sustainability and Impact (GSI)
and the Group functions under the leadership of the
Group Executive Board (GEB) Lead for Sustainability and Impact.
›
Refer to the “Climate-related methodologies – decarbonization
approach for our financing activities” section of the
Supplement
to the UBS Group Sustainability Report 2024, available
at
ubs.com/sustainability-reporting
, for more information about our
target-setting methodology and full financed emissions
disclosures
›
Refer to the “Basis of preparation” section of the
Supplement to the UBS Group Sustainability Report
2024, available at
ubs.com/sustainability-reporting
, for more information about our climate-related lending metrics
Sustainability Report 2024
| Environment
33
Decarbonization levers and key actions underpinning our lending
sector decarbonization targets
To
underpin our lending sector decarbonization targets, we assessed the impact of two decarbonization levers. Through
lever 1,
we assess
the effects
of our
clients’ disclosed
decarbonization
commitments
on our
future
expected portfolio
intensities. Lever 2 focuses on managing our portfolio to achieve
the remaining required
intensity reductions.
In
addition,
we
identified
key
actions
relevant
to
both
levers,
outlining
how
we
support
our
clients
in
realizing
their
decarbonization
commitments
and how
we manage
our portfolio
toward achieving
our targets:
i) providing
products
and services;
ii) engaging
with clients;
and iii)
monitoring progress
against targets
through our decarbonization
control
framework.
Lever 1: Clients’ disclosed decarbonization commitments
To
understand
the
current
decarbonization
ambitions
of
our
clients,
we
conducted
a
review
of
our
clients’
currently
disclosed decarbonization commitments and transition plans. On this basis, we assessed the future potential aggregated
reduction
of our
portfolio
intensities for
the power
generation,
iron and
steel and
cement sectors,
assuming that
our
clients realize their decarbonization commitments and transition plans. Through
actions 1 and 2 outlined below, we aim
to support our clients in realizing their
decarbonization commitments.
Sustainability Report 2024
| Environment
34
We
recognize
that
our
clients’
realization
of
their
emission
reductions
has
dependencies
on
various
factors
and
that
financial
institutions
have
limited
direct
influence
over
clients’
transition
abilities
or
the
speed
at
which
the
transition
happens. We constantly track our clients’ progress toward their
disclosed commitments and assess the influence of them
meeting their commitments on our own trajectories.
Lever 2: Portfolio management
To work toward the remaining required reduction of
our portfolio intensities
to realize our lending
sector decarbonization
targets,
we
aim
to
manage
our
portfolio.
This
can
be
done
at
the
business
selection
stage,
which
is in
line
with
our
sustainability risk
process.
It may
trigger enhanced
due diligence
for transactions
in carbon-intensive
sectors that
have
higher
climate-related
impacts
and
risks,
as
well
as
trigger
the
pre-deal
assessment
review
of
deals
against
our
set
decarbonization
thresholds.
It can
also be
done through
the exit
from
or maturity
of our
Non-core
and Legacy
loans,
which contribute
to the
adjustment of
our lending
exposure and
associated carbon
intensity.
Through actions
1 and
2
outlined below, we aim
to support our clients’ climate transition,
while action 3 allows us to track our performance
and
manage progress toward our
targets.
Although
we
continue
to
take
steps
to
align
our
in-scope
business
activities
with
our
decarbonization
targets,
it
is
important to note
that progress toward
our targets may
not be linear.
Our priority is
to support our
clients in the
transition
to
a
low-carbon
world,
and
their
transition-financing
needs.
Collaboration
across
the
private
and
public
sectors
is
required.
The
decarbonization
of
the
global
economy,
emission
reductions
by
clients
and
the
realization
of
our
own
targets and ambitions all depend
on various factors outside our
direct influence. Clear guidance by governments
through
thoughtful regulations, policies and incentives, the development and scaling of key technologies and broader changes in
the behavior of our society are needed.
›
Refer to "Non-core and Legacy" in the "Our businesses"
section of the UBS Group Annual Report 2024,
available under "Annual
reporting" at
ubs.com/investors
, for more information
Action 1: Providing products and services
We
offer
sustainable
and
sustainability-linked
financial
advice
and
solutions
(advisory,
lending,
basic
banking
and
transition financing
solutions) to
support our
clients’ climate
transition. These
solutions can
be on-balance
sheet
(e.g.
green or sustainable loans and mortgages) or
off-balance sheet (e.g. access to debt
and equity capital markets). They can
also include transaction structuring.
For example, in Personal &
Corporate Banking, we offer
sustainability-linked loans (SLLs) to
incentivize the borrowers to
achieve their sustainability performance targets. Our SLL offering is open
to eligible corporate clients from all sectors that
wish to reflect
their sustainability
ambitions in
their funding
strategy and
to benefit
from meeting agreed
sustainability
performance targets.
The SLLs have
specific sustainability-related
key performance indicators
that are agreed
with each
client.
We continue to develop and refine our sustainable finance
solutions and approaches on an ongoing basis.
›
Refer to the “Supporting Opportunities” section
of this report for more information about our sustainable
finance product and
service offering, and specifically to the “Personal &
Corporate Banking” section for more information about
our corporate client
business
Action 2: Engaging with clients
In 2024, to support
our review of
our clients’ disclosed decarbonization
commitments and transition
plans (lever 1), we
developed the
Company Transition Assessment Scorecard (CTAS). The CTAS was
designed to
support a range
of purposes
in the future, including
the support of our clients’
climate transition through
engagement. By understanding our
clients
better,
we aim
to work
alongside them
to assist
with their
climate transition
efforts. This
can include
encouraging the
disclosure of current emissions, setting
future decarbonization targets in line
with Paris Agreement-aligned pathways and
developing credible transition plans.
›
Refer to the “Supporting our climate approach: key
enabling actions” section of this report for
more information about the CTAS
Action 3: Monitoring progress against targets through our
decarbonization control framework
We
implemented
a
decarbonization
control
framework
to
track
our
performance
and
manage
progress
toward
our
lending sector decarbonization targets. This framework has
been approved at GEB level and
has been integrated into our
sustainability and climate risk policy framework.
For in-scope
sectors,
the
performance
and associated
changes
in
the
lending
portfolio
are
discussed
during
quarterly
performance reviews with business division representatives
(Global Wealth Management, Personal & Corporate
Banking
and the Investment
Bank) and our
sustainability and climate
risk unit. This
includes an analysis
of trends and
significant
changes in exposures,
emissions or criteria that
are deemed to influence
the target metrics. Possible
measures to be taken
by the business divisions are also discussed.
For
in-scope
corporate
sectors
for
which
decarbonization
targets
have
been
set,
we
have
established
a
pre-deal
assessment
process
to
review
the
impact
of
relevant
transactions
that
are
within
the
scope
of
our
lending
sector
decarbonization targets.
For each
in-scope sector,
risk tolerance
thresholds have
been defined
at business
division and
Group levels. An internal tool enables the business divisions to evaluate the potential impact of a new
transaction on the
portfolio. An escalation process has
been put in place
should a transaction exceed these
thresholds. Transactions are then
also reviewed by
the business division
representatives and
can be further
escalated up to
GEB level if
required. The
risk
tolerance thresholds are
defined annually and the
utilization of the
agreed thresholds is monitored
on a quarterly
basis.
Relevant staff in the business divisions have been trained on these
requirements.
Sustainability Report 2024
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35
Performance against targets and outlook
For the
in-scope lending
sectors for
which decarbonization
targets
have been
set, the
following sections
describe,
for
each sector:
–
the scope of the target and relevance for our business divisions;
–
the progress
against the
sector
target
and the
indicative
trend
line,
including the
main
drivers for
the reduction
or
increase of absolute emissions / emissions intensity;
–
the impact of the
decarbonization levers and a description
of key actions taken,
where relevant (note that not
all levers
apply to all target sectors); and
–
a description of the key dependencies.
Our lending
sector decarbonization
targets have
a critical
dependency on
the overall
progress made
by all
sectors and
countries.
Swiss residential real estate
The
scope
of
the
decarbonization
pathway
for
residential
real
estate
lending
is
limited
to
our
financing
activity
in
Switzerland across Personal & Corporate Banking
and Global Wealth Management.
The required 45% reduction
to realize our 2030
target is slightly
more ambitious than
the decarbonization rate
implied
by the Swiss government’s Energy
Perspectives 2050+ ZERO Basis (EP
2050+) scenario for residential
buildings,
which is
44%.
For
the
target
scope,
this
scenario
is
a
representative,
country-specific
pathway,
reflective
of
the
government’s
climate strategy. The
EP 2050+ also informs
Switzerland’s decarbonization ambitions for real
estate as set
out in the
Swiss
Climate and Innovation Act.
As
at
the
end
of
2023,
our
estimated
emissions
intensity
for
the
portfolio
had
decreased
by
11%
against
the
2021
baseline,
with an
emissions
intensity
of
34.4
kg
CO
2
e
/
m
²
ERA
(Energy
Reference
Area).
The
reduction
was
primarily
driven by an increased share
of financed properties with
non-fossil-fuel heating. Our estimated
emission intensity is 1%
below the 2023 level of our indicative trend line to 2030
(34.8 kg CO
2
e / m
²
ERA).
To further decarbonize our real estate
portfolio in alignment with the Swiss
government’s decarbonization ambitions, we
remain dependent
on technical
advances and
concerted policy
action, for
example,
by incentivizing
improved building
efficiency and the use
of non-fossil-fuel heating systems. We
will continue to work
with the government and
our industry
peers to align on the required actions.
We remain committed to
doing our part and
supporting our clients in reducing
the emissions intensity of their
properties.
This includes raising the awareness of our existing and prospective clients regarding the climate impact
of real estate and
helping our existing
clients decarbonize their properties
through renovations. For example,
we provide access
to an online
renovation journey and calculator
for owner-occupied real
estate,
enabling our clients to
work out expected
renovation
costs and
timelines, the
CO
2
e emissions
footprint and
the energy
consumption levels
before and
after renovation.
For
renovations or acquisitions
of energy-efficient properties, we offer preferential financial conditions to clients through our
UBS
Mortgage
Green,
UBS
Mortgage
Energy
and
UBS
Mortgage
Renovation
products.
In
2024,
our
partner
Norm
Technologies launched an
offering for our
new and existing
mortgage clients to
carry out a
tailored, digital energy
analysis
for them to gain an improved understanding of the climate
impact of their properties.
Swiss commercial real estate
The
scope
of
the
decarbonization
pathway
for
commercial
real
estate
lending
is
limited
to
our
financing
activity
in
Switzerland across Personal & Corporate Banking
and Global Wealth Management.
The required
48% reduction
required to
realize our
2030 target
is in
line with
the decarbonization
rate implied
by the
Swiss government’s EP 2050+ scenario for residential buildings
and services, which is also 48%.
As at
the end of
2023, our
estimated emissions intensity
for the
portfolio had decreased
by 9% against
the 2021 baseline,
with an
emission intensity
of 28.5
kg CO
2
e / m
²
ERA. The
reduction was primarily
driven by
an increase
in the share
of
financed properties
with a
good-quality building
envelope that
reduces
heat loss.
Our estimated
emissions intensity
is
2% above the 2023 level of our indicative trend line to 2030 (28.0
kg CO
2
e / m
²
ERA).
To further decarbonize our real estate portfolio
in alignment with the Swiss government’s decarbonization
ambitions, we
remain dependent
on technical
advances and
concerted policy
action, for
example,
by incentivizing
improved building
efficiency and the use
of non-fossil-fuel heating systems. We
will continue to work
with the government and
our industry
peers to align on the required actions.
We remain committed to
doing our part and
supporting our clients in reducing
the emissions intensity of their
properties.
This includes
helping our
existing clients
to decarbonize
through renovations
and providing
the respective
financing. In
2024, we launched the UBS Loan Green,
which is designed for clients planning new low-energy constructions or
energy-
efficient
renovations,
or
purchasing
energy-efficient
properties.
The
product
provides
tailored
financing
and
comprehensive expert advice and accepts various building
certifications.
Furthermore, in 2024, we teamed up with Wincasa, a leading Swiss
property services provider, to launch a new advisory
solution, UBS Renovation Services, for investment property owners planning energy upgrades. The service offers
tailored
analysis
of
the
renovation
potential,
a
detailed
feasibility
study
and
coordination
of
construction
planning
and
management through a network of specialized real estate
companies.
Sustainability Report 2024
| Environment
36
Fossil fuels (oil, gas and coal)
Our fossil
fuel portfolio
is concentrated
in a
small number
of corporate
clients in
the Investment
Bank and
Personal &
Corporate Banking with limited exposure from
Global Wealth Management.
As at the
end of 2023,
our estimated total
financed emissions for the
fossil fuels portfolio have
decreased by 80% against
the 2021
baseline,
accounting to
12.9 million
metric tons
of CO
2
e. From
2021 to
2022, there
was a
29% reduction,
primarily driven by an overall
reduction of the financed
portfolio and a significant
decrease in exposure to coal.
In 2023
our portfolio had a number of loans that were classified as non-core, and as of 31 December
2023, these loans were no
longer
held in
line
with the
strategy
of the
Group, primarily
driving
the
remaining
reduction.
Our estimated
financed
emissions are 76% below the 2023 level of our indicative
trend line to 2030 (54.6 million metric tons of CO
2
e).
With the remaining concentrated portfolio, we
would not expect the same
level of emission reductions over
the next few
years. Achieving our target requires collaboration
across the private and public
sectors due to the reliance on fossil
fuels
for energy security and because it is the most affordable
source of energy in many countries.
Power generation
Our power
generation portfolio mainly
consists of
corporate clients in
the Investment Bank,
Personal &
Corporate Banking
and Global Wealth Management.
As
at
the
end
of
2023,
our
estimated
emissions
intensity
for
the
portfolio
had
decreased
by
33%
against
the
2021
baseline, with an
emissions intensity of
227 kg CO
2
e / MWh.
The reduction was primarily
driven by a
decrease in exposure
to clients with
relatively high
carbon intensity, including
loans that were
classified as non-core.
In Personal &
Corporate
Banking,
our clients
in the
power
generation
sector,
who
have
a
significant
share
of renewable
energy
production in
Switzerland,
further
contributed
to
our
emissions
intensity
being
below
the
International
Energy
Agency
(the
IEA)
benchmark. Our estimated
emission intensity is
23% below
the 2023 level
of our indicative
trend line to
2030 (294 kg
CO
2
e / MWh).
We expect a
further decrease in
intensity based on
our assessment of
our clients’
disclosed decarbonization commitments,
assuming that our clients realize those decarbonization commitments.
We aim to manage our portfolio by engaging with our clients to support them in adapting their energy mix
and increase
our own exposure
to sources
of energy
with lower
emissions. We
expect the
reduction of
loans that
were classified
as
non-core to further contribute to a decrease in the portfolio intensity.
Reaching our
target requires
collaboration across
the private
and public
sectors. The
sector remains
dependent on
the
right policies,
incentives and
frameworks to
be in place.
Recent data
indicates that
investment of
around USD 2trn
per
annum is going toward clean energy,
which represents two thirds of the
global energy investment. This increase is
mainly
driven by emissions reduction targets and the need to guarantee
energy security.
1
Iron and steel
Our iron and steel portfolio
is concentrated in a
small number of clients in
the Investment Bank and Personal
& Corporate
Banking with limited exposure from
Global Wealth Management.
As
at
the
end
of
2023,
our
estimated
emissions
intensity
for
the
portfolio
had
decreased
by
20%
against
the
2021
baseline, with an emissions intensity of
1.41 metric tons of CO
2
/ metric ton of steel.
The reduction was primarily driven
by existing clients reducing their carbon intensities, a decrease in
loans that were classified as non-core, and an increased
share of exposure to
secondary steel production clients
with lower intensities.
Our estimated emissions intensity
is 14%
below the 2023 level of our indicative trend line to 2030
(1.64 CO
2
/ metric ton of steel).
We expect a
further decrease in
intensity based on
our assessment of
our clients’
disclosed decarbonization commitments,
assuming that our clients realize those decarbonization commitments.
We will continue
to finance our
clients’ transition to
support shifting production
to reduce the
sector’s reliance on
coal
while increasing scrap production and the use of direct reduction and
electric arc furnaces.
Reaching our
target requires
collaboration across
the private
and public
sectors. The
sector remains
dependent on
the
commercialization
and scaling
up of
low-carbon
steelmaking
technologies,
which requires
research and
development,
and robust policy and market incentives.
Cement
Our cement portfolio consists of corporate clients in Personal
& Corporate Banking and the Investment Bank.
As at
the end of
2023, our
estimated emissions intensity
for the
portfolio had decreased
by 3% against
the 2021 baseline,
with an emissions
intensity of 0.62
metric tons
of CO
2
/ metric ton
of cementitious.
The reduction was
primarily driven
by a
decrease in
intensity by
our existing
clients.
Our estimated
emissions intensity
is 2%
above the
2023 level
of our
indicative trend line to 2030 (0.60 metric tons of CO
2
/ metric ton of cementitious).
1
https://www.iea.org/reports/world-energy-investment-2024/
Sustainability Report 2024
| Environment
37
We believe
our main
clients in
the cement industry
are best
in class
in terms
of ESG (environmental,
social and
governance)
disclosures
and
externally
verified
emissions
reduction
targets,
some
of
which
include
interim
2030
targets.
We
will
continue
to
finance
our
clients’
transition,
potentially
increasing
our
exposure
with
appropriate
sustainability-linked
product offerings or project ring-fencing,
and advising on various transactions,
such as the acquisition of assets, disposal
of certain business lines, equity raises and share buybacks.
Reaching our
target requires
collaboration across
the private
and public
sectors. The
sector remains
dependent on
the
right policies
and incentive
frameworks being
in place.
Specifically in
the cement
sector, production
emissions intensity
has remained flat in recent years, highlighting the need for
technological disruption.
UBS AG 2024 Poseidon Principles disclosure (shipping)
The Poseidon
Principles are
a framework
for assessing
and disclosing,
on an
annual basis,
the climate
alignment of
in-
scope ship finance
portfolios (individual vessels
weighted by their
loan exposure with
the reporting financial
institution)
to the ambition of the International Maritime Organization (the
IMO), including its 2023 Revised GHG Strategy for
GHG
emissions from international shipping to decrease
to net zero by or around 2050
with interim targets in 2030 and 2040
on a well-to-wake (WTW) basis (compared with 2008
levels).
1
This is
the fourth
year of
disclosure under
the Poseidon
Principles and
the first-time
reporting in
the name
of UBS
AG.
The result
is based
on the
Credit Suisse
AG ship
finance portfolio
as at
the end
of 2023
and, therefore
,
precedes the
completion of the legal
merger of the
two firms. The reported
alignment deltas are reflective
of the IMO’s revised
GHG
reduction ambition, with the underlying methodology adopted by the Poseidon Principles in 2023, as further updated in
the reporting year.
2
Poseidon Principles disclosure (UBS AG – Credit Suisse AG portfolio)
For the year ended
31.12.23
31.12.22
Shipping (delta alignment to “IMO 2023 minimum trajectory”)
9.1%
11.5%
Shipping (delta alignment to “IMO 2023 striving for trajectory”)
14.4%
15.7%
1
The IMO Revised GHG Strategy sets out
the following absolute reduction levels of ambition: (i) to
reduce total annual GHG emissions by at least
20%, striving for 30%, by 2030 (compared with 2008);
(ii) to reduce
total annual GHG emissions by at least 70%,
striving for 80%, by 2040 (compared
with 2008); (iii) GHG emissions to peak
as soon as possible and to reach
net-zero GHG emissions by or around 2050
(the Poseidon
Principles trajectories are
based on a
net zero by
2050 consideration);
and (iv) carbon
intensity to decrease
in order to
reduce CO
2
emissions per transport
unit by at
least 40% by
2030 (compared with
2008). The
Revised GHG Strategy considers
well-to-wake CO
2
e emissions, i.e.
it includes upstream emissions,
as well as accounts
for the impact of
methane (CH
4
) and nitrous oxide
(N
2
O). The updated
IMO trajectories are
not
1.5°C-aligned.
2
The Poseidon
Principles Annual Disclosure
Reports are published
under https://www.poseidonprinciples.org/finance/resources
.
For the 2024
reporting cycle (based
on 2023 data),
the Poseidon Principles
Technical
Guidance v.5.1 was used.
Sustainability Report 2024
| Environment
38
In 2024, we experienced a strong reporting level and responsiveness from our clients,
with further improvements in data
quality.
This
is
a
testament
to
the
established
Poseidon
Principles
and
regulatory
frameworks,
such
as
the
IMO
Data
Collection System (DCS) and IMO Carbon Intensity Index
(CII) rating systems.
The
results
continue
to
be
materially
driven
by,
and
may
fluctuate
each
reporting
year
due
to,
the
continuous
implementation and
tightening of
regulations, a
broader adoption
of technical
improvement measures
and the
limited
direct influence over operational aspects by ship owners
and reporting financial institutions. In the long term, we
expect
that
technology-related
aspects
of
decarbonization,
such
as
the
adoption
and
availability
of
new
low-emission
technologies and related fuel supply, could further drive the
portfolio alignment performance.
The Poseidon Principles continue to be
a relevant factor in our ship finance
client and transaction due diligence.
Related
processes and tools have been further refined and embedded
in our organization.
By understanding
our clients’
decarbonization
strategies
better,
we continue
to work
alongside them
to support
their
climate
transition
efforts.
The
improvement
of
data
availability
and
transparency
and
our
continuous
participation
in
decarbonization initiatives, including the Poseidon Principles, support
our client discussions and portfolio optimization.
Our approach to measuring facilitated emissions from our capital
markets business
Our role in capital market transactions helps our clients to access capital for their
businesses. We facilitate capital-raising
by clients, and we believe it is important
to monitor the related emissions from
these transactions. The Investment
Bank
offers clients access to the primary and secondary
public capital markets and private capital transactions.
Facilitated
emissions
differ
from
financed
emissions
in
two
respects:
firstly,
they
are
off-balance
sheet
(representing
services rather
than financing)
and, secondly,
our role
is completed
within a
short time
frame rather
than a
long-term
loan-related
exposure.
As
a
result,
and
in
line
with
industry
guidance,
we
distinguish
between
on-balance
sheet
“financed” and off-balance sheet “facilitated” emissions.
By disclosing
our facilitated
emissions for
selected
carbon-intensive
sectors for
public capital
markets
transactions, we
aim to provide
transparency regarding the emissions
we facilitate as
a result of
our capital market
activities. Our facilitated
emissions
are
calculated
following
the
PCAF’s
Global
GHG
Accounting
and
Reporting
Standard
–
Part
B
Facilitated
Emissions (first version, December 2023) for facilitated emissions, including public equity capital markets and public debt
capital
markets,
where
we
held
a
lead
bookrunner
or
lead
manager
/
co-manager
role
in
the
transaction.
Facilitated
emissions are not shown for the 2024 reporting year, due
to the inherent time lag in the availability of emissions data.
It is important to note that
these facilitated emissions are dependent
on the capital markets activity
during the year and
our market share is expected to fluctuate in our year-on-year
reporting.
We continue to
review and assess
emerging industry guidance and
target-setting methodologies for facilitated emissions.
We review and assess Global Banking transactions and employ a robust business selection process for mandates that are
accepted. This means that, in
our capital markets activities for carbon-intensive sectors,
we consider the potential climate
and sustainability
impacts of
the transaction
and related
material risks
and opportunities,
in line
with our
sustainability
and climate risk policy framework.
Facilitated emissions for selected carbon-intensive sectors (UBS Group)
For the year ended
31.12.23
31.12.22
Facilitated
amount
(USD bn)
Facilitated
emissions,
scopes 1
and 2
(million
metric t
CO
2
e)
Facilitated
emissions,
scope 3
(million
metric t
CO
2
e)
PCAF
score,
scopes 1
and 2
2
PCAF
score,
scope 3
2
Facilitated
intensity
(million
metric t
CO
2
e / USD
bn)
Facilitated
amount
(USD bn)
Facilitated
emissions,
scopes 1
and 2
(million
metric t
CO
2
e)
Facilitated
emissions,
scope 3
(million
metric t
CO
2
e)
PCAF
score,
scopes 1
and 2
2
PCAF
score,
scope 3
2
Facilitated
intensity
(million
metric t
CO
2
e / USD
bn)
Selected carbon-intensive
sectors
1
6.5
1.3
1.8
1.6
1.7
0.46
12.0
2.0
2.3
1.6
2.3
0.35
4
Selected carbon-intensive
sectors as % of total
5.3%
5.7%
Other sectors
117.7
197.7
Total facilitated amount
3
124.2
209.7
1
Selected carbon-intensive sectors are the following: fossil
fuels (coal, oil and gas), power generation,
iron and steel, aluminum, cement, automotive and
air transportation. Agriculture and real estate
are excluded
due to the limited
data availability. Refer to the sector
approach in the “Climate-related
methodologies – decarbonization approach
for our financing activities“ section
of the Supplement to
the UBS Group Sustainability
Report 2024, available at ubs.com/sustainability-reporting, for more information about the parts of the value chain within scope.
2
The PCAF data quality score has been combined for the key sectors and weighted
by the facilitated amount.
3
Includes all sectors.
4
Facilitated intensity is reported to two decimal places and may therefore differ from the values presented in the UBS Group Sustainability
Report 2023.
›
Refer to the “Supporting Opportunities”
section of this report for more information about the
Investment Bank’s capital market
activities
›
Refer to the “Basis of preparation” section of the
Supplement to the UBS Group Sustainability Report
2024, available at
ubs.com/sustainability-reporting
, for more information about our methodology to calculate
facilitated emissions
Sustainability Report 2024
| Environment
39
Supporting our clients’ neutralization of residual emissions
Our
climate
transition
plan
prioritizes
emission
reductions
in
line
with
science-based
climate
targets
and
credible
trajectories to achieve
these targets. In addition,
we anticipate that
the deployment of carbon
removal solutions
will be
needed
to
supplement
the
emission
reduction
strategies
of
some
of
our
clients
and
counterbalance
hard-to-abate
emissions.
We
aim
to
support
our
clients
in
the
deployment
of
solutions
to
neutralize
residual
emissions
in
line
with
science-based
decarbonization
pathways.
As
best
practice
guidance,
regulation,
methodologies
and
technologies
develop, our approach to decarbonization, including
neutralization, will continue to evolve.
High-integrity
participation
in
carbon
markets
plays
a
role
that
is
supplemental
to
sectoral
and
economy-wide
decarbonization.
We
have
made
a
strategic
investment
in
Carbonplace,
a
consortium-led
venture
to
build
an
infrastructure layer to scale the global voluntary
carbon market. Through its embedded
network of banks, registries and
data
providers,
Carbonplace
enables
our
clients
and
other
market
participants
to
buy,
sell,
hold
and
retire
voluntary
carbon credits on a
transparent, secure and
scalable settlement platform.
Furthermore, the Investment
Bank completed
a first-of-a-kind carbon finance transaction that aims to
provide returns to investors from the sale of
credits generated by
carbon dioxide removal
projects, enabling our
clients to directly
invest in the development
of high-quality technological
carbon
removals.
We
support
transparent
investment
in
carbon
markets
that
are
aligned
with
the
current
publicly
available consensus on high integrity
standards and robust governance (including
the Voluntary Carbon Markets Integrity
Initiative Claims Code of Practice, the Integrity Council
for the Voluntary Carbon Market Core Carbon
Principles and the
Oxford Principles for Net-Zero-Aligned Carbon Offsetting).
Supporting our investing clients’ low-carbon transition
We are committed to supporting our investing clients in the transition to a low-carbon world in line with our obligations
to our clients, including
fiduciary duties as an
investment manager and on the
terms of the mandates agreed
with clients.
We offer a distinct approach to client investments,
which focuses on solutions and engagement
activities that empower
clients to
achieve
their transition
goals. We
have identified
six key
strategic actions
to support
our investing
clients in
Asset
Management
and
Global
Wealth
Management.
It
is
important
to
note
that
not
all
these
strategic
actions
are
relevant to
both business
divisions,
or to
all regions
within a
division, and
our progress,
where applicable,
may not
be
linear or simultaneous.
–
Develop our platform
of available climate
-related strategies, products
and solutions to
facilitate our investing
clients’
transition to a low-carbon world.
–
Engage investee companies to encourage them to adopt credible climate transition plans and manage climate-related
risks and opportunities (applicable to Asset Management only).
–
Collaborate
with
third-party
fund
managers
to
understand
their
climate
transition
plans
and
approach
to
consider
climate-related risks
and opportunities
(applicable to
Global Wealth
Management only),
where the
legal framework
allows.
–
Support clients’
progress on
their climate
objectives through
education sessions
and thought
leadership, along
with
portfolio construction
and transparency,
aiming to
assist clients
who seek
awareness of
mitigating climate
risks and
identifying transition opportunities in their investments.
–
Provide employees with the training, tools
and information necessary to support
our clients to navigate the transition
to a low-carbon world in accordance with their climate
objectives.
–
Engage with policymakers on key topics such as regulations
and policy development.
Details by business division on each strategic action are provided
in the respective sections below.
›
Refer to the “Supporting our climate approach: key
enabling actions” section in this report for more information
about our Group
initiatives
Asset Management
Asset Management is committed to supporting our clients in
achieving their climate-related investment goals. In the UBS
Group Sustainability Report 2023, we referred to the target set by Asset Management aiming, by 2030, to align 20% of
UBS AG
Asset Management’s
total assets
under management
(AuM) with
net zero.
Given the
integration taking
place
within Asset
Management, we
are review
ing the
legacy target
set prior
to the
acquisition of
the Credit
Suisse Group
,
taking into
account all
of the
AuM of
the combined
businesses. We
have therefore
withdrawn the
target. We
remain
committed to supporting the Paris Agreement climate goals
in line with global efforts. At the end of 2024, we recorded
USD 64.4bn of total assets as having a net-zero
ambition, compared with USD 35.5bn at the
end of 2023.
Aligned
to
our
overall
approach
for
supporting
our
investing
clients,
Asset
Management
has
adopted
key
policies,
guidelines and frameworks,
along with actions
to manage
our climate-related
impacts and realize
opportunities. These
policies and actions are outlined below.
Our climate-related policies, guidelines and frameworks
Specific policies, guidelines and frameworks
are in place and aim
to manage climate-related
impacts and the realization
of opportunities within Asset Management.
The
climate
risk
integration
guidelines
describe
the
approach
toward
integrating
the
physical
and
transition
risks
of
climate change into the
assessment of public market issuers
and investment portfolios. The
guidelines identify companies
with elevated climate
risks and set
steps for
assessment of the
specific risks
and mitigation actions,
which are incorporated
into investment decision-making. The scope of the framework covers listed equity and corporate bonds. The most senior
level accountable for the implementation of the guidelines
is the head of the Sustainable Investing team.
Sustainability Report 2024
| Environment
40
The net-zero alignment framework has been
established to guide the internal classification
and development of products
and
solutions
meeting
clients’
needs
for
net-zero
investing.
The
framework
describes
a
range
of
methodologies
for
determining the net-zero
ambition of investment
products and covers
investments in public
equities and corporate
bonds,
sovereign bonds, direct
real estate, direct
infrastructure, carbon markets
and private debt.
In 2024, the
framework was
reviewed and
updated to
reflect further
developments of
industry guidance.
The most
senior level
accountable for
the
implementation of the guidelines is the head of the Sustainable
Investing team.
›
Refer to “Key policies and principles” in the “Appendix
1 – Governance”
section of this report for details about the Group-wide
policies, guidelines and frameworks
Climate-related investing metrics
The table
below provides
metrics related
to the
investments of
our Asset
Management division.
Investment-associated
emissions are
provided based
on the
recommendations
of the
Task
Force on
Climate-related
Financial Disclosure
s
(the
TCFD) and
are derived
from the
GHG emissions
(scopes 1
and 2)
attributed to
the issuers
and the
positions within
the
investment portfolios we
manage. The metrics
are calculated for portfolios
where emissions data is
available and primarily
covers
our
equity,
fixed
income
and
multi-asset
portfolios,
accounting
for
48%
of
the
total
invested
assets
of
Asset
Management.
The design of the table has
been changed from the one
used for the UBS Group Sustainability
Report 2023 with a view
to simplifying
the presentation
of the
metrics. It
now includes
three commonly
used metrics
for investment-associated
emissions for
Asset
Management.
Furthermore,
it provides
carbon
intensity
metrics
for
equity and
fixed
income
asset
classes.
Absolute
carbon
emissions
increased
year
on
year
primarily
due
to
inclusion
of
Credit
Suisse
portfolios
and
greater
coverage for
fixed income portfolios.
Carbon intensity
for Asset
Management decreased
as a
result of an
overall fall in
carbon intensity
across the
equities asset
class driven
by increased
equity market
valuations, partially
offset by
a rise
in
the carbon intensity of fixed income.
Climate-related investing metrics – portfolio emissions (Asset Management)
For the year ended
31.12.24
31.12.23
Asset Management Investment-associated carbon emissions:
Carbon emissions (absolute in million metric tons of CO
2
e)
1,2
54.8
41.3
Carbon intensity (in metric tons of CO
2
e per USD m invested)
1
56.5
62
Carbon intensity (in metric tons of CO
2
e per USD m of revenue)
1
101.2
103.6
Equities Asset Class
Carbon intensity (in metric tons of CO
2
e per USD m invested)
1
38.5
45.6
Carbon intensity (in metric tons of CO
2
e per USD m revenue)
1
90.4
101.5
Fixed income Asset Class
Carbon intensity (in metric tons of CO
2
e per USD m invested)
1
108.3
84.2
Carbon intensity (in metric tons of CO
2
e per USD m revenue)
1
130.9
122.5
1
Based on data for scope
1 and 2 GHG
emission of investee companies
from a third-party
data provider and positions
held in investment portfolios.
Note the scope of
the portfolio emissions metrics
reported for
2024 is Asset Management,
and includes Credit Suisse
portfolios which have migrated
onto UBS platforms by
the end of the
year. This
process is carried
out in waves and
will continue until
the end of 2025
at a
minimum. The scope of the metrics reported for 2023 is UBS AG Asset
Management only and excludes Credit Suisse portfolios.
2
2023 absolute carbon emissions have been restated from 46.3
to 41.3 million metric
tons of CO
2
e.
Our key climate-related actions
Asset Management aims
to manage its
climate-related impacts
and realize
opportunities through
the actions described
below.
These
actions
are
only partially
and indirectly
connected
to the
investment-associated
emissions
we report
for
Asset Management and for the selected asset classes.
Action 1: Develop our platform of available climate-related
strategies, products and solutions
Asset Management integrates considerations of climate change risks across a range of the products and solutions that it
offers. From the viewpoint that climate change represents a financial risk across
a broad range of investments, it assesses
the potential scale of
risks arising from transition and the
risks associated with the effects of
climate change on operating
assets
and
supply
chains.
In
2024,
Asset
Management
added
further
specific
climate-related
risk
indicators
into
its
proprietary ESG risk
dashboard, generating
a risk signal
across several risk
dimensions, including transition
and physical
risks. This makes
it easier to
identify investments where
the risks are
higher,
assess how these
risks are
being managed
and provide a forward-looking view that
informs portfolio manager investment decisions.
Across our
private markets business,
there is
a climate risk
management process to
identify, assess
and potentially mitigate
climate risks to
improve the
adaptation and /
or resiliency
of our portfolios
to climate-change-related
hazardous events
and the
transition to
a net-zero
world. This
approach is
embedded throughout
the investment
life cycle
for underlying
assets of portfolios, where relevant and possible. Assessment of transition risk using the IEA net-zero roadmap is applied
to direct infrastructure investments. Standardized
due diligence questionnaires are used
in our multi-manager investment
businesses
(real
estate,
private
equity
and
infrastructure)
to
understand
climate
risks
at
fund
and
asset
levels,
where
possible.
In
addition,
our
Multi-Managers
Real
Estate
business
independently
assesses
physical
risk
and
transition
risk
using the S&P Trucost and CRREM decarbonization pathways,
respectively.
In addition,
Asset Management offers
specific products
that address
different aspects of
climate change.
Examples include
strategies that invest in climate solutions, the energy transition, infrastructure debt and green real estate, and in indexed
strategies.
Sustainability Report 2024
| Environment
41
In 2024,
we expanded
the number
of portfolios
that we
offer with
a net-zero
alignment ambition
in the
equities and
direct real estate asset classes.
The table below shows progress related to total assets with
a net-zero ambition.
The increase in the value of assets with net-zero
ambition was driven by an increase in the number
of net-zero ambition
portfolios
and
market
performance.
The
classification
of
additional
net-zero
ambition
portfolios
resulted
from
newly
launched
portfolios,
changes
to
existing
portfolios
and
a
refinement
to
the
Asset
Management’s
net-zero
alignment
framework to align with current industry standards and best
market practice.
Climate-related investing metrics: Opportunities – net-zero investing (Asset Management)
For the year ended
31.12.24
31.12.23
Assets with net-zero ambition (USD bn)
1
64.4
35.5
Number of net-zero ambition portfolios
1
49
35
Net-zero ambition assets share of total assets under management
(%)
2
3.6
2.9
1
Credit Suisse portfolios are in the process of being assessed in the context of the Asset Management's net-zero alignment framework to identify portfolios with a net-zero ambition and are therefore not reflected in
the reported metrics.
2
For 2024, the
total assets under management
represent Asset Management
including Credit Suisse.
For 2023,
the total assets under
management represent UBS
AG Asset Management
excluding Credit Suisse.
›
Refer to the “Supporting Opportunities” section
of this report for more information about examples
of climate and / or transition
products
Action 2: Engage investee companies
Asset Management has had
a dedicated climate engagement
program focused on investee
companies in place for over
six years. This program is based on selecting companies that make
a significant contribution to portfolio emissions across
listed
equity
and
corporate
fixed
income
investment
portfolios.
This
engagement
is
based
on
a
set
of
expectations
published on
our website
from whic
h
company specific
engagement objectives
are
developed, supplemented
with an
evidenced-based research
framework,
along with sector-specific
standards addressing
governance, corporate
transition
plans and exposure to sector-specific
decarbonization levers across business operations
and the value chain.
In
its
private
markets
business,
Asset
Management’s
active
ownership
on
climate
change
is
integrated
into
the
management
of
its
funds
and
is
implemented
by
all
operational
functions
throughout
the
ownership
cycle
of
an
underlying
project.
This
spans
from
development
or
acquisition
to
the
ongoing
asset
management,
renovation
and
maintenance, through to sale.
Action 3: Support clients’ progress on their climate
objectives
Asset
Management
recognizes
that
its
approach
to
climate
change
investment
is
determined
by
clients’
choices.
Therefore,
we aim
to play
a role
in helping
our clients
to achieve
their climate
objectives, working
collaboratively with
them on
climate risk
management by
providing information
about best
practices and
approaches for
portfolios with
a
net-zero ambition. This includes
supporting climate-oriented portfolio construction
through internal transition readiness
assessment methodologies, transparency on climate
-relevant data metrics and thought leadership.
In 2024,
Asset Management
supported clients
in a
variety of
ways reflecting
the specific
needs of
the clients
involved.
We created
thought pieces
and guidance
for clients
on climate
change aspects
of investing.
We supported
a client
in
meeting the
need for
decarbonizing the
sovereign part
of a
portfolio. We
also assisted
a retail
bank with
developing a
net-zero multi-asset
offering for its
client, along
with methodology
and building
blocks for a
fund-of-funds solution.
A
further example is
our development of a
net-zero ambition corporate bond
fund for Swiss institutional
clients.
As a result,
we have increased the shelf of products that we offer to
clients with a climate-related perspective.
During the
year, Asset
Management published
a Climate
Aware report
showing decarbonization
path visualizations.
It
also published a
series of insights
on approaches to
COP29, physical risks,
battery power and
natural capital, as
well as
an engagement for impact report,
an IPE special report
and a climate report
that provided an overview of
its commitment
and actions to the energy transition.
Action 4: Provide employees with training, tools and information
Asset Management provides relevant
training, tools and information to its employees
to support clients in the transition
to a
low-carbon world.
With the
aim of
enabling the
alignment of
the activities
of Asset
Management’s employee
s
to
the
division’s
sustainable
investing
goals,
Asset
Management
delivered
an
ESG
talk
series
and
updated
Group
foundational
sustainable
investing
training
aimed
at
an
Asset
Management
audience.
It
enhanced
role-specific
sustainable
investing
know-how
by
running
the
first
Berkeley
UBS
external
certification
program.
It
also
conducted
regulatory
learning sessions
educating investment
professionals
on sustainable
investing regulatory
and greenwashing
risks.
›
Refer to the “Supporting our climate approach: key
enabling actions” section of this report for
more information about our
Group-wide training and culture activities
Sustainability Report 2024
| Environment
42
Action 5: Engage with policymakers
Asset Management undertakes engagement with the industry and government with the aim of providing input to policy
and regulation in the development of well-functioning
markets.
With respect
to climate
change, Asset
Management engages
with key
stakeholders such
as national
and international
policymakers through
industry forums,
including the
European Fund
and Asset
Management Association
Stewardship,
Market
Integrity
and
ESG
Investment
Standing.
In
Switzerland,
Asset
Management
is a
member
of
Swiss
Sustainable
Finance and the Asset
Management Association Switzerland
Working Groups on Sustainable
Finance, including a focus
on developing the Swiss Climate Scores methodologies and
the Swiss Stewardship Code.
›
Refer to the “Supporting our climate approach: key
enabling actions” section of this report for
more information about the
Group’s initiatives on industry, governments and public sector engagement
Global Wealth Management
Global Wealth Management is a distributor of investment solutions, including those that focus on
climate. We recognize
that
some
investors
may
have
decarbonization
ambitions
or an
interest
in
investing
in
the
transition
to
a
low-carbon
world, therefore
we
aim to
provide
a
range
of solutions
for
private
investors
and
family
offices
to address
their
own
decarbonization targets
where possible.
We may
seek to
do this through
allocations to
climate-related
solutions in our
discretionary mandates where relevant
and available, and by curating climate investment options for advisory portfolios.
The focus on
providing a
range of credible
solutions is complemented
by building investor
awareness, driving
solutions
innovation across
asset classes
and strategies, and
providing investors
with the tools
to understand their
portfolios in a
climate
context.
However,
the
available
solutions,
approaches
and
climate-related
data
and information
will
differ
by
region.
Our key climate-related actions
Action 1: Develop our platform of available climate-related
strategies, products and solutions
Global Wealth
Management
aims to
support climate
change mitigation
by providing
options for
private investors
and
family
offices
to
address
their
own
decarbonization
objectives
where
possible.
In
2024,
Global
Wealth
Management
continued
to
increase
the
number
of
investment
solutions
across
asset
classes
and
strategies
to
support
clients’
decarbonization objectives.
›
Refer to the “Supporting opportunities” section
of this report for more information about our products and
solutions
Action
2
: Support clients’ progress on their climate objectives
We aim
to support
our clients
in making
progress
on their
climate objectives
through
education, investment
research,
and portfolio
construction and transparency. Our investment specialists
provide investment insights
to clients and
advisors
on various climate-related and
transition-investing topics, given the
importance of climate change
for capital markets
and
business
models.
This
includes
incorporating
climate
considerations
into
portfolios,
setting
portfolio
decarbonization
targets and building exposure to carbon markets.
In 2024, we continued to provide coverage
of climate-related and broader sustainable investing topics in publications for
private clients.
Our Chief
Investment Office identified
three key sustainability
themes for the
year that encompass
different
areas
of
the
transition
to
the
low-carbon
world:
the
industrial
transition,
sustainable
infrastructure,
and
water
and
agriculture.
Throughout
the
year,
we
provided
a
private
investor
perspective
on
investment
opportunities
tied
to
the
transition. Our
analysts covered
a broad
range of
topics, including,
but not
limited to,
longer-term investment
themes
(e.g. energy efficiency, the energy transition(s), smart mobility,
the circular economy, and the blue economy), investments
in
renewable
energy
infrastructure,
decarbonization
of
high-climate-impact
sectors
(e.g.
cement,
steel
and
shipping),
climate risks and opportunities tied to artificial intelligence,
implications for the transition from global election outcomes.
We activated
this content internally
and externally
through a
variety of
channels, including video
content, social
media
campaigns and podcasts in collaboration with industry partners,
as well as through our website.
We also
continue to
see a
greater focus
on climate
transparency in
select regions.
Since the
introduction of
the Swiss
Climate
Scores
in
2023,
we
have
continued
to
inform
advisors
on
this
content
and
made
reports
published
by
Asset
Management and third-party
managers available through
our platform. We
also incorporated key
environmental statistics
into the after-sales materials for relevant investment modules we
offer to our clients.
Action 3: Collaborate with third-party fund managers
We work closely with third-party
fund managers on developing new sustainability and
climate solutions, where
relevant
and as legal frameworks
allow for it. We
aim to identify
relevant and compelling
investment opportunities and
credible
tools and to support the launch of new solutions where such are possible and relevant for client portfolios. For example,
in
2024,
we
co-designed
and
launched
an
energy
transition
infrastructure
fund
for
clients
interested
in
investing
in
transition-related real assets.
We also
host regular “innovation
sessions” with
managers on
our platform
to discuss
market
trends, development ideas and new strategies. These
sessions include a focus on sustainability and transition.
We
continue
to
believe
that
the
transition
to
a
low-carbon
world
requires
an
“all-of-the-above”
approach,
where
investments
in
clean
energy
infrastructure
and
green
technologies
are
complemented
by
effective
and
credible
shareholder and
bondholder engagement
with heavy
polluters on
decarbonization.
As such,
we dedicate
a portion
of
our
discretionary
portfolios
to
impactful
engagement
strategies,
including
those
that
invest
in
companies
with
the
objective of engaging on decarbonization
,
and regularly collaborate with
these managers on their impact
measurement
and reporting capabilities.
Sustainability Report 2024
| Environment
43
Action 4: Provide employees with training, tools and information
In growing our employees’ capabilities
around climate and the transition, we
aim to provide them with
the training, tools
and information
necessary
to support
our clients
in navigating
the transition
to a
low-carbon world.
In Global
Wealth
Management, we
continued the
rollout of
an education
curriculum covering sustainability
and sustainable investing
topics
in certain
regions.
This curriculum
offered
to advisors
covered
climate-relevant
topics and
considerations
for investing
around the transition.
›
Refer to the “Supporting our climate approach: key
enabling actions” section of this report for
more information about our
Group-wide training and culture activities
Sustainability Report 2024
| Environment
44
Reducing our own environmental impact
Reporting to
the Head
Group Human
Resources and
Corporate Services,
Group Real
Estate and
Supply Chain
(GRESC)
has overall responsibility
for managing environmental
and climate-related impacts
arising from our own
operations and
supply chain. GRESC partners
with Group Operations and
Technology Office (GOTO),
who manages technology-related
environmental
impacts,
from
hardware
and
data
centers.
GRESC
ensures
that
implementation,
monitoring
and
improvement efforts comply with local
legislation and adhere to
the international environmental management
standard
ISO 14001 globally and the international energy management standard ISO 50001 in the EMEA
region. GOTO drives the
optimization of
our technology within
our data centers
and the cloud,
ensuring optimal
efficiency measures
across our
energy-intensive
assets
while
encouraging
development
practices
that
consider
efficiency
and
reduce
our
overall
environmental impact
.
To mitigate
our climate-related
impacts, we
have defined
a scope
1 and
2 emission
s
reduction
target and actions to guide our transition toward net zero.
Our scope 1 and 2 net-zero target
We have replaced our original 2025 scope 1 and
2 target as disclosed in the UBS Group
Sustainability Report 2023 with
a new
scope 1
and 2
net-zero
target
to be
achieved by
2035 that
is in
line with
net-zero
guidelines. The
new
target
reflects our
enlarged corporate
real estate
portfolio following
the acquisition
of the
Credit Suisse
Group and
considers
the latest definition of a “net-zero target”
in the Commission Delegated Regulation (EU)
2023/2772 (CSRD).
1
We aim to,
at a minimum,
reduce our emissions by
90% against our
2023 baseline of
46,278 metric tons
of CO
2
e before neutralizing
any residual emissions through the purchase of carbon removal
credits.
This target
covers our
scope 1
and market-based
scope 2
emissions across
all our
global own
operations. As
part of
the pathway
toward 2035, we
also defined a
2030 interim target
to reduce our
scope 1 and
net scope 2
emissions by 57%
against our
2023 baseline. This interim target does not
include the use of any
carbon removal credits.
›
Refer to the “Reducing our environmental footprint
– additional information” section of the Supplement
to the UBS Group
Sustainability Report 2024, available at
ubs.com/sustainability-reporting
, for details about our scope 1 and 2
emissions
1
Definition of a net-zero target by the CSRD: Setting a net-zero
target at the level of an undertaking aligned with meeting societal climate goals means:
(i) achieving a scale of value chain emission reductions consistent
with the abatement required to reach global net zero in
1.5°C pathways; and (ii) neutralizing the impact of any residual emissions (after
approximately 90–95% of GHG emission reduction with the possibility of justified
sectoral variations in line with a recognized sectoral pathway) by permanently removing an equivalent
volume of CO
2
.
Sustainability Report 2024
| Environment
45
When developing the new scope 1
and 2 target, we reviewed sectoral net-zero pathways
(e.g. real estate)
but concluded
that there was no sectoral pathway that reflected the
structure of our operations.
We have followed the latest guidance
from
the
SBTi
and
use
its
Absolute
Contraction
Approach
1
,
limiting
global
warming
to
1.5°C.
Demonstrating
our
commitment to climate action, we have set
a more ambitious target, aiming to
achieve net zero by 2035, well
ahead of
2050 – the deadline under the SBTi Absolute Contraction
Approach.
For our own operations and
the scope of our scope
1 and net scope 2 emission
reduction targets, business growth
and
technological advancement may lead to
changes
in workforce numbers,
impacting real estate-
and service-related needs.
The continued advancement
of low-emission technologies for
space heating and
countries’ net-zero targets will
positively
impact the target achievability. We recognize
that the impact of such developments is
difficult to quantify and therefore
needs
to be closely monitored. Projections
of real estate demand changes will be
factored into the annual model
review
to ensure early course correction if required. Another
development that will impact target achievement
is the availability
of
renewable
electricity
in
line
with
RE100
requirements
as
global
demand
increases
with
production
not
necessarily
following at the same pace.
In 2024, our scope 1 and net
scope 2 emissions reduced by 35%
against our baseline. This reduction
was mainly driven
by the consolidation of our real estate footprint and our increased
coverage of renewable electricity.
Accompanying our scope
1 and 2 net-zero
target, we also aim
to reduce by
2030 our absolute
energy consumption by
35% compared with
our 2023 baseline.
The ambition level
of this energy
reduction target was
set through forecasting
the
expected
energy
usage
reductions
resulting
from
the
implementation
of
the
decarbonization
levers
and
actions
described
below.
In
2024,
we
achieved
a
10%
reduction
in
energy
use
compared
with
our
baseline,
driven
by
the
consolidation and energy optimization
of our real estate
and data centers.
Our energy reduction target
also contributes
to mitigating the risk of not being able to secure full coverage
of renewable electricity.
We have also set a target of sourcing 100% renewable electricity from qualifying generation by 2026 in line with RE100
technical guidance, in markets where credible renewable electricity generation and tracking systems exist. This will cover
our corporate
real estate
portfolio, including
data centers.
In 2024,
99.8% of
the electricity
we used
across our
global
real
estate
portfolio
was
from
renewable
sources,
with
30%
of
bundled
electricity
and
70%
of
unbundled
electricity
coming from such sources. Out of our total gross scope
2 emissions, 91%
is covered by contractual instruments.
We
have
set
2023
as
our
baseline
year
for
our
scope
1
and
2
net-zero
target
and
our
energy
reduction
target.
The
updated
baseline
reflects
material
changes
for
the
combined
firm
and
an
adjusted
scope
of
our
renewable-source
electricity commitment to
address markets with
limited procurement availability
of electricity from renewable
sources in
line with RE100. All three targets
are led and managed by GRESC in
collaboration with GOTO. We have actively engaged
relevant stakeholders in the development of
these targets by collecting strategic assessments from
topic experts, regional
representatives and real estate managers.
We aim, at a
minimum, to review our
targets every five years and,
from 2030 onward, to
update the base year
and target
values after
every
five-year
period to
ensure
consistency
with the
most
recent climate
science and
best
practices.
It is
important to
note that
progress toward
our targets
may not
be linear,
with year-on-year
volatility expected
due to
the
nature of operational requirements and business development.
1
As per the SBTi Corporate Net-Zero Standard Criteria v1.2, March 2024.
Sustainability Report 2024
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46
As part of our global emission accounting
to model our 2035 reduction target,
we have also assessed the prevalence
of
locked-in emissions within the scope of our
target. We own and control some buildings
with significant on-site fossil fuel
use (such as those heated
with natural gas or
oil) and are aiming
to either replace such
systems or move out
of the real
estate,
wherever
possible. For
some locations,
we
are
also dependent
on
municipal
action to
develop
or decarbonize
district heating systems, as electrification with the current infrastructure
or location is not a viable alternative.
Decarbonization levers and key actions underpinning
our own operations targets
To achieve our targets related to
our own operations as outlined above
and to manage our climate-related impacts in
our
own operations,
we have
identified
key decarbonization
levers and
actions required
in our
real estate
operations and
service portfolio. The decarbonization levers are aggregated types of
mitigation actions. Therefore, actions are structured
by decarbonization lever.
Lever 1: Phase
out fossil fuels and switch to greener alternatives (scope 1)
We
have
established
a
four-part
action
plan
to
phase
out
fossil
fuels
and
implement
greener
alternatives
in
order
to
significantly reduce our associated scope
1 emissions. By deploying
a series of targeted
actions, we can transition
to more
sustainable practices and energy sources, ensuring
a cleaner and more resilient future
for our own operations.
Action 1: Phase out fossil-fuel-powered own vehicles
Across
all
regions,
we
plan
to
phase
out
our
fossil-fuel-powered
own
vehicles
by
2035.
In
markets
where
this
is not
feasible,
we
will pursue
the
best
available
industry
options,
such as
hybrid
vehicles,
while continuing
to seek
greener
alternatives.
This
will
help
us
ensure
compliance
with
emission
standards
and
optimized
operational
efficiency
while
minimizing our carbon footprint.
Action 2: Switch to more sustainable fuel alternatives and battery
replacements
In
2024,
we
developed
high-level
plans,
which
extend
through
2035,
to
reduce
and
replace
fossil
fuels
in
critical
engineering
power
systems.
We
will
seek
to
replace
those
fuels
with
more
sustainable
alternatives,
such
as
biofuels,
hydrogenated vegetable oils and battery replacements.
We initiated a cross-regional market
analysis of fuel alternatives
in 2024, to be
completed by 2025, to ensure
appropriate
replacements can be procured accordingly to meet our 2035 scope 1 and 2 net-zero
target. The outcome of this market
analysis will inform our further detailed planning.
Action 3: Eliminate usage of heating oils and natural gas
We aim to eliminate oil- and natural-gas-based heating systems within our own operations
by 2035, in line with industry
decarbonization
efforts.
We
plan
to
achieve
this
by
identifying
and
targeting
real
estate
assets
for
electrification
and
switching to district heating to maximize the operational
and cost efficiency of each asset’s life cycle.
Action 4: Transition to low-GWP refrigerants
We have initiated the replacement of refrigerants with alternatives with lower global warming
potential factors. We plan
to complete this action across all regions by
2035.
Lever 2: Reduce our operational emissions (scope 2)
In parallel
with
reducing
our
scope 1
emissions,
we
are
also focusing
on reducing
our operational
emissions
through
strategic enhancements to our
corporate real estate portfolio. By
implementing three key actions, we
plan to create more
energy-efficient workspaces and real estate.
Action 1: Consolidate
and optimize
our corporate real estate portfolio
In
collaboration
with
the
individual
business
divisions,
we
will
prioritize
the
selective
exits
from,
and
downsizing
of,
underutilized spaces
in our real
estate globally
through 2035
and beyond.
We also
plan to optimize
our corporate
real
estate
portfolio’s
energy
usage
either
via
retrofitting
(Action
2)
or,
in
some
cases,
by
relocating
to
more
sustainable
buildings. During
2024, we
achieved a
52% reduction
of our
scope 2
market-based emissions
across the
consolidated
portfolio against our 2023 baseline.
We are
reducing energy
consumption
in our
own data
centers as
a result
of migrating
to third-party
co-location data
centers and cloud providers where the power usage effectiveness
ratio is substantially more efficient.
Action 2: Upgrade
and retrofit our corporate real estate portfolio
To
effectively address our real estate
energy footprint, we intend to upgrade and retrofit our real
estate portfolio and fit
out in
line with
internationally recognized
building standards
,
such as
Leadership in
Energy and
Environmental Design
(LEED)
by
the
USGBC.
We
expect
to
improve
and
extend
the
existing
energy
management
system
within
the
EMEA
region, with greater implementation
of ISO 50001 to drive energy efficiency within
our own operations.
In 2024,
we achieved
multiple green
building certifications
across our
offices globally
as part
of our
transition toward
more
sustainable
real
estate.
In
Switzerland,
we
are
renovating
the
Paradeplatz
6
building
in
Zurich,
with
the
aim
of
achieving LEED Platinum certification for
the building by 2027.
In Monaco, the refurbishment of
our Villa Belgica building
achieved
the
Building
Research
Establishment
Environmental
Assessment
Method
(BREEAM)
Excellent
rating.
In
West
Kowloon, Hong
Kong, our
newest flagship
office is
on track
to be
completed by
- We
are aiming
for it
to be
the
most sustainable office built for our Asia Pacific operations.
Sustainability Report 2024
| Environment
47
UBS locations
LEED Platinum
LEED Gold
LEED Silver
LEED certified
Switzerland
1
1
EMEA
5
2
Americas
5
23
5
4
Asia Pacific
11
9
Action 3: Support the decarbonization of district heating and cooling
systems
Although we
recognize
that
we do
not exert
any direct
operational
control
over external
district heating
and cooling
systems, we plan
to support their
decarbonization in connection
with our real
estate consolidation strategy.
To
achieve
this objective,
we intend
to establish
an engagement
plan for
stakeholder
management
activities within
the next
few
years,
including
fostering
partnerships
and
exerting
influence
with
stakeholders
(e.g.
local
communities
and
utility
companies)
to promote the decarbonization of district
heating systems.
Lever 3: Transition to renewable electricity generation (scope 2)
The uptake of renewable electricity
generation is critical for supporting the transition
to a low-carbon electricity market.
Since
2020,
we
have
been
working
on
maximizing
the
use
of
renewable
energy
in
our
own
operations
globally.
In
accordance with our commitments,
we want to source 100% of the electricity we use from renewable-source-qualifying
generation by 2026 in line with RE100 technical guidance,
in markets where it is feasible to do so.
We aim
to
leverage
our position
in the
global electricity
market
to support
the transition
to a
global low-carbon
grid
through the key actions listed below.
Action 1: Identify and implement opportunities for direct power
purchase agreements
We will
regularly review our real
estate ownership and
lease arrangements to
identify substantial, long-term
opportunities
to
source
our
electricity
for
these
volumes
directly
from
renewable
electricity
generators
through
power
purchase
agreements.
This
will
support
the
build-out
of
new
electricity
generation
plants
and
strengthen
the
chain
of
custody
between the
generation source
and the
end
use of
electricity,
while decreasing
the carbon
content of
the grid
in the
longer term.
Action 2: Improve the transparency of the chain of custody
for renewable energy certificates
We will work with our key electricity suppliers to improve the transparency of the chain of custody for renewable energy
certificates associated with the supply of electricity to our assets. We
will ensure that existing products / electricity
tariffs
meet
RE100
technical
criteria
and
we
will
identify
opportunities
to
support
new
products
/
tariffs
that
improve
our
compliance, driving a more competitive and RE100
-aligned marketplace in the future.
Action 3: Build competitive renewable energy certificate supply
solutions
In electricity markets
where our volumes are
not large enough
to facilitate tariff negotiations, or
where regulated markets
restrict the electricity tariff options available
to us, we will continue to purchase additional
renewable energy certificates
to meet our residual needs.
We will undertake competitive tendering for broker services and maintain those contracts through our corporate
vendor
management
practices
to
ensure
the
renewable
energy
certificates
we
purchase
remain
aligned
to
evolving
technical
standards. We will also support renewable electricity generators where their products cannot be sold within local energy
products / tariffs.
Action 4: Actively contribute to consultations on renewable electricity
tracking systems in markets where infrastructure
is not developed
In
a
few
countries
where
we
operate,
the
infrastructure
to
measure
and
track
electricity
volumes
generated
from
renewable
sources
is
either
underdeveloped
or
non-existent,
compromising
the
availability
of
renewable
energy
certificates
in
line
with
RE100
technical
criteria.
In
these
areas,
we
will be
a
strong
advocate
for
the
development
of
tracking infrastructure, participating
in consultations to help change
the market, with a view
to extending our coverage
of electricity from renewable sources
into countries where renewable
energy procurement is unfeasible.
Action 5: Assess and install on-site renewable generation
of electricity at our owned assets
We regularly review our real
estate ownership and lease arrangements to identify those
assets where we expect to have
long-term operational control and available
infrastructure (e.g. roof space) that
could facilitate the installation of on-site
renewable
generation of
electricity.
We
will continue
to make
the necessary
investments
in on-site
renewables
where
physically and
economically feasible,
ensuring we
minimize our
dependency on
grid offerings
and reducing
the risk
of
unforeseen market
developments that
may compromise
our ability
to source
renewable
electricity tariffs
or renewable
electricity certificates.
Sustainability Report 2024
| Environment
48
Carbon removals and credits
We plan to
purchase technological
carbon removal
credits to
neutralize residual
emissions for
our 2035
scope 1
and 2
net-zero
target.
We
estimate
that
we
will
eventually
retire
around
5,000
metric
tons
annually
based
on
our
existing
contractual agreements for this
purpose. In 2022, we
signed two landmark partnerships
with Climeworks and neustark
to provide us with
carbon removal credits.
Both companies are
pioneers in innovative
carbon removal technologies.
We
were
also among
the
five
companies
that
joined
the
NextGen
CDR Facility
(NextGen)
as founding
buyers
to
scale
up
carbon removal technologies
and catalyze the
market for high-quality
carbon removal.
These partnerships continued
in
2024.
Furthermore, since
2007, we
have been
committed to
purchasing biogenic
carbon
reduction and
removal credits
that
correspond to 100% of our air travel emissions for the Group. In 2024, we retired 75,211 credits from biogenic sinks for
our voluntary air travel commitment, with an average
“A” rating from third-party carbon ratings
agency BeZero Carbon
at the time of retirement.
We only
purchase credits
from technological
and biogenic
sinks that
are assessed
against the
Integrity Council
for the
Voluntary Carbon Market (ICVCM) Core Carbon Principles and verified against either
the Gold Standard or Verra,
among
other international standards. Our carbon credit purchases
are strictly aligned to our internal Carbon and
Environmental
Markets Guideline, which sets out minimum requirements for
such market instruments.
We acknowledge that standards and methodologies for carbon credits are still evolving. We will
continue to improve our
portfolio through market partnerships
and industry engagement toward
a standardized quality benchmark
for the future.
›
Refer to “Key policies and principles” in the “Appendix
1 – Governance” section of this report for
more information about our
Carbon and Environmental Markets Guideline
Carbon credits canceled (UBS Group)
For the year ended
31.12.24
Carbon credits canceled in reporting year (tCO
2
e)
75,211
Internal carbon pricing
We continue to apply a forward-looking shadow
price of USD 400 per metric ton, covering all
our scope 1 and net scope
2 emissions,
to incentivize
the use
of low-emission
technologies in
real estate
projects. Through
this shadow
price, we
also aim to incentivize
the replacement of fossil-fuel
heating systems, real
estate relocation and
fuel transition in critical
engineering power systems.
The price applied reflects
the blended mix of
permanent carbon removals that
are required
to
neutralize
any
residual
emissions
that
cannot
otherwise
be
abated
as
part
of
our
existing
long-term
contracts
to
purchase high-quality credits from technological sinks, as
described in the section above.
GHG intensity per net revenue
Total revenues for the year end 2024, as disclosed in the UBS Group income statement,
have been used as equivalent to
net revenues for the purpose of calculating the GHG intensity
per net revenue.
The total GHG emissions (location- and market-based) exclude scope
3, category 15.
GHG intensity per net revenue (UBS Group)
For the year ended
31.12.24
31.12.23
Total GHG emissions (location-based) per net revenue (t CO
2
e / USD m)
24.61
37.38
Total GHG emissions (market-based) per net revenue (t CO
2
e / USD m)
22.13
34.31
Our environmental targets and performance in our own
operations
Environmental performance and key focus areas
We also
work toward
minimizing our
own operational
footprint across
key environmental
focus areas
and supporting
our employees,
suppliers and
clients to
do the
same. We
have identified
the following
key environmental
focus areas
beyond climate: waste, paper and water; travel; and biodiversity.
Waste, paper and water
In 2024,
we reduced
our landfill
waste by
7.8% compared
with 2023,
resulting in
a global
decrease
of approximately
148.7 metric tons.
In 2021, we
published a global
target that reflected
our aim to reach
zero waste to
landfill by 2025
in locations where we have influence.
After conducting local market research
and exploring pilots in each region for the
implementation of zero waste
to landfill, we
have concluded that it
is not operationally
feasible for us
to reach this
target.
It will
therefore
be retired.
We continue
to measure
our waste-to-landfill
tonnage and
aim to
explore options
to set
a
target that is more in line with market and operational reality.
Our ISO 14001 environmental management program and
additional contract spot checks ensure that our waste management partners operate in
accordance with contractual and
legislative obligations.
Globally,
our total
waste
volume decreased
significantly in
2024 compared
with 2023.
We
will
continue to raise employee awareness to further
increase the portion of recycled waste.
Sustainability Report 2024
| Environment
49
Paper consumption per
full-time employee
decreased by
22.4% in 2024
compared with
2023, reflecting the
impact of
increasing
digitalization
across
the
firm,
awareness
campaigns
aimed
at
our
employees,
some
restrictions
on
internal
printing and
our
ongoing
efforts
to reduce
the
number
of printers
in our
offices.
While the
total
paper
consumption
decreased significantly, the
share of sustainable
paper in the
remaining volume decreased
compared with 2023.
Of the
total amount of paper
used (printing paper and
paper products), 49.9%
was either sourced as
recycled or was certified
by
the
Forest
Stewardship
Council
or
an
equivalent
body.
These
measures
help
reduce
the
environmental
impacts
associated
with
paper
production
and
manufacturing
processes,
such
as
deforestation
and
energy
usage.
We
will
continue to work with
our vendors to increase
the share of evidenced
sustainable paper and paper products
in the course
of the coming year.
To enhance
water
efficiency
in
our
facilities,
we
have
expanded
our office
environmental
programs.
For example,
we
monitor water use and
optimize
flushing times and overflow
management. Our water
usage increased by only
1.7% in
2024 compared with 2023, despite the higher levels of
staff working in our offices.
Travel
In 2024, we saw an increase in business travel.
Our travel volumes (358m Pkm) for the combined organization following
the integration
of Credit Suisse
are substantially below
the UBS-only pre-pandemic
levels of
2019 (459m
Pkm). We remain
committed to
putting sustainability
at the
heart of
our business
travel program.
Reflecting this
commitment, we
have
focused our efforts on three key areas:
–
strengthening
our
reporting
with the
enhanced
carbon
intensity
metrics,
thereby
providing
comprehensive
insights
into travel-related emissions, both before and after
trips, to measure and manage our travel footprint;
–
updating our travel
policy to encourage
employees to opt
for eco-friendly transportation
options whenever
possible,
and strengthening our partnerships with
hotels that have embraced sustainable
practices, marking them prominently
with green flags at the point of sale to help our staff make
informed and conscious choices; and
–
continuing to purchase high-quality carbon offsets that correspond to 100% of our air travel
emissions for the Group.
Biodiversity
We have
taken steps
to increase
biodiversity across
our offices
and raise
awareness
among our
staff. For
example, we
have installed green roofs at selected office locations, combined with employee volunteering activities, such as Clean-Up
Day
and
a
program
to
highlight
the
critical
role
that
bees
play
in
our
natural
ecosystem,
which
all
served
to
shine
a
spotlight on the critical role of biodiversity.
Our reporting on environmental targets and indicators in our own
operations
The information about our environmental targets and indicators is included in our yearly GHG emissions
report, which is
prepared
in
accordance
with
the
ISO
14064
1:2018
standard.
This
report
is
subject
to
yearly
external
verification
in
accordance with the ISAE 3410 standard and
considering the ISO 14064 3:2019 standard.
We have
successfully passed
the ISO
14001 audits every
year since
implementation, including
- In the
EU and
the
UK,
our
activities
(excluding
legacy
Credit
Suisse
locations)
are
certified
according
to
the
ISO
50001:2018
energy
management system standard. These sets of extensive audit
standards ensure the appropriate policies and processes
are
in place, both
for the management of environmental
and energy topics within
our own operations and
for affirming their
daily implementation.
Sustainability Report 2024
| Environment
50
Environmental targets and performance in own operations
1
Actuals
(for the year ended)
Targets
Progress
(2024 vs baseline)
GRI
2
31.12.24
31.12.23
31.12.22
2025
2030
2035
Baseline
% change
Status
7
Scope 1 and net scope 2 greenhouse gas emissions in t CO
2
e
(reduction target in %)
305-1,
305-2
30,274
46,278
61,627
(57%)
(90%)
46,278
3
(35%)
green
Energy consumption in GWh (reduction target in %)
302-1-e
679
755
866
(35%)
755
3
(10%)
green
Share of renewable electricity
302-1
99.8%
95.6%
91.1%
100%
100%
76.6%
4
30%
green
Paper consumption in kg per FTE (reduction target in %)
5
301-1-a
21.5
27.7
26.9
(50%)
54.9
4
(61%)
green
Share of sustainable paper (recycled and FSC)
301-1-a-ii
49.9%
71.5%
52.7%
100%
63.2%
4
(21%)
amber
Waste in kg per FTE (reduction target in %)
5
306-3
62.7
69.8
66.3
(10%)
133.5
4
(53%)
green
Zero Waste to Landfill
6
306-5-c-iii
24.8%
22.2%
30.5%
0%
31.6%
4
(22%)
amber
Waste recycling ratio
306-4
52.9%
57.4%
52.2%
60%
50.2%
4
5%
amber
Water consumption in m m
³
(reduction target in %)
303-5
1.23
1.21
1.04
(5%)
1.33
4
(8%)
green
Legend: CO
2
e = CO
2
equivalents; FTE = full-time employee; GWh = giga watt hour; km = kilometer; kg = kilogram; m
m³ = million cubic meter; t = metric ton
1
Refer to
the “Environment”
section of
the Supplement
to the
UBS Group
Sustainability Report
2024, available
at ubs.com/sustainability-reporting,
for detailed
information about
our environmental
indicators.
Reporting period 1 January - 31 December.
2
Reference to GRI Sustainability Reporting Standards (see also www.globalreporting.org).
3
Baseline year 2023
4
Baseline year 2019
5
FTEs are calculated on an
average basis including contractors
6
In locations where UBS has influence and where alte
rnatives are available. This
is the last time we are reporting against
this target as it is being retired. See
details in section
'Waste, paper and water'
7
Green: on track; Amber: improvements required
Sustainable Technology Guild
The
Sustainable
Technology
Guild
continues
to
raise
awareness
of
sustainable
software
development
among
our
technology teams that
will have a
positive environmental
impact through
the optimization of
technology energy use.
It
is actively
developing measurement solutions for
the applications hosted
in our
data centers and
those in the
public cloud.
The primary
focus of
the Guild
continues to
be minimizing
the energy
consumption of
our technology
estate and
the
introduction of green software
engineering practices.
Sustainability Report 2024
| Environment
51
Managing the environmental impact of our supply
chain
Our key climate-related actions
Increased transparency and reporting of climate information by vendors
We are
tracking the
scope 1
and 2
emissions reporting
of our
GHG key
vendors. Vendors
that collectively
account for
more than 50% of our calculated scope 3, category 1, 2, 4
and 9 emissions are classified as “GHG key vendors.” On this
basis, we identified 95 GHG key vendors.
1
Overview of climate-related disclosures of our GHG key vendors (UBS
Group)
2022
2
2023
2024
GHG key vendors that disclosed
emissions and declared in CDP a
stated net-zero target
1
49% (41 / 83)
65% (62 / 95)
78% (74 / 95)
1
Shows GHG key vendors that disclosed emissions
and declared in CDP a stated net-zero target
versus GHG key vendors that did
not disclose emissions and / or did not
declare in CDP a stated net-zero target.
We do not independently verify our vendors’ goals or progress toward them.
2
2022 numbers are based on 83 GHG key vendors identified at that time and did not include Credit Suisse vendors. We have since
revised and updated the list of GHG key vendors from 83 to 95 in 2023 to include Credit Suisse vendors.
Numbers have, therefore, been tracked against
95 vendors from 2023 onward.
In 2024, 70%
(341 out of
487) completed voluntarily
climate disclosures on
the non-profit, third-party
platform run by
CDP. Though
this
is the
same
as the
percentage
achieved in
2023 (307
out of
440),
the absolute
number of
vendors
completing their disclosures increased 11% from 307 in
2023 to 341 in 2024.
Raising awareness on environmental matters through the sustainable
procurement guide
In
2024,
we
curated
a
sustainable
procurement
guide
to support
vendors.
From
environmental
certification
to
waste
management
and
sustainability
reporting,
this
guide
provides
insights
on
how
our
vendors
can
take
significant
steps
toward
reducing
their
environmental
footprint,
promoting
ethical
and
inclusive
practices
in
their
supply
chain
and
contributing to the well-being of ecosystems.
›
Refer to our climate disclosure guideline for vendors
and our sustainable procurement guide for vendors, available
at
ubs.com/suppliers,
for more information
Reduce supply-chain-related carbon emissions
We reduced
our scope
3, category
1, 2,
4 and
9 emissions
by 28%
to 0.81
million metric
tons of
CO
2
e in
2024 from
1.13 million metric tons of CO
2
e in 2023. This reduction was achieved through a combination of: (i) spend reduction;
(ii)
carbon reduction
initiatives;
(iii) closure
of vendor
facility offshore
development centers
(ODCs); (iv)
updated emissions
factors (including
updated
multi-regional
input /
output emission
factors per
industry,
updated and
higher number
of
supplier-specific emission factors used (where disclosed
and verified) and,
for cloud, activity-based emissions data used);
and (v) improved
data quality and
refinement of
calculation methodology.
Our focus is
to reduce
our emissions further
by identifying and implementing multi-year carbon
reduction initiatives.
1
Unique vendors in line with UBS’s vendor inventory. In 2023, we have revised and
updated the list of GHG key vendors from 83 to 95 to include Credit Suisse vendors.
Sustainability Report 2024
| Environment
52
Managing our supply chain responsibly
Through
our
Responsible
Supply
Chain
Management
(RSCM)
policy,
we
include
ESG
standards
in
our
sourcing
and
procurement activities.
Identifying, assessing and monitoring high-impact vendors
In 2024, 100%
of new vendors
were screened
for environmental
and social risks.
In 2023, the
same screening
process
was
conducted
for
100%
of
new
vendors.
In
addition,
we
identify
high-ESG-impact
vendors
when
establishing
new
contracts or renewals based
on whether the
vendors are providing goods and
services that could either
have a substantial
environmental and
social impact
or be
sourced
in markets
with potentially
high social
or governance
risks. Such
high-
impact
vendors
are
assessed
against
our
RSCM
policy.
These
vendors
are
required
to
provide
disclosures
about
their
management practices along with corresponding evidence,
which is evaluated by a specialist team. Actual and potential
negative impacts considered in the assessment
of vendor practices include, but are not
limited to, the following:
–
adverse
environmental
impacts
due
to
inefficient
use
of
resources
(e.g.
water
and
energy),
poor
environmental
practices and emissions during the life cycle of a product;
–
hazardous
substances,
emissions,
pollutants
and
the
limited
recyclability
of
products
that
adversely
affect
people,
nature and the environment;
–
modern slavery, forced labor or child labor;
–
unfair employment practices,
such as
low wages,
excessive overtime and
the absence of
occupational health and
safety
measures;
–
anti-corruption; and
–
insufficient management of subcontractors and suppliers regarding
sustainability aspects.
Should our
assessment reveal
any non-compliance
with our
policy, we
define and
agree,
together with
the vendor,
on
vendor-specific improvement measures
and we
closely monitor
the implementation
progress of
these remediation actions.
A lack of improvement
may lead to the
termination of the vendor
relationship. Vendors are
reassessed after 24
months
to ensure that, even
in long-term contracts,
our expectations regarding environmental
and social aspects are
being met
and continuously supervised. We also regularly screen active vendors as part of our sustainability and climate risk control
processes.
All high-impact vendors go through assessments against our
RSCM policy. We also undertake assessments on some
non-
high-impact vendors where
we have significant
ongoing relationships.
In 2024, we
carried out risk-based
due diligence
assessments
of 445
vendors
of newly
sourced contracts,
renewals
and ongoing
contracts
(versus
266
UBS vendors
in
2023
and
15
Credit
Suisse
vendors).
If
a
high-impact
vendor
does
not
provide
appropriate
evidence
in
line
with
our
expectations,
that
will
result
in
corrective
action
needing
to
be
taken
by
the
supplier
to
implement
a
policy
and
/
or
process for the non-compliant requirement within 12 to
18 months.
To drive positive change in
our supply chain, we also
require our vendors to improve
their management practices in
line
with
our
sustainability
goals
and
industry
best
practices.
Of
the
vendors
assessed,
33%
were
considered
in
need
of
improving
their
management
practices
(versus
42%
in
2023).
Specific
remediation
actions
were
agreed
upon
and
implementation progress is
being closely
monitored. We
have increased
our overall
RSCM assessment
coverage of vendors
by spend to 51%
in 2024 from 20%
in 2023. Contracts
in high-risk countries include
specific contractual requirements
relating to environmental management, human rights and labor
rights. If we were to become aware of
a case of modern
slavery
or
human
trafficking
occurring
within
our
direct
supply
chain,
we
would
address
it
through
our
governance
processes. Depending on
the severity of
the case, or
if satisfactory remediation
were not possible,
the supplier relationship
could be terminated.
In 2024,
none of
our vendor
relationships were
terminated as
a result
of our
assessments and
no human
rights issues
involving active, directly
contracted vendors
were identified or
reported. In part,
this was due
to having carried
out our
assessment process prior to signing contracts. We have also trained our supply chain function staff on human rights
and
modern slavery.
Embedding supplier sustainability in our everyday activities
The goods and
services we
buy,
and where
and whom we
buy them from,
are all
crucial elements
of our sustainability
impact. We
are
committed
to making
a
positive
environmental
and social
impact,
and we
expect
the
same
from
our
suppliers. Our Global Procurement and Vendor Management Policy and Guidance considers the ESG impacts
of products
and /
or services
when
selecting a
vendor.
In 2024,
this
policy was
extended
to also
cover
Credit
Suisse
and is
being
applied to Credit Suisse legacy vendors as well.
In
2024, we
trained
our
vendor
relationship
managers
on ESG
to
enable
them
to
have
impactful
discussions
on ESG
performance with their vendors. As an example,
in 2024, we noted an improved year-on-year
CDP rating for one of the
IT service providers that we have been engaged with over the last few years. The improvement in its ESG performance is
a significant milestone that underscores the positive influence
of our partnership.
We expect our suppliers to uphold high standards of ethics, mitigate risks and honor global and local labor laws, human
rights and
environmental
responsibilities.
Suppliers are
required to
follow our
global supplier
policies,
which include
a
policy on anti-bribery and corruption, sanctions, fraud and
anti-facilitation of tax evasion.
Sustainability Report 2024
| Environment
53
Inclusive growth in the supply chain
In
2024,
we
continued
our
efforts
globally
to
support
inclusive
growth
by
using
diverse
suppliers
that
are
often
underrepresented in supplying the needs of
major corporations. These are firms
certified / recognized by a local
/ national
government authority or
advocacy organization,
including,
but not limited
to, those certified
as women-owned; minority-
owned, including location-specific qualifications
such as aboriginal-owned in
Canada and indigenous-owned in
Australia;
veteran-owned,
including
ownership
by
service-disabled
veterans;
persons-with-disabilities-owned;
LGBTQ+-owned;
disadvantaged-owned,
including
historically
underutilized
businesses;
and
small
business
enterprises,
as
defined
and
recognized by their respective national
or state government criteria.
We identify and include diverse vendors as part of our “rule of one” guidance which aims to include at least one diverse
supplier in every competitive tender. The “rule of one” guidance does not give a
diverse supplier an added advantage in
the
competitive
tender,
but
provides
an
opportunity
for
a
diverse
supplier
to
participate
in
the
tendering
event.
The
success
of
the
diverse
supplier’s
bid
is
based
on
their
own
competitive
merits
with
respect
to
cost,
quality
and
sustainability, without further consideration
of the diversity of the
supplier. Globally, our diverse
spend accounts for 9%
of third-party spend, up
from 8.5% in 2023.
The share of
diverse spend has increased
despite a significant reduction
in
overall third-party spend from 2023 to 2024.
›
Refer to
ubs.com/suppliers,
for more information about how we work
with our suppliers,
including our Responsible Supply Chain
Management policy, our Supplier Diversity focus and our Supplier Code of
Conduct
›
Refer to our “Global Supplier Policies,” available
at
ubs.com/global/en/our-firm/suppliers/contracting-standards.html,
for more
information about our standard contractual terms with
suppliers
Sustainability Report 2024
| Environment
54
Supporting our climate approach: key enabling
actions
Beyond the
individual actions
related to
supporting our
clients’ low-carbon
transition and
reducing the
environmental
impact of our own operations
and supply chain as
described in the above
sections, we have identified five
key enabling
actions as listed
below to support
the implementation of
our climate approach
and “enable”
the implementation of more
specific targets and actions.
Governance and accountabilities (1)
Our sustainability
-
and
climate-related
activities
are
overseen
at
the
highest
level
of
our
organization,
and
we
have
a
clearly defined Group-wide sustainability governance in place,
including a dedicated climate program.
›
Refer to the “Governance” section of
this report for more information about our sustainability
governance
Industry, government and public sector engagement
(2)
We actively participate in political discussions to share
our expertise on proposed regulatory and supervisory changes and
engage
in
trade
associations’
exchanges
relating
to
sustainability
and
climate
(e.g.
via
the
International
Institute
of
Finance, the
Association for
Financial Markets
in Europe
and the
Swiss Bankers
Association). In
Switzerland, where
we
are headquartered, we
participated in the
consultation for a
new Swiss Financial
Market Supervisory Authority
(FINMA)
circular on
nature-related financial
risks in 2024,
where we
expressed our
support for
an approach
that is aligned
with
the Basel Committee on Banking Supervision (BCBS) Principles for the effective management and supervision of climate-
related financial
risks. Furthermore,
we launched
the Swiss
Climate Scores,
as we believe
they are
a key instrument
for
further increasing transparency
on the climate
alignment of financial
products. On a
regional basis, we
engage with policy
makers in
the EU,
the UK,
the Americas
and key
Asia Pacific
jurisdictions. In
particular, we
have participated
in several
industry association efforts in the EU regarding consultations
issued by prudential regulators (e.g. the European
Banking
Authority draft guidelines for the identification and management of ESG risks under the Capital
Requirements Directive).
Training and culture (3)
Educating
our
workforce
on
sustainability
and
sustainable
finance
is
an
important
part
of
ensuring
we
meet
our
sustainability
and
climate
ambitions.
In
2024,
we
continued
to
coordinate
the
delivery
of
sustainability
training
and
awareness activities across UBS through a dedicated sustainability education
workstream, with the number of headcount
instances of
specialized and
awareness
training totaling
430,405.
For example,
the
Sustainability and
climate
risk unit
trained relevant staff on sustainability and
climate risks along with emerging risks such as greenwashing.
Elsewhere, in 2024, we provided a variety of climate-related
trainings on a Group-wide basis. These included:
–
a series of information
sessions following the publication of
our UBS Sustainability Report 2023
to raise awareness and
understanding of our own progress in relation to our climate
objectives; and
–
climate-related training as part of our all-staff Global
Learning Week initiative, including webinars focused on net-zero
fundamentals, nature, greenwashing and impact accounting.
We expect
sustainability training
and education
to become
an increasing
focus for
regulators in
the coming
years. We
keep abreast
of this
changing landscape
through regular
updates with
our regulatory
monitoring teams
and continue
developing climate-
and net-zero-specific training for employees and the Board
of Directors.
›
Refer to the “People and culture make the difference” section of
this report for more information about training and culture
Data and analytics (4)
We implemented various data and analytics solutions
to better service our clients and operations.
As part of the efforts to integrate Credit Suisse, we needed to develop a foundational toolset for calculating, monitoring
and reporting the
combined firms’
climate-related metrics
covering financing
corporate loans
and facilitated
emissions.
In
2023,
we
successfully
completed
the
related
building
activity
and
met
all
the
quality
assurance
criteria
set
by
our
internal control functions.
In 2024, we worked on defining a more strategic and scalable toolset. Guided by our technology and ESG data strategy,
we developed a fully Cloud-based toolset, which
will be operational in 2025. The new toolset
will enable us to enhance
and more
frequently calculate,
monitor and
report our
climate-related metrics.
This will
allow our
business divisions
to
make
more
informed
decisions
on
their
decarbonization
pathways
and
transition
financing
activities,
and
facilitate
tracking of progress against our lending sector decarbonization
targets.
The
new
toolset
will also
enable
us
to
more
effectively
implement
changes
related
to
new
climate-related
standards,
methodologies and metrics.
Sustainability Report 2024
| Environment
55
Company Transition Assessment Scorecard (5)
In 2024, we
introduced the Company
Transition Assessment
Scorecard (CTAS) to
evaluate how advanced
a company is
on
its
path
to
decarbonization.
The
CTAS
was
designed
with
multiple
future
purposes
in
mind,
including
managing
climate transition risks, supporting clients’
climate transition efforts through engagement and product development
and
business planning.
The CTAS categorizes companies into
one of eight climate transition
readiness categories using a
rules-based approach.
This
approach
is
based
on
sector-agnostic
criteria
covering
emissions
disclosure,
decarbonization
commitments
and
targets, decarbonization
plans, and the actual carbon performance of the company.
Initially, and
in response
to regulatory
requirements, the
CTAS is
used as
an input
for our
Climate Risk
Rating
Models
(CRRM), in
particular the
transition risk rating
model. This model
assigns a
climate transition risk
rating at
the counterparty
level, which is then used
across various processes across:
(i) risk identification and
measurement; (ii) monitoring and
risk
appetite setting;
(iii) risk
management
and control;
and (iv)
risk reporting
and disclosure.
Although a
company’s CTAS
score, when available,
serves as an
input into the
CCRM and the
credit selection process,
it is not
used as the
sole criterion
for credit application decisions.
Companies are categorized by utilizing publicly available data from external third-party sources, which means it
is limited
to public companies
providing relevant
disclosures. The
CTAS will be
annually reviewed
and updated.
The scope
of the
CTAS may be
broadened in
the future
by incorporating
additional databases
or making
enhancements that
enable the
inclusion of companies lacking public data.
Overview
Module
Factor
Unaware
Aware
Strategic 1 –
Committed to
aligning
Strategic 2 –
Aligning
toward net
zero
Strategic 3 –
Aligned
targets and
plans
Aligned to net
zero
Achieving net
zero
Climate
solution
Emissions
disclosure
Disclosure of GHG
emissions
✓
✓
✓
✓
✓
✓
✓
Commitments
and targets
Long-term net-zero
commitment
✓
✓
✓
✓
✓
Medium- / short-term
net-zero targets
✓
✓
✓
✓
Net-zero commitment
recognized by third
party
✓
✓
✓
Interim targets
validated by third party
✓
✓
✓
Decarbonization
plan
High-level plan
✓
✓
✓
✓
Credible plan
✓
✓
✓
Carbon
performance
Carbon performance in
line with pathway
✓
✓
Carbon performance at
(or close to) net zero
✓
Note that the
categories from “Unaware”
to “Achieving
net zero” reflect
a company’s
progress toward
reducing its negative
impact on the
environment. On the
other hand, the
category “Climate solution”
is an
overarching category that goes beyond this and includes companies enabling the transition through their business model by generating
green revenues and aligning their capital expenditures accordingly.
›
Refer to the “Managing sustainability and climate
risks” section of this report for more information about how
we manage
financial and non-financial climate transition risk
Sustainability Report 2024
| Environment
56
Supporting our approach to climate – climate-related
materiality assessment
Methodology for assessing climate opportunities
Supporting the global economy’s transition to net zero by 2050 will
require vast amounts of investment. Banks can help
to effectively and
efficiently allocate
the capital necessary
for the transition,
which in turn
creates opportunities
for the
banking
sector
and
its
client
base.
Estimates
of
the
overall
opportunity
vary,
but
the
United
Nations
Framework
Convention on Climate Change (the UNFCCC) suggests the global transformation to a low-carbon economy is expected
to require investment of at least USD 4trn to USD 6trn
per year.
1
To assess the
opportunities that are specifically
relevant to UBS,
we evaluate a
range of potentially
relevant climate-related
categories, encompassing commercial products and services, social finance, resource efficiency and energy
consumption,
operational resilience and green funding. Our assessment
has been performed annually since 2021.
Our current methodology
follows a two-step approach:
i) identifying relevant opportunities; and
ii) assessing their relative
materiality for the Group over the short,
medium, and longer terms. It is
important to note that sustainability overall,
and
climate
specifically,
are
continuously
evolving
topics,
for
example
in
terms
of
applicable
political
and
regulatory
frameworks, as
well as
client and
market dynamics,
which means
our annual
assessment always
represents a
point-in-
time
analysis
and
needs
to
undergo
continual
challenging
and
review,
so
that
it
consistently
provides
an
accurate
representation of our opportunity space on climate.
We have identified individual opportunities across four distinct
areas of our business.
Commercial products and services
Identifying
commercially
relevant,
climate-related
business
opportunities
starts
with
the
sustainable
finance
ambitions
annually set
by our
business divisions
(Non-core and
Legacy excepted)
.
The link
to our
ambitions ensures
that relevant
opportunities are systematically
screened and selected.
We identify business
opportunities that
can be realized
through
our existing or new climate-related products and services.
Individual climate-related products and services are organized into six categories,
broken down into 11 sub-categories.
A
survey-based, qualitative materiality assessment
2
is performed at
the sub-category level
by an internal
panel of sustainable
finance experts.
The expert
panel assesses the
expected relative
materiality of
the individual sub-categories,
along with
the
time
horizon
over
which
these
are
expected
to
start
contributing
to
UBS’s
business
outcomes.
Materiality
here
is
interpreted in terms of three
equally weighted dimensions: i) revenue
potential;
ii) strategic relevance;
and iii) impact on
the environment and stakeholders (“double
materiality”). The scores are
subsequently aggregated into UBS Group
-level
values for each of the product categories.
The
assessment
is
done
in
a
qualitative
manner
based
on
expert
judgment
in
order
to
take
account
of
the
inherent
difficulties
involved
in
making
more
precise
and
/
or quantified
assessments
of future
commercial
developments.
This
applies
particularly
in
an area
such as
climate,
where
regulatory and
policy frameworks,
and market
conventions and
industry trends, are still subject to considerable change and
evolution.
The following commercial categories of products and services were
included in our assessment:
Climate-related investment products
These
products
include,
for
example,
our
net-zero-ambition,
climate-aware,
climate-transition,
low-carbon
and
Paris-
Agreement-aligned
portfolios,
carbon-referencing
structured
products
and
dedicated
climate-focused
investment
modules.
We
also
see
opportunities
within
real
estate
and
private
market
investment
strategies
related
to
climate
mitigation, such as batteries and cold storage or energy-efficient
properties.
Carbon-related financial services and products
This includes helping clients in different business lines identify and assess opportunities related to carbon credits
(in both
compliance and voluntary markets).
Climate-related financing products and solutions
These include
green balance
sheet lending
to corporate
and private
clients, structuring
and underwriting
green
bonds
for
corporate
and
sovereign
issuers,
and
supporting
and
financing
innovative
climate
start-ups,
along
with
green
infrastructure finance (e.g. renewable
energy).
Advice on strategic climate opportunities
This includes
corporate
advisory work
incorporating
climate
factors,
for
example in
valuation and
analysis,
and,
more
specifically,
advising
on
transactions
where
climate
considerations
are
clearly
identifiable
as
part
of
the
transaction
rationale from the point of view of either an acquirer
or a target company.
1
Based on information from the UNFCCC, see https://unfccc.int/sites/default/files/resource/cma2022_L21_revised_adv.pdf
.
2
To guide this assessment, we have used the definition for materiality as provided by the Global Reporting Initiative (the GRI).
Sustainability Report 2024
| Environment
57
Thematic research
This includes
in-depth climate
-related
research
and thought
leadership work,
looking across
and delving
into relevant
developments for the transition to
a low-carbon economy,
including at a sectoral level,
and links to the
financial industry,
financial markets
and scientific
research.
In a
highly dynamic
field,
climate-related
research
plays a
key role
in keeping
our clients and ourselves abreast of key
trends.
Data analytics and metrics
These include data-driven
analytical tools available
in various business
lines, which are
being continually developed
and
further refined
to cover
relevant
sustainability-
and climate
-related
aspects in
greater
depth and
breadth.
Examples
of
their
application
include
the
portfolio
management
process,
quantitative
modeling,
climate
exposure
analytics
within
client reporting
and data-powered
strategic insights
work.
We
also have
a range
of tools
and calculators
focusing on
aspects such as emissions, renovations or subsidies, which support our clients’ decision-making on their decarbonization
journey.
Platforms
These
include
innovative
platform
solutions
enabling
clients
to
gain
access
to
climate-related
products
such
as
green
mortgages and, in
future, voluntary carbon credits.
Such platform solutions
enable UBS to
scale up and
achieve an impact
going beyond some of our own operational limitations (e.g.
our balance sheet, geographical reach or product
range).
Social Impact
In addition to
our commercial
offering, our
clients have
access to solutions
that help
them to realize
their philanthropy
goals, including climate
-related ones. Through
our Philanthropy Services
teams within
Social Impact, we
provide grants
and
social
finance
investments
for
climate-related
projects
within
the
environment
and
climate
portfolio
of
the
UBS
Optimus network of foundations. Its environmental
and climate strategy focuses on two
pillars, “Sustainable Land Use”
and “Coastal and Marine Ecosystems,” and helps clients to identify and select potential opportunities, with an emphasis
on
supporting
development
and
increasing
financing
for
climate
mitigation,
resilience
and
biodiversity
enhancement
using nature-based
solutions. Our program
directors for
climate and environment
assess and select
these opportunities
in terms of their fit with
the UBS Optimus network
of foundations’
climate and environment strategy,
the quality of the
organization’s team and track record, and the potential for scale, and
also for their expected results in key impact areas,
including
work
on
climate
change
mitigation,
adaptation
and
enhancing
biodiversity.
They
are
then
reviewed
and
approved by a senior-level approval committee. Experts from our Philanthropy Services
and the UBS Optimus network of
foundations teams provide a
summary assessment of the
materiality of this portfolio
of projects, which is
then included
in the overall assessment.
Our
philanthropy
opportunities
are
assessed
for
materiality
and
have
scores
assigned
across
the
two
dimensions
of
mitigation
and
adaptation
by
experts
from
Social
Impact.
While
we
consider
these
opportunities
relevant
for
our
assessment and for
UBS as an organization,
they do not
carry direct revenue
potential. Within the
materiality score, we
rate
the
revenue
potential
as
zero,
distinguishing
philanthropic
opportunities
from
the
commercially
relevant
opportunities. By definition,
philanthropy opportunities always
have a lower
score than commercial
opportunities, from
a financial relevance perspective.
Own operations
We are committed
to reducing our
operational impact on
the environment and
have set
clear reduction targets
for our
use of
resources, as
well as
formulating ambitious
net-zero
commitments. Experts
from our
Group Corporate
Services
team,
responsible
for
managing
our operational
footprint,
have
assessed the
materiality of
opportunities
arising
from
efforts in this
area. These opportunities can be
grouped into three distinct
categories: resilience, energy consumption and
resource efficiency.
Climate-related funding
Through
our
Green
Funding
Framework
and
in
partnership
with
relevant
business
lines,
we
continually
assess
new
opportunities
for
climate-related
funding that
could contribute
to expanding
our
investor base
or achieving
favorable
funding costs. As
part of this
assessment, experts from
Group Treasury review
the materiality of
opportunities for funding,
such as green or sustainability-linked bonds.
›
Refer to the “Supporting opportunities” section
of this report for more details about our sustainable and
climate finance product
offering and achievements in 2024
›
Refer to the “Social Impact” section of this report for
more details about the activities of Social Impact
›
Refer to the “Environment” section of this report for more details
about our in-house environmental management
›
Refer to our Green Funding annual investor report, available
at
ubs.com/greenbonds
Sustainability Report 2024
| Environment
58
Materiality results for 2024 climate-related opportunities
The summarized
results for
UBS from
the various
expert assessments
in 2024
and building
on prior-year
outcomes are
displayed
in
the
infographic
below,
placing
individual
categories
within
low
/
medium
/
high
materiality
and
short-
/
medium- /
long-term time-horizon
segments. We
define short-term
as less
than three
years, medium-term
as three
to
10 years and long-term as beyond 10 years.
Categories are displayed on a relative scale. Given
our capital-light business
model,
it
is
in
line
with
our
expectations
that
climate-related
investment
products
are
the
highest-ranked
immediate
commercial product opportunity.
The highest relative
degrees of materiality
are also seen
for data analytics
and metrics
and thematic research as key enablers for a wider range of other
business opportunities with clients. Resilience is seen as
the most important climate-related operational opportunity
.
Sustainability Report 2024
| Environment
59
Assessing the materiality of climate-driven risks
Impacts from
climate-driven
risks arise
through
changing
climate
conditions
(physical
risk) and
efforts
to
mitigate
the
effects of a changing climate
(transition risk). These climate risk drivers
affect banks, the financial system and the
broader
economy through both micro- and macroeconomic channels.
Annually, the
sustainability
and climate
risk (SCR)
unit
coordinates a
systematic
risk
materiality assessment
of climate-
related
risks
in
accordance
with
the
ISO-14001
environmental
management
standard.
The
degree
of
materiality
is
determined
by
assessing
the
financial
product
or
service
and
the
associated
climate
risks.
Items
rated
as
having
an
increased potential risk are
mapped to relevant risk
controls. The assessment considers transmission
channels, risk drivers,
additional amplifiers and / or mitigants and the full range
of time horizons.
Risk-rating process
First, UBS
evaluates
the
inherent
risk posed
to UBS
at
the
product
/ service
level utilizing
an expert
-based
framework
(aligned with Basel Committee on Banking Supervision guidance)
through the following key transmission channels:
(i) traditional
risk category,
across financial
and non-financial
risks (e.g.
liquidity for
financial, regulatory
compliance, or
reputational for non-financial);
(ii) risk driver
(e.g., climate policies,
low-carbon technology
for transition risk)
and impact drivers
(e.g. creditworthiness)
considering potential impact (e.g. probability of default);
and
(iii) additional risk amplifiers (e.g. macroeconomic feedback
loops) and / or risk mitigants (e.g. internal controls).
Inherent risk ratings are given on a qualitative scale ranging
from low to high.
Then,
overall
proximity
of UBS
activities
to potential
negative
impact on
climate
is evaluated
alongside the
risk-rating
process, resulting in an impact rating at the product / service
level based on the same scale.
The most
relevant time
horizon for
inherent risks
and impacts
is determined
ranging across
short-term (less
than three
years), medium-term (three to ten years) and long-term (beyond
ten years).
Initial ratings
and time
horizons are
proposed by
leveraging internal
subject-matter
expertise,
scientific and
regulatory
publications, market
trends analyses,
risk monitoring,
transaction landscape
and the
relevant business
and /
or product
model. The qualitative expert-driven initial ratings
are then reviewed and approved in partnership
with relevant business
division representatives.
Finally, inherent risk ratings and
impact ratings across products and
services are aggregated to
Group level. The climate-
driven risk ratings by risk driver and traditional risk category (shown on
the Y-axis on the chart below) are plotted against
the time horizon (shown on the X-axis on the chart below).
Assessment outcome
In the graph
below, we show
the climate-driven risk
ratings by risk
driver (light gray)
and traditional risk
category (dark
gray).
For
traditional
risks,
we
aggregate
results
into
financial
risk
categories,
including
credit,
market,
treasury,
and
liquidity risks, and non-financial risk categories, including
business, continuity, compliance, and reputational risks.
Physical risk
(D1) is assessed
as potentially lower
risk to UBS
in comparison
to transition
risk (D2-market
sentiment and
D3-policy). This is primarily due to
UBS’s product footprint and greater uncertainty associated
with the timing and impact
of climate-related transition risks.
Selected non-financial risks (Reputational-R2, R3.2-NFR Compliance) are rated as relatively higher risk to UBS, due to the
focus on regulatory compliance (banks being regulated on climate risk management)
and liability, as well as a regulatory
focus
on
sustainable
product
labeling
(truth-in-marketing
regulations).
Due
to
UBS’s
established
approach
to
sustainability-
and
climate-driven
business
risks
(R4),
these
are
rated
lower
when
compared
to, for
example,
inherent
reputational risk exposure.
Climate-driven liquidity
(R 1.3) and
market and treasury
risks (R 1.2)
are assessed as
having relatively lower
potential to
affect UBS
in the short
term, in comparison
to credit
risk (R
1.1), which is
assessed as
having higher
potential to
affect
UBS in a
comparable time horizon, due
to the overall UBS
portfolio characteristics. This is
mainly driven by potential direct
or indirect
transition costs,
or exposure
to chronic
and acute
physical risks
in locations
likely to
be impacted
by climate
change. Such effects could lead to a deterioration
in creditworthiness, which in turn would have an impact
on Expected
Credit Losses (ECLs).
›
Refer to "Note 20 Expected credit loss measurement” in the
“Consolidated financial statements” section of
the UBS Group Annual
Report 2024, available under “Annual reporting” at
ubs.com/investors
, for supplementary information about the assessment
of
impact of sustainability and climate risk on the
weighted-average ECL
Sustainability Report 2024
| Environment
60
Climate-driven risks by risk driver and risk type
Physical risk drivers
D1-Physical
: Impacts from
extreme weather events and
incremental climate change
may affect the value
of physical assets
that
UBS
owns
and
finances.
These
impacts
should
be
diligently
addressed
in
accordance
with
UBS’s
financial
risk
assessment. We
consider the
risks to
our own
physical assets
through our
comprehensive business
continuity planning
and physical climate risk identification
process. Incremental changes in climate
(e.g., rising temperatures and changes
in
precipitation
patterns)
can
exacerbate
extreme
events,
making them
more
frequent
and severe,
which
in
turn
affects
economic output
and productivity.
Such events
could reduce
the value
of properties
held as
collateral. We
see adverse
weather
risks
occurring
more
frequently
in
the
short
term.
The
relevance
of
physical
risks
equally
derives
from
geographical and
sectoral disaggregation.
Based on physical
risk heatmaps,
our exposure to
climate-sensitive regions
is
considered moderately low. Similar conclusions are reached
based on the sectoral disaggregation of our businesses.
Transition risk drivers
D2-Market
sentiment:
Protecting
our clients’
assets
is a
strategic pillar
in
our approach
to climate.
Amid the
growing
demand for
climate-focused
products
and services,
we aim
to actively
respond
to
market
changes driven
by the
low-
carbon transition
and our clients’
interest in
managing climate-related
risks. We
address this
potential risk
through our
sustainability-
and climate-focused product and service offering.
D3-Policy and regulatory:
As a global
financial services firm
active in wealth
management, asset management, investment
banking and the provision of services to corporate and
institutional clients, UBS may be affected directly and indirectly by
new
carbon
pricing
regulation
and
energy
transition
policies.
These
measures
can
be
designed
to
both
constrain
the
impacts of climate change and
/ or promote an
adaptive response to climate change impacts.
They could impact our own
operations, as well as the business operations of our
corporate clients, given that such clients rely on the
firm to finance
their
activities
across
a
range
of
sectors.
We
routinely
assess
the
impact
of
current
and
emerging
regulations,
either
directly affecting our operations or indirectly affecting those sectors
where we have clients.
D4-Technological change:
Together with corporate clients that rely on
UBS to finance their activities in
a range of sectors,
UBS may
be both
directly and
indirectly exposed
to technological
changes.
UBS analyzes
changes, such
as the
rise of
electric vehicle
and battery
technologies in
the automotive
sector, or
energy storage
technology advancement
impacts
on the power utility sectors, through scenario analysis approaches.
Climate-driven risks
R1.1-Credit risk:
We assess
the potential
impact of
climate-driven risks
on UBS
through counterparties
’
ability to
repay
their debt and our ability to fully recover the value of
the loan in the event of a default, due to collateral
devaluation.
Sustainability Report 2024
| Environment
61
R1.2-Market & Treasury risks:
We assess the potential impact
of climate-driven risks on the
value of our financial
assets,
by
altering
or
revealing
new
information
about
potential
future
economic
conditions
or
the
value
of
real
or
financial
assets, resulting in downward price shocks and an
increase in market volatility.
R1.3-Liquidity
risk:
We
assess
the
potential
impact
of
climate-driven
risks
on
liquidity
adequacy,
buffers
and
funding
conditions directly or indirectly through our ability to raise funds and liquidate assets and / or our
customers’ demand for
liquidity.
R2-Reputational:
We assess the potential impact of climate-driven risks caused by unfavorable perception, or a lessening
of our reputation, from the point of
view of clients, industries, shareholders, regulators, employees or the general public,
which may
lead to
potential financial losses
and /
or loss
of market share. Reputational
risk is
considered across all
business
activities,
transactions,
and
decisions
and
includes
sustainability-related
reputational
risks,
such
as,
for
example,
greenwashing risk.
R3.1-NFR
Continuity:
Our
business
continuity
is
associated
with
climate-sensitive
investments
and
businesses.
We
understand
the
UBS
sustainability
impact,
and
risks
and
opportunities
that
affect
our
value
and
the
operational
environment.
We
plan
and
create
strategic
direction,
develop
tangible
and
measurable
targets,
and
link
these
to
operations development
.
R3.2-NFR Compliance:
Climate-driven operational
risk may
increase with
regulatory compliance
and liability.
The aim
is
to
improve
the
firm’s
risk
profile
through
a
more
effective
and
efficient
compliance
function
focused
on
the
most
important risks. We identify, manage, and mitigate these
risks to avoid material impact on UBS.
R4-Business:
We assess
the potential
non-financial impact
on UBS from
inadequate or
failed internal processes,
people
and systems and / or externally
due to physical climate
events or stakeholder legal
action. UBS mitigates the above
risks
with global operations and interregional capabilities to provide
business.
›
Refer to the “Managing sustainability and climate
risks” section of this report for more details about climate-related risks
Sustainability Report 2024
| Social
62
Social
People and culture make the difference
Driving sustainable performance
We are
dedicated to being
a world-class employer
for talented individuals
across all our
markets and a
place where people
can
unlock
their
full
potential.
Our
global
presence
in
51
(2023:
52)
countries
and
jurisdictions,
combined
with
the
expertise of 110,323 employees
worldwide, helps to position
us to create better
outcomes for our clients,
communities
and colleagues.
Our employees execute our business strategy and deliver on
our client promise. We therefore aim to attract, develop
and
retain employees who
have the capabilities,
potential and mindset
to help us
achieve those aims.
Corporate citizenship
principles are embedded
into our employment
practices, for example
in the benefits
we offer and
in our
fair pay practices.
As a founding member of the World
Economic Forum’s Good Work Framework, we partner with like-minded companies
to develop and implement metrics that support high-quality
work worldwide.
›
Refer to the “Driving social impact” section of
this report for more information about our community
impact and employee
volunteering activities
›
Refer to the Supplement to this report, available at
ubs.com/sustainability-reporting
, for more information about our workforce
The three keys and our corporate culture
Our culture is grounded in
our three keys to
success: our Pillars, Principles and
Behaviors. These keys support our business
decisions
and
our
approach
to
people
management.
Bringing
together
two
global,
systemically
important
banks
and
building
a
unified
culture
across
our
combined
organization
continued
to
be
top
priorities
in
2024,
overseen
by
a
dedicated culture
integration forum.
In addition,
the Corporate
Culture and
Responsibility Committee
of the
Board of
Directors (the BoD) monitors and reviews the activities related
to the development of the Group’s corporate culture.
›
Refer to
ubs.com/global/en/our-firm/our-culture.html
for more information about our three keys to success
›
Refer to the “Governance” section of
this report for more information about key governance
bodies pertaining to ESG matters
Sustainability Report 2024
| Social
63
We support
culture-building through a
number of
Group-wide, divisional and
regional initiatives. Examples
of that
include
our Group Franchise Awards program,
which recognizes employees for cross-divisional
collaboration and for suggesting
innovation or simplification
ideas.
Our global peer-to-peer
appreciation program, called
Kudos, acknowledges colleagues’
exemplary behavior, promoting
excellence, fostering
belonging, and increasing
engagement and employee
satisfaction.
Launched in 2024, a global initiative called Crafting our Future uses interactive in-person sessions to ensure leaders at all
levels are aligned with our strategic priorities and our culture.
Hiring, developing and retaining talent
In
2024,
we
hired
a
total
of
8,525
(2023:
11,435)
external
candidates
across
the
Group
and
developed
2,168
(2023: 3,720) graduates and other
trainees, apprentices and interns in various
programs. The difference
in year-on-year
external
hiring
numbers
was
largely
due
to
prioritizing
internal
mobility
in
our
talent
sourcing
processes
along
with
proactive internal recruiting efforts.
We are one of the largest providers of multi-year apprenticeships in Switzerland. We
also sponsor a multi-year apprenticeship program in the UK and summer internship and work-study programs in the US,
EMEA, Asia Pacific and Switzerland.
›
Refer to the Supplement to the UBS Group Sustainability
Report 2024 and to
ubs.com/global/en/careers/awards.html
for
employer ratings and recognitions
We are committed to offering hybrid working options wherever possible. In 2024, most employees were eligible to work
partially
from
home,
depending
on
their
role,
regulatory
restrictions
and
location,
along
with
divisional
or
functional
requirements. Such arrangements, along with options such as flexible
locations or hours, part-time working, job sharing
and partial retirement,
support employee engagement and retention and help
us attract a wider range of candidates.
Our talent
management approach
includes structured
talent and
succession reviews
to help
us identify
future leaders,
ensure
business
continuity
and
proactively
manage
employee
development.
In
this
respect,
cross-divisional
and
international mobility for early-career talent, mid-career professionals and senior leaders is
a central element. Our Group-
wide talent offering is supplemented by programs in the business divisions, functions and regions. These
programs cater
to a broad audience ranging from senior leaders to emerging
junior talent. We also offer targeted development for new
and
experienced
line
managers.
Regular
leadership
events
align
business
heads
with
our
strategy
and
further
our
corporate
and cultural
integration.
Our Win
As One
Team
initiative,
for example,
empowers
leaders to
cultivate
high-
performing teams that embody our core values and uphold the
highest standards of behavior.
Our Career Navigator platform supports internal mobility with a suite of self-service tools and resources to explore career
paths, search for jobs and short-term rotation opportunities, and connect
with mentors. Furthermore, line managers are
expected to support both individual development
and internal mobility. In 2024,
52.6% (2023: 38.8%) of all roles
were
filled by internal candidates.
Internal
training
is
delivered
via
our
UBS
University
platform.
The
offering
includes
client
advisor
certification
and
regulatory, business
and line
manager training
alongside modules
on culture,
sustainable finance,
artificial intelligence,
data
literacy,
well-being
and
other
topics.
Launched
in
2024
in
collaboration
with
a
leading
US
university,
our
new
sustainability
investment
program
gives
professionals
across
the
firm
the
knowledge
and
tools
they
need
to
make
sustainable
investment
decisions
that
may
lead
to
higher
risk-adjusted
returns.
In
addition
to
internal
training,
we
partnered with a leading external provider in 2024 to offer
thousands of additional learning opportunities to all staff.
All employees are
required to meet
initial and
ongoing training and
competency requirements appropriate to
the activities
they undertake on
the firm’s
behalf. Furthermore,
we may
require employees
to complete mandatory
or business-required
training, in line with our mandatory learning policy.
We
invested
approximately
USD 0.1bn
in
training
in
2024,
with
permanent
employees
completing
more
than
3.0m
learning activities (including
mandatory training on
compliance, business
and other
topics). This equated
to an average
of 24.8 (2023: 15.3) training hours
per employee.
Performance management
Our performance
management approach
(MyImpact) reflects
our strategy
and supports
our high-performance
culture.
Annually,
employees
set
objectives
that
foster
accountability,
translating
business
objectives
into
outcome-focused
individual objectives and further aligning
the organization to what matters most.
All employees also receive a specific risk
objective
that
reflects
how
we
manage
risk
and
supports
a
strong
and
proactive
risk
culture.
We
consider
both
performance-
and behavior-related objectives because we value what an employee accomplishes and how our behaviors
– accountability with integrity,
collaboration and innovation – are demonstrated.
An embedded feedback
app enables employees
to give and
receive feedback in
real time throughout
the year, supporting
continuous improvement and
course correction where
needed.
In 2024, more
than 371,000 (2023:
296,330) instances
of feedback were given
across the combined organization.
Annual performance reviews evaluate employees
against their
objective
outcomes,
feedback
and
behavior,
and
100%
(2023:
100%)
of
eligible
employees
received
a
performance
review for the year.
Sustainability Report 2024
| Social
64
Employee engagement
Our employees
want to
be heard
and to
be involved
in shaping
their daily
experience. As
such, we
offer opportunities
throughout
the
year
for
employees
to
connect
with
management
and
provide
feedback
on
topics
such
as
strategic
alignment, employee
engagement, well-being,
our work
environment and
line manager
effectiveness.
As an
example,
initiatives such as our regular “Ask the CEO” event
give employees the chance to learn about (and ask questions
about)
topics such as strategy and direction.
Our multi-faceted employee listening strategy
is adaptable and captures feedback in a timely way. We conduct employee
lifecycle surveys, short “pulse” surveys
to understand what is on top of employees’ minds and in-depth analyses,
such as
virtual focus
group sessions.
In 2024, those
conversations
allowed participants
from every business
division and
function to
share their perspectives and
insights on the
integration and provided employee sentiment data
points to track
progress.
Group-wide surveys
measure cultural
indicators,
such as line manager
effectiveness and
employee engagement.
Our 2024
Group-wide survey,
which had
a
77% employee
response rate,
assessed indicators such
as
line manager
effectiveness,
engagement,
culture
and
pride.
An
engagement
score
of
83%
in
that
same
survey
confirmed
that
our
employees
recommend us as an employer. All of these scores
were above the financial services
benchmark.
1
We continue to strive to
be an employer
of choice in
the financial
sector.
Employee representation
In addition to seeking out employee
feedback, we maintain an open
dialogue with our formal employee
representation
groups. Our Human
Rights Statement and our
Code of Conduct
and Ethics (the
Code) outline our
responsibility to respect
the rights of our workers. The
UBS European Employee Forum and the European Works Council,
Credit Suisse Group AG
include representatives
from
all European
Union Member
States where
the UBS
Group
has a
presence.
They consider
topics
related
to
our
performance
and
operations.
Local
works
councils
consider
benefits,
workplace
conditions
and
reorganizations,
among other topics. Collectively, these groups represent 52.0% (2023: 51.5%)
of our global workforce.
Where applicable, our operations are subject to
collective bargaining agreements. Benefits are aligned with
local markets
and often go beyond legal requirements or market practice.
Fair and equitable pay
Fair and consistent
pay practices are designed
to ensure that employees
are appropriately rewarded for their
contribution.
We pay for performance, and we take pay equity
seriously. We have embedded clear commitments in our compensation
policies and practices
and apply the
same fair pay
standards across
all locations.
We annually
review our approach
and
policies, in line with established equal pay methodologies, to
support our continuous improvement.
As part of our commitment to equal pay, we regularly conduct internal reviews on
pay equity, and our statistical analyses
show a differential
between male and
female employees in
similar roles across
our core financial
hubs of less than
1%.
If we find any gaps not explained by business or by appropriate employee factors
such as role, responsibility, experience,
performance or location, we look at the root causes and
address them.
We also aim to ensure that all
employees are paid at least a
living wage. We regularly assess employees’
salaries against
local living wages,
using benchmarks
defined by the
Fair Wage Network.
Our analysis in
2024 showed that
employees’
salaries were at or above the respective benchmarks.
›
Refer to the UBS Compensation Report 2024, available
at
ubs.com/annualreporting
, and to
ubs.com/sustainability-reporting
for
our 2024 UK Gender & Ethnicity Pay Gap Report
Employee support
We are committed to being a responsible employer and to caring for our employees. That is one reason we offer flexible
working arrangements
and promote
employee health
and well-being.
Social, physical,
mental and
financial well-being
elements
are
woven
into our
HR policies
and
practices.
For example,
our
support
for
employee
well-being
includes
a
range of programs,
benefits and workplace
resources, along with
a specialized eLearning curriculum
to help employees
better manage their health, foster well-being and strengthen
their resilience. A dedicated well-being portal
consolidates
our global offering and promotes regional
networks, initiatives and resources.
In
2024,
employees
across
the
firm
participated
in
virtual
fitness
challenges,
mental
health
initiatives,
volunteering
activities and financial education events,
and everyone had access to
a specialized mindfulness app. We
also progressed
with our #WorkingWithCancer commitment through a
mentorship program,
informational sessions and coffee corners.
Benefits and assistance
All our employees have access to competitive benefits, such as healthcare, well-being and retirement benefits, insurance
(such
as
life
and
disability
insurance)
and
flexible
leave
policies,
where
applicable.
All
employees
are
also
covered
by
policies
to
protect
against
employment
injury
or
disability.
Parental
leave,
including
adoption
leave,
is
available
to
all
employees, as indicated in local HR policies, and all locations
offer family-related leave. Benefits
are set in the context of
local market practice and are regularly
reviewed for competitiveness.
1
Benchmarks provided by Ipsos Karian and Box as of the third quarter of 2024.
Sustainability Report 2024
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65
Employee assistance programs and
internal teams help employees
and their family members
manage personal or work-
related issues that may affect their
well-being. The absentee rate of
the UBS Group excluding Credit Suisse in
2024 was
2.1%
(2023:
1.9%)
globally
and
Credit
Suisse’s
absentee
rate
was
2.4%
(2023:
2.3%)
of
total
scheduled
days
in
Switzerland
1
, according to the number of illness or accident absences recorded
in the respective self-service HR tools.
Should
business
or organizational
circumstances
arise
that
lead
to employee
redundancy,
we
offer
redeployment
and
outplacement
services
with
a
focus
on
redeployment
within
UBS.
We
believe
these
measures
help
skilled
employees
affected
by restructuring
to
favorably
position
them
in
the
labor
market.
Employees
considering
retirement
also
have
access to various resources to help prepare them for this
transition.
›
Refer to the “Health and safety statement”, available
at
ubs.com/sustainability-reporting
, for more information about UBS’s
health and safety statement
›
Refer to
ubs.com/employees,
for more information about benefits and assistance
Equal opportunities and whistleblowing
We provide equal employment
and advancement opportunities for
all individuals.
We are an equal
opportunity employer,
and our policies do not tolerate
harassment of any kind. We
have measures in place
to prevent discrimination,
bullying,
victimization,
harassment
(including
sexual
harassment)
and
retaliation,
along
with
an
anti-harassment
representative
who independently reviews relevant training,
policies and protocols.
Employees are
encouraged to raise
concerns openly
and to report potential
violations of the Code.
Group-wide, staff
have
multiple ways, including a telephone hotline and an online whistleblowing
form that offers confidential and, if preferred,
anonymous ways, to raise concerns about
any potential breaches of laws,
regulations, rules or other legal requirements,
policies, professional standards, sexual misconduct or harassment, or any
violation of the
Code. We do
not tolerate any
form of retaliation
against any employee
who reports
a concern that
they reasonably
believe is a
breach or violation.
Workforce inclusion
We are committed to being a diverse
and inclusive workplace based on meritocracy, and
aim to build a culture of
belonging
where all employees
are recognized and valued,
and where everyone can
be successful and thrive.
At UBS, we aim
to hire and
retain the best people for the
right roles, to deliver for our
clients, our businesses, our shareholders and
the communities we
serve. In order to achieve this, we have a diverse workforce with a variety of skills, experiences and backgrounds that reflects
the diversity of our clients to serve them at our best. It is
also critically important to us that we respect an environment where
all our employees are treated
fairly and able to reach
their potential. In every location in which
we operate, we continue to
act
in accordance with the current
law and regulations and will monitor
any changes to ensure we remain
consistent.
›
Refer to the “Supporting opportunities” section
of this report for more information about our clients
›
Refer to the “Driving social impact” section of
this report for more information about the topic of
community and society
›
Refer to the “Managing our supply chain responsibly”
section of this report for more information about our
suppliers
Our
workforce
inclusion
strategy
is built
on
four
pillars:
transparency,
hiring,
developing
and
belonging.
We
leverage
these four pillars
to help support
our entire workforce
across a variety
of personal characteristics
including, but not
limited
to, gender,
culture, race,
ethnicity, sexual
orientation and
identity, disability,
family, veteran
status, and
generations, to
create an inclusive culture for everyone.
Transparency
Transparency
is the foundation framework through which we enable leaders to
deliver the strategy, and everyone is held
responsible.
We
leverage
various
communication
channels
and
line
manager
objectives
to
drive
awareness,
benchmarking,
thought
leadership
and
feedback
to
inform
the
strategy,
and
data
monitoring
with
respective
characteristics, including management dashboards and
toolkits, to support our entire workforce.
In
2024,
26.7%
(2023:
37.5%)
of
members
of
the
GEB
41.7%
(2023:
33.3%)
of
members
of
the
BoD, and
33.8%
(2023: 30.3%) of senior managers who reported directly to a
member of the GEB were female employees.
Our workforce
inclusion strategy
is reinforced
by our
public commitments
to support
all employees,
including, but
not
limited to, the UN Women’s Empowerment Principles,
the Valuable 500 and the Race
at Work Charter (UK). Of particular
note
is
our
commitment
to
the
Valuable
500,
a
global
business
collective
of
CEOs
and
their
companies
focused
on
advancing
disability
inclusion
that
we
have
partnered
with
since
2021.
Disability-focused
initiatives
in
2024
included
making
improvements
to our
recruitment
processes
for
candidates,
sponsoring
disability-focused
employee
networks,
enhancing training and
awareness efforts for
all employees, and
continuing to increase
physical and digital
accessibility
for employees and clients alike.
›
Refer to the Supplement to this report, available at
ubs.com/sustainability-reporting
, for more information about our workforce
1
Credit Suisse data reflects only Swiss absences.
Sustainability Report 2024
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66
Hire
We aim to hire
the best people for
the right roles with
meritocracy at the
forefront of any
decision we make, to
deliver
for our clients,
our businesses, our
shareholders and
the communities
we serve.
We offer
a wide range
of programs to
attract a diverse talent slate. Our junior talent programs, such as our apprenticeship programs in Switzerland and the UK
and
our
global
internship
program,
prepare
young
talent
for
successful
careers
with
us.
Our
UBS
Career
Comeback
program supports candidates on career
breaks who want to re-enter the corporate
world.
›
Refer to the Supplement to this report, available at
ubs.com/sustainability-reporting
, for more information about our workforce
Develop
We
provide
employees
the
visibility
and
opportunities
to
enable
successful
and
thriving
careers.
Mentorship
and
sponsorship, embedded in
(and supplemental to) talent
development programs
help ensure employees
have a range
of
development
opportunities.
Through
a
mix
of
online
and
in-person
training,
self-directed
learning
and
coaching,
we
further support our employees’ career journeys and aspirations. For example,
in 2024, our Growth Alignment Experience
for Associate Director-
and Director-level employees in the US doubled in size
to 100 participants, who had applied to be
part of the program. Over a six-month period, participants worked with external
coaching professionals to enhance their
strategic
planning
skills,
expand
their
networks
and
build
connections.
Employees
in
the
UK
and
Switzerland
at
the
Authorized Officer,
Associate Director
and Director
levels were
offered
programs including
Not in
Your
Image, a
nine-
month career development program for building
skills and leadership readiness.
In the
US, we
work with
the Executive
Leadership Council’s
Institute for
Leadership Development
and Research,
along
with organizations like the Hispanic Association on Corporate Responsibility,
to support leadership-development-focused
opportunities across our workforce,
facilitating individual growth that in turn builds our talent
pipeline.
Belong
A sense of
belonging helps
drive engagement
and is important
for overall
well-being. Inclusive
leadership and
fair and
transparent policies and practices provide organizational support for
belonging, and vital to these efforts are our various
employee network chapters
across the firm
that connect employees
on a variety
of employee-led topics. Our
networks,
which are open to
all employees, also supplement
members’ awareness, development
and support through
mentoring,
reverse mentoring and allyship programs.
›
Refer to
ubs.com/inclusion,
for additional information about inclusion topics
and status
›
Refer to
ubs.com/employees
or
ubs.com/careers,
for more topics of interest to employees and potential
applicants
Sustainability Report 2024
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67
Driving social impact
We aim
to support
the transition to
an economy
that considers
the well-being
of people
and planet.
Through the
UBS
Optimus network
of foundations
(the UBS
Optimus Foundation),
which is an
independent network,
and in
partnership
with
philanthropists,
employees,
implementation
organizations
and
institutional
partners,
we
want
to
find
innovative
ways to drive systemic and catalytic impact
for marginalized communities at scale, both globally and
locally, especially for
children and young people. In 2021, we set a goal of mobilizing USD 1bn in
philanthropic capital (which was reached in
2024) and reaching more than 26.5 million people by the
end of 2025 (cumulative total since 2021).
We know
working together
is key
to achieving
this impact
and systemic
change. That
is why,
in addition
to providing
insights, advice
and execution
services to
clients and
prospective clients,
we have
increased our
efforts in
the areas
of
blended
finance,
collaborative
philanthropy
and
impact
transparency.
1
In
blended
finance,
we
have
facilitated
opportunities and
partnerships
in innovative
financing structures
leveraging public
and private
capital. In
collaborative
philanthropy, we
have brought
together clients
and partners
on joint
initiatives addressing global
issues, such
as improving
the quality of primary school education
in Ghana and Colombia. Additionally,
our new impact rating tool,
introduced in
2024, simplifies
assessment
of impact
across projects,
sectors
and solutions,
aligning
with established
methodologies,
such as the Impact Management Project’s dimensions of
impact.
Our clients and partners are invited to be part of our impact ecosystem by supporting various initiatives and approaches.
Blended finance
The
UBS
Optimus
Foundation
partners
with
clients,
governments,
development
finance
institutions
and
our
business
divisions to promote
and launch blended
finance initiatives that use
catalytic capital from
public and philanthropic
sources
to increase private-sector investment in sustainable development.
UBS Collectives
Our
three
UBS
Collectives
bring
philanthropists
together
to
co-fund
programs,
share
knowledge
and
join
a
unique
learning journey. This
includes insight trips,
where the philanthropists
work and exchange
knowledge with experts
and
experience the impact on the ground.
The
UBS Collectives
were launched in 2020 and focus on issues
central to our strategy: innovative financing of education
and health outcomes (the
UBS Accelerate Collective
), catalyzing the
blue-carbon market (the
UBS Climate Collective
), and
promoting and implementing family-based care (the
UBS Transform Collective
). The first cohorts concluded their journey
at the end of 2024, contributing their time and expertise to
support 23 UBS partners across eight countries.
›
Refer to the UBS Optimus Foundation Annual Review
2023, available at
ubs.com/optimus-foundation/annual-review,
for more
information
UBS Global Visionaries
Through
our UBS
Global Visionaries
program,
we aim
to accelerate
the impact
of social
entrepreneurs
by: (i)
creating
opportunities
for
the
entrepreneurs
to
connect
with
our
clients,
prospective
clients
and
employees;
(ii) increasing
the
entrepreneurs’
abilities
through
learning
and
coaching
programs;
and
(iii) raising
awareness
of
the
entrepreneurs’
endeavors by leveraging our
brand and platforms. Since
the program started in
2016, we have onboarded
and supported
90 entrepreneurs to accelerate their impact.
Helping our clients structure their philanthropy: donor
-advised funds
Donor-advised funds offer clients
an alternative charitable-giving vehicle
to set up
their own foundations, offering
greater
choice and personalization,
and are managed
in line with
their usual investment
approach. UBS
offers these
services in
Switzerland, Singapore, the UK and,
since 2023, the Hong Kong
SAR. In 2024, USD 329m in
donations was received into
these UBS charitable entities (2023: USD 318m).
2,3
The UBS Optimus Foundation
In
2024,
the
UBS
Optimus
Foundation
raised
USD 366m
in
donations
(2023:
USD
328m),
including
UBS
matching
contributions, and committed USD 310m (2023: USD 306m)
in grants from the foundations.
2,4
In
2024,
the
UBS
Optimus
Foundation
celebrated
its
25th
anniversary
by
launching
four
initiatives
5
that
build
on
our
achieved impact and
strategic partnerships. These
initiatives will be
supported by a
USD 25m gift from
UBS that will
be
used to provide matching contributions of up to 100%
6
and seed capital to launch them.
In addition to
mobilizing our clients’
resources to advance
the missions of
our portfolio of
partners, we also
seek to ensure
both
the
firm
and
employees
are
engaged
in
our
Social
Impact
strategy.
We
do
this
mainly
through
charitable
contributions and employee volunteering.
Sustainability Report 2024
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68
Charitable contributions
We have
provided direct
cash contributions
through
our affiliated
foundations
in Switzerland,
through partnerships
in
the communities where we
operate and through contributions
to the UBS Optimus
Foundation. The combined value
of
these contributions in 2024 was USD 74m.
Employee volunteering
We have global
targets for employee
engagement through volunteering,
which are built
from the bottom
up and on
a
best-efforts basis. In
2024, we successfully engaged
32%
of our global
workforce in volunteering (2023:
38%), and 39%
of the 230,258 volunteer hours were skills based (2023:
45% of 199,633 volunteer hours).
7,8
1
Currently, our impact transparency focus is on ensuring that all grants and investments supported by the UBS Optimus Foundation
undergo consistent and transparent diligence, approval, management and reporting
processes, in line with industry standards.
2
Figures provided for
the UBS Optimus
Foundation and
donor-advised funds
are based on
unaudited management accounts
and information available
as of January
2025.
Audited financial statements
for the UBS
Optimus Foundation and donor-advised foundation entities are produced and available
per local market regulatory guideline.
3
2023 figures exclude Credit Suisse.
4
The UBS Optimus Foundation receives donations from all of the business divisions,
with the majority coming from Global Wealth Management.
5
Blue economy, innovative financing in tertiary education, scaling primary education and reaching the last mile for quality health
care.
6
100% up to USD 10,000 and 25% thereafter.
7
2023 figures exclude Credit Suisse-led volunteering programs.
8
Reported employee volunteering hours include volunteering activities completed both during
and outside of working hours. In the
case of hours committed outside of working hours,
in line with Business for Societal
Impact (B4SI) guidelines, these are only counted where volunteering can be attributed to UBS support or encouragement
for the employee to commit their time.
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69
Charitable contributions
UBS’s
overall
charitable
contributions
are
measured
using
the
Business
for
Societal
Impact
(B4SI)
framework
and
are
broken down as follows.
1
Cash
This category
includes direct
cash contributions
from the
firm, including
through partnerships
in the
communities that
we
operate
in, support
given
through
its
affiliated
foundations
in
Switzerland
and
contributions
to
the
UBS
Optimus
network of foundations.
2
Employee time
This is the cost to UBS of
the time that employees spend
on community programs during working
hours. It is calculated
by multiplying the number of volunteer hours during working
hours by the average hourly salary.
In-kind
These are contributions
of products, equipment,
services and other
non-cash items from
UBS to communities,
primarily
the cost of making our premises available to our partner charities
for events.
1
From 2024, all
charitable contributions reporting
has been integrated,
reflecting contributions made
across the UBS Group.
The
2023 and 2022
comparative figures reflect
contributions made across
UBS AG pre-
integration of Credit Suisse.
2
All direct cash contributions
are recognized on a
cash rather than accrual
basis. Separately,
we recognize contributions made
by the UBS Optimus
network of foundations
on an accrual basis,
reflecting committed
grants made in the reporting period. The cash contribution does not include contributions totaling USD 5.8m in 2024
that are required by law (in India and South Africa). This is consistent with B4SI
methodology. Lower
cash contributions in 2023 compared with
2022 were due to the
decision to exclude business-related
contributions, since these are
donations made outside of our
strategic social impact strategy
and do not support
the longer-term impact we are striving to achieve with our strategic grantee and
volunteering partners.
Contributions by type (UBS Group AG consolidated)
1
USD m
2024
2023
2022
Cash contributions
2
73.90
62.58
76.15
Time contributions
23.13
16.64
15.53
In-kind contributions
0.01
0.08
0.06
Total
97.05
79.30
91.74
1
From 2024, all charitable contributions reporting
has been integrated, reflecting contributions
made across the UBS Group.
The
2023 and 2022 comparative figures
reflect contributions made across UBS
AG pre-
integration of Credit Suisse.
2
All direct cash contributions are recognized on a cash rather than accrual basis. Separately, we recognize contributions made by the UBS Optimus network of foundations on an accrual
basis, reflecting committed grants made in the reporting period. The
cash contribution does not include contributions totaling USD 5.8m in 2024 that are required
by law (in India and South Africa). This is consistent
with B4SI methodology. Lower cash contributions in 2023 compared with
2022 were due to the decision to
exclude business-related contributions, since these are donations made outside of our
strategic social impact
strategy and do not support the longer-term impact we are striving to achieve with our strategic
grantee and volunteering partners.
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70
Respecting human rights
UBS is
committed to
respecting and
promoting human
rights, as
set out
in the
UN Guiding
Principles on
Business and
Human Rights.
When assessing
the firm’s
potential
human rights
impacts,
we focus
on three
key stakeholder
groups
(employees, clients and vendors), as well as society at large.
›
Refer to the “General information” section of
this report for more information about our interactions with stakeholders,
including
civil society groups
Employees
:
UBS is committed to
respecting human rights
standards through its
human resources policies
and practices,
and to meeting the
obligations that a
responsible company is required
to comply with.
These are reviewed
on a regular
basis in an effort to make sure we continue to respect human
and labor rights.
›
Refer to the “People and culture make the difference” section
above and to “Key policies and practices”
in the appendix to this
report for more information about UBS’s human resources policies and practices
Clients
:
UBS aims to provide
its clients with innovative
investment solutions on
themes related to
human rights, such as
health, education, gender and / or equality. In
addition, we take human rights risks into account in
solutions that address
a broader range of
sustainability issues. We
identify and manage
actual and potential adverse
impacts on human rights
to which
our clients’
assets
and our
own assets
are exposed,
most notably
through
our sustainability
and climate
risk
policy
framework
(including
human
rights).
Our
clients
also
have
access
to
solutions
that
help
them
to
realize
their
philanthropy goals, including those related to human rights.
›
Refer to the “Strategy”
section of this report for more details about our sustainability and
impact strategy, key aspirations and
progress
›
Refer to the Supplement to this report, available at
ubs.com/sustainability-reporting
, for more information about the
“Sustainability and climate risk policy framework”, including
SCR assessments undertaken in 2024 (including
human rights-
related)
›
Refer to the “Driving social impact” section of
this report for more details about our approach to philanthropy
services
Vendors
:
UBS is committed to reducing the negative societal impacts of the goods and services it purchases. That is why,
when we
are establishing
new contracts
or renewals,
we identify
high-impact vendors
based on
whether they
provide
goods and services that either have a
substantial social impact or are sourced
in markets with potentially high social risks.
Vendors that
do not
meet the
minimum applicable standard,
because they are
associated with actual
and potential
human
rights risks, have to agree to and comply with a remediation
plan before signing a contract with us.
›
Refer to the “Responsible Supply Chain Standard“ and
the “UBS Supplier Code of Conduct” for
more details about our responsible
supply chain management and assessments, available
at
ubs.com/sustainability-reporting
, for more information
UBS’s human-rights-related
commitments and
actions are
set out
in the
UBS Human
Rights Statement.
The statement
shows the structures (governance and policies) and
mechanisms (procedures and processes) UBS has in
place to support
its
commitments.
UBS
also
publishes
a
Modern
Slavery
and
Human
Trafficking
Statement
pursuant
to
the
UK
2015
Modern Slavery Act and to the Australian 2018 Modern
Slavery Act.
›
Refer to the UBS Human Rights Statement and the
UBS Modern Slavery and Human Trafficking Statement, available at
ubs.com/sustainability-reporting, for more information
›
Refer to the Supplement to this report, available at
ubs.com/sustainability-reporting
, for more information about “UBS Group’s
approach to the Swiss Ordinance on Due Diligence and
Transparency in relation to Minerals and Metals from Conflict-Affected
Areas and Child Labor”
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71
Cyber and information security
At UBS,
the
security
of our
clients’
assets
and
data
is
one
of our
top
priorities.
As cyber
threats
to systems
and
data
increase in volume and
sophistication, we continually
focus resources and investments
on critical cyber and
information
security capabilities, with specialist teams working to safeguard our clients’
assets and data.
Our principles and policies guide
how we develop and deploy
technological solutions. The cyber and information security
(CIS) program is
designed to identify,
prevent, detect and
respond to CIS
events, with the
goal of maintaining
the integrity
and availability of our technology infrastructure. Appropriate
technical and organizational measures are implemented
to
ensure that data remains
confidential and protected
against accidental, unauthorized
or unlawful destruction, and
loss,
alteration, disclosure or access.
Additionally, UBS has
a Group-wide incident
response process designed
to detect, investigate,
and respond
to information
security threats and incidents
that have a potential
impact on UBS systems
and data. This process enables
any UBS person
to report
incidents and
data breaches,
and it
also includes
processes such
as notifying
impacted clients
about
relevant
incidents, in line with all applicable laws and regulations.
In 2024,
we have
enhanced the
CIS awareness
and education
program for
all UBS
employees and
external workforce,
including an increase in staff testing, refreshed mandatory training, including for highly privileged users, and a firm-wide
Cyber Awareness Month campaign.
›
Refer to the “Cyber and information security”
section of UBS Group Annual Report 2024, available
under “Annual reporting” at
ubs.com/investors,
for more information
Helping clients stay cybersafe
UBS
invests
in
critical
cyber
and
information
security
capabilities
to
protect
clients'
assets
and
data
and
provides
cybersafety tips through its website and mobile applications.
›
Refer to Cyber Security at UBS for more information,
available at
ubs.com/global/en/our-firm/cybersafe.html
, and to
Cybersecurity, information security and data privacy at UBS, available at
ubs.com/global/en/sustainability-impact/sustainability-
reporting.html
Sustainability Report 2024
| Supporting opportunities
72
Supporting opportunities
Our sustainable finance ambitions
Finance has
an important
role to
play as
companies and
individuals consider
how best
to approach
the transition
to a
more sustainable, lower-carbon
world. Banks and
investment managers
can support this
transition by
allocating capital
effectively and efficiently and helping to mobilize the
vast amounts of investment and financing required. In
addition, we
are committed to
supporting our clients’
sustainability ambitions, whether their
focus is on
reducing the carbon
emissions
footprint of their businesses or portfolios or on encouraging a
fairer and more prosperous society.
We provide
a broad
range of
sustainability and
impact products
and services
across our
core business
areas, targeting
four key objectives in serving our clients:
–
The power of choice:
we want to give
our investing clients
the choices they
need to meet
their specific sustainability
objectives.
–
An
orderly
transition:
we
aim
to
support
our
clients
through
the
world’s
transition
to
a
low-carbon
economy,
for
instance, by offering innovative sustainable financing and
investment solutions.
–
Managing risks
and identifying
opportunities: we
offer research
and thematic
insights, as
well as
data and
analytics
services. Combined with targeted
advice, these are designed to
help clients better understand
and mitigate risks and
identify new opportunities.
–
Making
sustainable
finance
an
everyday
topic:
we
want
to
make
sustainability
topics
tangible
throughout
our
interactions with clients. To help us do that, we provide support
in the form of tools, platforms and education.
Assessing sustainable finance opportunities
The regulatory environment continues to evolve, and so do the associated business and investment opportunities for our
clients, as well as for us. As part
of the UBS Group sustainability and impact annual strategic review and objective setting
process, our business
opportunities are assessed
on a Group
and divisional level
and also through
a topical lens
(e.g. in
thematic priority areas, such as climate, nature or impact).
Furthermore, since 2021
we have performed
a dedicated
climate opportunities materiality
assessment on an
annual basis,
looking at financial and impact materiality related
to our firm-wide climate-related product and
services offering. In order
to ensure that climate aspects are reflected in
our forward-looking business strategy, business divisions formulate specific
commercial objectives for climate during the objective-setting process.
›
Refer to “Supporting our approach to climate – climate-related
materiality assessment”
in the “Environment” section of this
report for a description and results of the climate opportunities
materiality assessment
Our approach to sustainable finance
It is important
to set out
how we define
sustainable finance,
as no uniformly
accepted definition
currently exists
in the
financial industry.
In accordance
with our
ambitions, our
sustainable finance
product offering
is organized
across three
key areas:
–
Investing
: sustainable investing solutions for private and institutional
investors;
–
Financing
: sustainable financing solutions for real estate and corporate
purposes;
and
–
Research, advisory,
data, platforms
and client
interactions
: solutions
guiding our
clients on
their sustainability
objectives, such as sustainability-related analytics, scoring, reporting, tools and client support through our interactions
with them.
Sustainable investing
Our approach to
sustainable investing is
defined in our
Group Sustainable Investing
Policy.
For us, sustainable
investing
includes any product or service with
an underlying investment strategy that, in
addition to targeting market-rate financial
returns, aims to explicitly:
i) align with one or more specific sustainability-related objectives;
or
ii) contribute to achieving one or more specific sustainability
-related objectives,
while also considering
corporate governance
factors (e.g. sound management
structures, remuneration of
staff and tax
compliance) and potential adverse impacts on broader sustainability,
where relevant.
Our sustainable investing approaches are “Sustainability focus” and “Impact investing”. These categories,
as they stand,
are part of our global sustainable investing framework,
which is not tailored to or defined by
any specific local regulatory
requirements or definitions. Specifically, the “Sustainability focus” approach refers only to our framework definition, and
not to existing regulations.
Sustainability Report 2024
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73
The way that we define sustainable investing is being review
ed to ensure that it appropriately considers evolving
market
practice, client expectations and relevant regulatory guidance. For
an investment product or service to
be considered part
of our
sustainable
investing
offering,
the
explicit
alignment
with or
contribution
to
one
or more
sustainability-related
objectives must
be demonstrated
within the underlying
investment strategy.
Strategies focused
only on the
integration
of
sustainability
risks
and
/
or
exclusions
and
/
or
active
ownership,
without
a
contribution
to
sustainability-related
objectives, would not qualify as sustainable investing for
us.
Our investing approaches can be summarized as follows:
Traditional investing
Sustainable investing
Sustainability focus
Impact investing
–
Targets market-rate investment returns
–
No explicit sustainability objectives
–
Manages sustainability and all risks related to
investment performance
–
May use sustainability-related tools, but these do
not drive the strategy
–
Targets market-rate investment returns
–
Has explicit sustainable intentions or
objectives that drive the strategy
–
Underlying investments may contribute to
positive sustainability outcomes through
products, services and / or proceeds
–
Targets market-rate investment returns
–
Has explicit intentions to generate
measurable, verifiable, positive sustainability
outcomes
–
Impact attributable to investor action and /
or contribution
›
Refer to the Supplement to this report, available at
ubs.com/sustainability-reporting
, for more information about ESG integration
and exclusion
The legacy
Credit Suisse
sustainable
investment
framework
1
(the SIF)
continues to
be in
operational
use for
portfolios
that have
not been
fully onboarded to
the UBS
product shelf.
This framework
will be
phased out over
time and
in line
with integration
progress, without
any bearing
on our established
sustainable investing
approach and
governance. We
no longer report Group-level invested assets information
associated with the SIF, as the migration is ongoing.
Sustainable financing
Our
sustainable
financing
instruments
are
governed
by
our
Sustainable
Finance
Guideline,
which
is
part
of
the
sustainability and climate risk
policy framework. The guideline
defines criteria for labeled financing
instruments (e.g. for
marketing or promotion
purposes).
The main financing instruments we offer to our clients include green,
sustainable, sustainability-linked and social bonds.
All are
subject
to specific
criteria,
aligned to
commonly
used industry
and market
standards (e.g.
those
issued
by
the
International
Capital Market
Association
(ICMA),
the Loan
Market
Association
(LMA), the
Loan Syndication
&
Trading
Association (LSTA), the Asia Pacific Loan Market Association
(APLMA)) and regulatory requirements such as the EU Green
Bond Standard (EuGB).
›
Refer to “Key terms and definitions” in the “Appendix
3 - Other supplemental information” section of
this report and to the
“Sustainability and climate risk policy framework“ section
of the Supplement to the UBS Group Sustainability
Report 2024,
available at
ubs.com/sustainability-reporting
, for our definitions of sustainable bonds and
loans
Meeting diverse needs
We serve a
broad range of
clients across our
four main business
divisions. The
table below provides
an illustrative overview
of sustainable finance products and services offered to clients by each of those divisions. While a
good illustration of the
breadth of products and services available to clients across UBS’s business
activities, it is not an exhaustive representation
of our sustainable finance and investing
offering, which varies by jurisdiction,
booking center and client domicile,
and is
also subject to client eligibility and preference considerations. Not all products and services are available to all clients and
/ or in all regions.
1
The SIF was established in 2020 and is utilized to classify investment solutions in an effort to seek consistency and set minimum
standards across different asset classes, locations and regulatory regimes.
Classification can also help match clients’ interests with relevant investment solutions. The
SIF classification does not supersede any regulatory commitment, nor does it determine or indicate whether an investment
solution will be labeled as “sustainable” (or any other such term) under any given regulatory regime.
The SIF focuses on:
Exclusion: positions assessed not to be significantly involved in controversial business fields or incidents;
Integration: positions assessed to be integrating ESG into their strategy;
Thematic: positions assessed to be in alignment with specific United Nations Sustainable Development Goals (the SDGs); and
Impact: positions assessed to be explicitly and intentionally contributing toward specific SDGs.
Sustainability Report 2024
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74
A sustainable finance offering for all our clients
Investing
Financing
Research, advisory, data analytics,
platforms and other services
Global Wealth Management
–
Sustainable discretionary mandates
–
Sustainable modules for traditional
discretionary mandates
–
Sustainable investing solutions for
advisory mandates
–
Sustainable separately managed
accounts (SMA)
1
–
Sustainable public market investment
funds (actively managed and
indexed)
–
Sustainable private market funds
(including infrastructure and real
estate)
–
Sustainable hedge funds
–
Sustainable structured products
–
Direct investments in sustainable
equities and bonds
–
Real-estate-related
financing
2
–
Sustainable investing research and
thought leadership
–
Sustainability reporting
–
Philanthropy solutions
–
Renovation journey, tools,
partnerships and ecosystems
2
Personal & Corporate
–
Sustainable discretionary mandates
–
Sustainable modules for traditional
discretionary mandates
–
Sustainable public market investment
funds (actively / passively managed)
–
Sustainable private market funds
(including infrastructure and real
estate)
–
Real-estate-related financing
–
Green, social, sustainability
and sustainability-linked
bonds
–
Sustainability-linked loans
–
Sustainable deposits solution
–
Carbon footprint sizing
–
Renovation journey, tools,
partnerships and ecosystems
–
Sustainability reporting and analysis
–
Sustainability research and thought
leadership
–
Philanthropy solutions
Investment Bank
–
Thematic sustainability-related
products (e.g. carbon, climate)
–
Green, social, sustainability
and sustainability-linked
bonds
–
Green, social, sustainability
and sustainability-linked
loans
–
ESG advisory
–
ESG research
Asset Management
–
Sustainable separately managed
accounts (SMA)
1
–
UBS sustainable public market funds
(actively managed and indexed)
–
UBS sustainable private market funds
(including infrastructure and real
estate)
–
UBS sustainable hedge funds
–
Sustainable mandate solutions
(actively managed and indexed)
–
Sustainability thought leadership
–
Sustainability analytics and reporting
for clients (standardized and
customized)
Disclaimer: Sustainable offering varies by jurisdiction, booking center and client domicile and is subject to client eligibility and preferences.
Not all products and services are available to all clients.
1
Clients booked in the US.
2
Clients booked in Switzerland.
›
Refer to the “Basis of preparation”
section of the Supplement to the UBS Group Sustainability
Report 2024, available at
ubs.com/sustainability-reporting
, for details on products that are included in sustainable product
metrics
Developments in 2024
–
Our total sustainable investing invested assets reached USD
296bn, representing an increase of 5% year on year.
1
–
The sustainable investing portion of our total invested assets
was 4.9%
(2023: 6.3%).
2
–
In the Investment Bank, we facilitated
96 green, social, sustainability or sustainability-linked
(GSSS) bond transactions
globally (2023: 102).
3
–
We are the second
-largest manager of
open-ended funds and
exchange-traded funds (ETFs)
by sustainable investing
invested assets, using Morningstar’s classification.
1
Figures do not include invested assets classified under the Credit Suisse SIF but include invested assets
of Credit Suisse portfolios, which have been migrated
onto UBS platforms and vetted against UBS’s sustainable
investing policies or merged with existing UBS sustainable investing portfolios. This process
is being carried out in waves and will continue until at least the end of 2025.
2
In line with the progressing integration,
for 2024 we report the share
of sustainable investing assets as
a percentage of UBS Group total
invested assets. For
2023, we report the sustainable investing
proportion of
UBS AG total invested assets, excluding any invested assets booked by and for
Credit Suisse AG.
3
These metrics
include transactions
meeting the
UBS Sustainable
Finance Guideline,
as described
in the
”Sustainability and
climate risk
policy framework“
section of
the Supplement
to this
report, available
at
ubs.com/sustainability-reporting.
Sustainability Report 2024
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75
Sustainable investing
Sustainability-oriented
public
market
funds
recorded
a
new
high
of
USD 3.2trn
1
as
of
the
end
of
December
2024,
supported by
strong market
performance in
the third
quarter.
Europe remains
by far
the largest
market, with
an 84%
market
share.
European
investors
also
continued
to
allocate
the
most
into
sustainability-oriented
funds
and
ETFs,
although
the
volume
of
inflows
decelerated
compared
to
previous
years.
Higher
interest
rates
continued
to
drive
allocations into global
fixed income and
money market investments in
2024, supporting demand
for sustainable investing
fixed income funds, which attracted the majority of sustainable
investing inflows last year.
2
While sustainability-oriented funds and ETFs
continued to attract net inflows
in 2024, they were
outpaced by inflows into
traditional products
for the
first time
since 2021.
In our
view, this
was largely
driven by
the relatively
small number
of
available sustainable
fixed income
products as
compared to
equity products
specifically for
private and
retail investors.
Ongoing developments in terms of
sustainable investment product regulations
and classifications led to
continued fund
renaming
and
reclassifications
in
the
industry,
further
blurring
the
line
between
sustainability-oriented
and
traditional
investment products
offered in
the market
and allocated
by investors.
Furthermore,
in recent
years, some
jurisdictions
have developed
rules restricting
the consideration
of sustainability
factors in
investment and
business decisions.
Under
these
anti-ESG
rules,
companies
that
are
perceived
as
boycotting
or
discriminating
against
certain
industries
may
be
restricted
from
doing
business
with
certain
governmental
entities.
Sustainability-oriented
investments
are
and
will
continue to be adversely affected by these existing and
upcoming rules.
In
addition
to
public
market
funds,
sustainable
investments
into
alternative
asset
classes,
including
hedge
funds,
real
estate
or
infrastructure,
continued
with
strong
momentum
throughout
the
year.
According
to
Preqin,
3
the
share
of
sustainable investing products
in private market
fundraising reached an
all-time high of
21% in 2024, through
the end
of April.
Sustainability
remains
a
key
consideration
for
our
clients.
According
to
the
2024
UBS
Billionaire
Ambitions
Report,
4
representing opinions
from billionaires
with a combined
wealth of USD
14trn, the percentage
of respondents investing
for impact has more than doubled over the past 10 years,
rising from 13% to 28%.
In addition to investing considerations, our clients are increasingly incorporating
sustainability aspects from an operating
business perspective. Investors and companies are
acutely aware that sustainability in general and
topics such as climate
and nature have real-world
impacts on their
financial performance (e.g. the availability
of natural resources such
as water,
physical climate risks
or supply chain
resilience) and are
actively looking to
address these
topics. According to
the 2024
UBS Global
Family Office
report,
5
more than
half (57%)
of family
offices with
an operating
business are
either already
taking sustainability
considerations into
account or
planning to
do so
in the
future. Echoing
this, almost
half (49%)
of
respondents say that
finding the right
approach to addressing
the net-zero
transition and reducing
emissions will be
of
key importance to their operating businesses over the next
one to three years.
Over the course
of 2024,
our sustainable investing
invested assets rose
to USD 296bn
as of 31
December 2024, compared
with USD
282bn at
the end
of 2023,
representing a
year-on-year increase
of 5%.
The positive
growth benefited
from
market performance
and Credit
Suisse integration-related
impacts, partially
offset by
foreign exchange
effects and
net
new money
outflows. Sustainable
investing invested
assets accounted
for 4.9%
of UBS
Group total
invested assets
at
year-end 2024.
The table below provides additional detail on sustainable investing
invested assets for UBS.
Sustainable investments
1
For the year ended
% change from
USD bn, except where indicated
31.12.24
31.12.23
31.12.22
31.12.23
UBS Group invested assets
6,086.8
5,714.1
3,980.9
7
Sustainable investing invested assets
2,3,4,5
Sustainability focus
276.1
259.8
234.0
6
Impact investing
20.3
21.8
19.2
(7)
Sustainable investing invested assets
296.4
281.6
253.2
5
Sustainable investing proportion of UBS Group invested assets (%)
6
4.9
6.3
6.4
1
The table above
details UBS Group’s
sustainable investing invested
assets and the
evolution thereof.
This table does
not contain invested
assets classified under
the Credit Suisse
SIF.
UBS sustainable investing
invested assets contain invested assets of Credit Suisse portfolios which have been migrated onto UBS platforms and vetted against UBS’s
sustainable investing policies or merged with existing UBS SI portfolios. This
process is being
carried out in
waves and will
continue until at least
the end of 2025.
The Credit Suisse
integration-related impact to
sustainable investing invested
assets in 2024
was approximately USD
9bn, of
which USD 8.2bn in Asset Management and USD 0.7bn in Global Wealth
Management.
2
For additional detail on UBS's sustainable investment definition
and categories, see section “Our approach to sustainable
finance” above.
3
Certain products have been reclassified during 2024 for reasons including, but not limited to, an evolving regulatory environment, periodic monitoring of the product shelf, and developing internal
classification standards. The impact of these
reclassifications on sustainable investing invested
assets was immaterial in 2024.
4
Invested assets reported as
sustainable investing include limited amounts
of instruments
not classified as sustainable
investments. This includes cash and cash-like instruments
that each fund and
portfolio holds for liquidity
management purposes, as well as
client-directed investments included in sustainable
investing mandates managed
by UBS Asset
Management.
5
2024 figures exclude
USD 13.2bn of
invested assets relating
to Global Wealth
Management’s US
business that are
undergoing additional validation
procedures to ensure alignment with internal UBS frameworks and standards. Prior periods have been restated to exclude USD 10.6bn and USD 12.9bn as of 31 December 2023 and 31 December 2022, respectively.
6
In line with the progressing integration, for 2024 we report the share of sustainable investing assets as a percentage of UBS Group total invested
assets. For 2023, we report the sustainable investing proportion of
UBS AG total invested assets, excluding any invested assets booked by and for
Credit Suisse AG.
1
Morningstar. Figures as published by Morningstar using their Sustainable Investing framework
and definitions.
2
Morningstar, Global Sustainable Fund Flows: Q3 2024 in Review.
3
Preqin, ESG in Alternatives 2024.
4
UBS, Billionaire Ambitions report 2024.
5
UBS, Global Family Office report 2024.
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Sustainable financing
In sustainable
financing
markets, global
thematic sustainable
bond markets
(comprising
green,
social, sustainable
and
sustainability-linked bonds,
jointly referred
to as
labeled bonds)
saw issuance
volumes increase
by 16%
1
year on
year,
nearly reaching the
record level achieved
in 2021,
which at
the time
strongly benefited from
COVID-related supply factors.
Sovereign, Supranational
and Agency
(SSA) issuers
remain the
largest source
of labeled
bond issuance,
accounting for
38% of supply in
- Green bond
issuance continues to
dominate with a 12%
year-on-year increase,
accounting for
58% of total labeled bonds priced in 2024.
The number of bond transactions facilitated by UBS Investment
Bank in 2024 remained strong at 96 (2023: 102).
2
Labelled transactions facilitated by UBS
1
For the year ended
% change from
USD bn, except where indicated
31.12.24
31.12.23
31.12.22
31.12.23
Total labelled transactions
Number of green, social, sustainability, and sustainability-linked (GSSS) bond deals
96
102
77
(6)
Total deal value of green, social, sustainability, and sustainability-linked (GSSS) bond deals
56.0
53.7
47.6
4
UBS-apportioned deal value of above
12.4
12.8
9.8
(3)
of which climate-related transactions
Number of green, sustainability and sustainability-linked bond deals
85
93
69
(9)
Total deal value of green, sustainability and sustainability-linked bond deals
48.1
49.3
42.4
(2)
UBS-apportioned deal value of above
11.2
11.6
8.8
(3)
1
These metrics
include transactions
meeting the
UBS Sustainable
Finance Guideline,
as described
in the
”Sustainability and
climate risk
policy framework“
section of
the Supplement
to this
report, available
at
ubs.com/sustainability-reporting. For 2023 figures, UBS performed an assessment for Credit Suisse green, social, sustainability and sustainability-linked bonds and in the UBS Sustainability Report 2023 included those
deemed to be aligned to UBS sustainable bond guidelines.
1
Bloomberg (all values in this paragraph).
2
These metrics
include transactions
meeting the
UBS Sustainable
Finance Guideline,
as described
in the
”Sustainability and
climate risk
policy framework“
section of
the Supplement
to this
report, available
at
ubs.com/sustainability-reporting.
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77
Global Wealth Management
Building on our unrivaled global scale and
footprint in wealth management, with
invested assets exceeding USD 4.1trn,
we aim to help private clients and family offices achieve their
sustainability objectives in line with their targeted financial
performance.
We
do
this
via
an
end-to-end
research-driven
investment
value
chain.
The
starting
point
is
dedicated
sustainability-focused investment research,
including strategic asset
allocation, thematic and
asset-class views, which
then
translates
into high-conviction instrument selection and advice.
This approach aims to
provide insights for clients
about sustainability risks and
opportunities and how
to consider them
within a
portfolio
context.
These research
views
inform
our sustainable
and
impact investing
solutions, which
include
multi-asset investment portfolios and a suite of advisory options across
equities, bonds and alternative investments.
Integration of Credit Suisse
The
acquisition
of
the
Credit
Suisse
Group
offers
Global
Wealth
Management
several
opportunities
to
enhance
our
existing
sustainable
investing
offering
with
potentially
complementary
capabilities
and
resources.
These
opportunities
include tools
designed
to enhance
transparency
and reporting
on
the
sustainability
characteristics
of investments
and
portfolios,
and
bringing
selected
Credit
Suisse
sustainable
and
impact
investing
solutions
onto
the
merged
platform.
These solutions will
be subject
to existing Global
Wealth Management
sustainable investing frameworks,
diligence and
instrument selection
approaches. Deviations
in these approaches
were identified
in 2023,
with findings
integrated into
the
migration
throughout
2024
and
going
into
2025.
We
will
phase
out
dual
governance
during
the
migration
of
solutions, clients and
assets, with the
aim of aligning
under the existing
Global Wealth Management sustainable
investing
governance.
2024 highlights
–
Our clients’ impact investing assets reached USD 10.5bn
(2023: USD 11.2bn).
1
–
Our clients’ discretionary assets
aligned to a
sustainable investing strategic asset
allocation reached USD 20.6bn (2023:
USD 21.8bn).
2
Delivering actionable investment insights
The
Global
Wealth
Management
Chief
Investment
Office
(CIO)
identifies
actionable
sustainability-related
investment
opportunities,
including
strategies
across
real
assets
(renewables
infrastructure),
shareholder
engagement,
carbon
markets,
sustainable
bonds
and
thematic
areas
such
as
the
blue
economy,
the
energy
transition(s)
and
artificial
intelligence (AI).
We publish
a regular
series of sustainable
investment views,
including a monthly
Sustainable Investing
Perspectives
series
and
longer-term-focused
quarterly
Sustainable
InSights
and
Sustainable
Investing
in
Charts
publications.
Furthermore, we extensively addressed implications
for sustainable investing stemming from
the elections that took
place
in 2024, including in the EU and the US, and
from international debates, including UN
Climate Week 2024, COP29 and
COP16. We
also enhanced
the methodology
underpinning the
CIO Sustainability
Scores for
issuers, which
now covers
approximately 13,000
issuers, informs
our investment
process within
specific strategies
and enables
issuer-, fund-,
and
portfolio-level transparency to be delivered
to clients by addressing controversies and their materiality
across industries.
The underlying sustainable investing research views
are integrated into the CIO House
View and are accompanied, where
relevant, by media such as videos or podcasts to facilitate
client reach and accessibility.
Building sustainable portfolios
Our flagship cross-asset
sustainable investing portfolio –
based on our CIO bespoke
sustainable investing strategic
asset
allocation (SI SAA)
– continued to deliver
competitive financial performance.
This was supported
by allocations to
high-
quality bonds
across
the multilateral
development bank
and thematic
sustainable fixed
income strategies,
and by
ESG
leader equities. We
also introduced
a dedicated
tactical allocation
to investments
linked to AI
as part of
our thesis that
AI is a key enabler for sustainable solutions.
Changes in our
clients’ sustainable investing invested
assets reflect private investors’
broad concerns
about capital market
performance
outside
of
the
US
technology
sector
and
the
slower-than-expected
interest
rate
cuts,
which
are
yet
to
positively impact small- and medium-sized
companies. The latter represent
a meaningful share of sustainable
portfolios.
In addition, the change in
our clients’ impact investing assets reflect the
return of capital to investors
in our earlier private
market impact investing solutions, which have now started
to mature.
1
Figures do not include invested
assets classified under the
Credit Suisse SIF but
include invested assets
of Credit Suisse portfolios
that have been migrated
onto UBS platforms and
vetted against UBS’s
sustainable
investing policies or merged with existing UBS sustainable investing portfolios.
This process is being carried out in waves and
will continue until at least the end of 2025. The impact
on the 2024 changes is negligible.
Figures include limited amounts of instruments not classified as sustainable investment, including cash and cash-like instruments
that each portfolio holds for liquidity management purposes.
2
Figures include some Credit Suisse discretionary
mandates that are managed according to
the sustainable investing SAA and
are included in the UBS
Global Product Catalogue (GPC) while
still being booked in
the
Credit Suisse systems. The
amount attributed to these products in
2024 was USD 1.7bn. 2024 figures
exclude USD 0.6bn of invested assets
relating to Global Wealth Management’s
US business that are undergoing
additional validation procedures to ensure alignment with internal
UBS frameworks and standards. Year
-end 2023 values have been restated to exclude USD 0.7bn.
Figures include limited amounts of instruments not
classified as
sustainable investment,
including cash
and cash-like
instruments that
each portfolio
holds for
liquidity management
purposes, as
well as
client-directed investments
included in
sustainable investing
mandates.
Sustainability Report 2024
| Supporting opportunities
78
Providing investment solutions for climate, nature and social challenges
In 2024, Global Wealth Management continued to increase the number of investment
solutions across asset classes and
strategies to support clients’ decarbonization objectives. Included among the
new climate solutions we launched were a
multi-thematic climate-change-focused equity module
and the Macquarie Energy Transition
Infrastructure Fund,
a clean
energy infrastructure solution. We also continued our credit research
coverage of individual green bonds, expanding the
available universe
for clients
who prefer
direct investments
to fund
solutions. These
complement our
existing solutions
offering and investment tools that allow for building customized and
bespoke allocations. Examples include using water
consumption and
pollution and
waste data
to address
nature-related
risks and
opportunities
in single
stock and
bond
portfolios.
We
continue to
explore
ways
to develop
nature-related
products
and solutions
in
our wealth
and asset
management
businesses.
In
2024,
we
launched
the
UBS
Rockefeller
Ocean
Engagement
Fund
in
a
collaborative
approach
with
Rockefeller Asset Management. It
seeks to provide financial
returns and positive impact
by engaging with
companies that
address ocean health
issues. This complements our
existing strategies that focus
on nature drivers, such
as the UBS
Future
of Earth fund.
Within social investments, we continued to
raise capital for the UBS
Gender Equality ETF, which builds on
our partnership
with index provider Solactive and expert data
provider Equileap. In addition, in 2024
our clients in the Americas had the
opportunity
to
invest
in
early-stage
education
technologies
and
affordable
housing,
alongside
other
impact
investing
solutions. This
complements our
advancement in
social investing,
where we
previously raised
USD 1bn of
client assets
toward
oncology
research.
In
2024,
we
saw
some of
these
innovative
therapies
advance
in their
stages
of regulatory
approval, leading to potentially broader applications in the
future.
Educating our clients and their advisors
An important part of
the advice we provide is
supporting our clients, prospective clients and
advisors with timely research
and education on sustainable investing.
Given the rapidly evolving environment around
sustainability and investments, it is crucial
for advisors to stay up to date
on industry trends, regulatory developments and investment ideas. During 2024, we continued to engage with advisors,
for example through the regular
Let’s Talk SI events for
Global Wealth Management product
and client-facing staff. We
have accelerated training programs for our client-facing
staff. For example, approximately 400 of our Asia Pacific
Global
Wealth Management employees have benefited from certified
training from the University of Zurich.
We supplement this
with Lunch and Learn
events to discuss
topical interests, to
ensure sustainable investing
remains relevant even
after the
training.
Our educational work with investors has also
continued to evolve. We conduct dedicated Next Generation and
Emerging
Successors client sessions
on sustainable and
impact investing. Sustainable
investing is also
integrated into many
of our
core flagship
client events,
with a
focus on
actionable
investment ideas.
It is
also featured
in our
Global Family
Office
Forums
and
Philanthropy
Roundtable
events.
In
addition,
in
Asia
Pacific,
we
introduced
a
new
format
of
CIO-driven
investor engagements, in collaboration
where relevant with our
Chief Sustainability Office and
Investment Bank, covering
specific themes
such as
carbon removals
or impact
investing portfolio
construction. In
the US,
we hosted
an event
on
“Standing Up for the
Planet: Conversation with women focused
on solutions to climate change”
in addition to dedicated
discussions
on
“Seeking
alpha:
Integrating
a
Gender-lens
in
Climate
Investing”
(during New
York
Climate
Week)
and
roundtables on affordable housing.
›
Refer
to ubs.com/global/en/wealth-management/sustainable-investing
for more information about Global Wealth Management’s
sustainable investing insights
›
Refer to the UBS Group Annual Report 2024, available
under “Annual reporting” at
ubs.com/investors
for more information about
the overall business and financial profile of Global
Wealth Management as important context for the product
and financial
information provided here
›
Refer to the “Supporting opportunities” section
of this report for more information about the proportion
of sustainable
investment assets as part of our total invested
assets
Sustainability Report 2024
| Supporting opportunities
79
Personal & Corporate Banking
In our home market, we aim to be the most progressive
financial institution when it comes to providing
sustainable and
sustainability-linked financial advice and
solutions. We are
well-positioned to capture transition
finance opportunities and
contribute to the decarbonization ambitions of our clients.
Integration of Credit Suisse
We formally completed
the merger of
UBS Switzerland
AG and Credit
Suisse (Schweiz) AG
on 1 July 2024,
marking an
important milestone.
The merger
of the
Swiss legal
entities facilitated
the ongoing
migration of
clients and
operations
from
Credit
Suisse
platforms
to
UBS
platforms,
following
business
and
client-
and
product-specific
requirements.
The
transfer of Swiss-booked Credit Suisse banking relationships and
products to UBS systems is planned for
2025 and 2026.
We are monitoring the integration
of sustainability-related activities and
products of former Credit
Suisse (Schweiz) AG,
ensuring compliance with the UBS Sustainable Finance
Guideline.
2024 highlights
–
The sustainable investing products share of clients’ investment assets (excluding cash deposits
and savings) in Personal
Banking stood at 43.4% (2023: 46.5%).
1
–
The total on-balance sheet drawn exposure of sustainable
loans granted to corporate and institutional clients booked
on the UBS Switzerland AG platform amounted to USD
2.0bn as of the end of 2024 (excluding mortgages).
2
Private clients
Assisting our clients in meeting their sustainability ambitions remained a focus in 2024. Our clients continued to allocate
to
sustainable
investment
solutions
during
the
year,
facilitated
by
access
to
relevant
product
offerings
such
as
a
sustainable savings account, sustainable investment funds and sustainable pension
solutions via our mobile banking app,
UBS key4. In addition, clients who use UBS key4 banking can
also track the CO
2
footprint of their account transactions.
Corporate and institutional clients
We support companies on three
levels. Firstly,
we integrate sustainability into
strategic client dialogues, taking a
holistic
view
of
a
client’s
business
operations.
This
includes
identifying
key
business
drivers
and
obstacles,
assessing
relevant
regulations and understanding the expectations
of customers, employees, investors and civil society.
Secondly, we provide
practical solutions tailored
specifically to a company’s
needs. Smaller businesses
that have not
yet
addressed sustainability
can benefit
from simple and
cost-effective tools,
such as the
online platform esg2go
or energy
management consulting from EnAW (Energie-Agentur der Wirtschaft – Energy Agency of the Economy). More advanced
companies, which already have anchored sustainability in their corporate strategy and publish a sustainability report, can
leverage sustainable financing options.
Thirdly, we promote partnerships
that extend beyond traditional
banking, such as in
the area of cyber security.
Our
UBS
Marketplace
platform offers
access to
a variety of
services that,
among others,
support companies on
their journey toward
greater sustainability. Additionally,
through sector-specific regional
client roundtables, we
aim to
provide a
platform where
challenges
and
opportunities
related
to
sustainability
can
be
discussed
among
clients
and
best
practices
shared
in
a
targeted manner and facilitated by us.
Introducing sustainability-linked loans for commodity trade
finance and corporate clients
Following the successful
launch of sustainability-linked loans
for multinational corporations in
2023, in 2024
we launched
sustainability-linked loans
(bilateral and syndicated
loans) for commodity
trade finance
and corporate clients
(small and
medium-sized enterprises). We closed several
such transactions. For example, we became
the banking partner of choice
for Retripa,
a leading
Swiss company
specializing in
waste disposal
and recycling,
and we
were appointed
as the
bank
partner
of
choice
by
neustark,
the
ETH
Zurich
university
spin-off
and
start-up
specializing
in
the
petrification
of
atmospheric CO₂ in recycled concrete.
Continuing to support investing needs of institutional clients
Swiss pension funds and insurance companies are aiming to increase their sustainable investments. To
support this goal,
we are offering tailored
sustainable investment solutions made available
by Asset Management. In addition, we
provide
these clients with
innovative reports
that offer extensive
transparency about
their portfolio with
regard to
sustainability
aspects.
1
Products booked on Credit Suisse platforms are not included as
they have not been migrated onto UBS platforms and
vetted against UBS sustainable investing policies or merged with
existing UBS sustainable investing
portfolios.
2
Loans booked on the Credit Suisse platform
are not within the scope of this
metric. As Credit Suisse loans migrate
to the UBS infrastructure, due
diligence against the UBS sustainable product guidelines
framework
will be performed.
Sustainability Report 2024
| Supporting opportunities
80
Swiss real estate
We
further
developed
our
Swiss
real
estate
offering
to
support
clients
who
are
renovating
and
refurbishing
their
properties in a climate
-transition-friendly manner.
Examples are
listed below, including
the launch of new
products and
the creation of new partnerships.
UBS Loan Green
With the
rollout
of
this
new
product,
we
aim
to
support
sustainability
in
investment
and
commercial
properties.
It
is
designed
for
clients
who
are
planning
new
low-energy
constructions
or
energy-efficient
renovations
or
purchasing
energy-efficient
properties.
The
product
provides
tailored
financing
and
expert
advice
and
accepts
various
building
certifications. In addition,
we support our
clients with
a contribution
to the cost
of securing
a building certification
,
up
to a maximum amount of CHF 4,000 per client.
The power of partnerships
In 2024, we started to offer a new Switzerland
-wide advisory solution, UBS Renovation Service,
with Wincasa,
a leading
Swiss
property
service
provider,
to
incentivize
more
sustainable
renovation
of
buildings
in
the
country.
The
solution
supports owners of investment properties throughout an entire renovation project, offering tailored advice, construction
coordination and financing services from a
single source with the focus on safeguarding
the property’s long-term value.
Moreover, through our new partnership
with Norm Technologies AG,
a provider of innovative digital
solutions, we offer
homeowners a digital and
easy-to-use energy analysis
and a concrete
roadmap for sustainable
renovation. In just a
few
steps, clients can order a tailor-made digital energy certificate
by uploading the relevant basic data about their property.
›
Refer to the UBS Group Annual Report 2024, available
under “Annual reporting” at
ubs.com/investors
for more information about
the overall business and financial profile of Personal &
Corporate Banking as important context for the
product and financial
information provided here
›
Refer to the “Supporting opportunities” section
of this report for more information about the proportion
of sustainable
investment assets as part of our total invested
assets
Sustainability Report 2024
| Supporting opportunities
81
Asset Management
With over
20 years
1
of sustainable investing
expertise, we continue
to offer a
range of strategies
and customized solutions
that aim
to deliver
sustainable outcomes
alongside financial
returns. Our
sustainable investing
capabilities cover
active
and passive styles
of investing and
span asset classes.
There is rarely
a one-size-fits-all
solution for clients,
which is why
we incorporate
a variety
of approaches.
These include
active ownership,
impact-
and transition-focused
strategies. We
integrate
data
science
into
our
sustainable
investing
processes
to
drive
innovation
and
create
more
efficient
alpha
opportunities.
Integration of Credit Suisse
Significant progress was
made in 2024 as
part of the
integration of Asset
Management (Credit Suisse).
We continue to
align our governance structures and
policies and are bringing
together our processes and
teams to enhance collaboration
and
leverage
our
combined
strengths.
We
have
successfully
onboarded
the
initial
migration
waves
of
Credit
Suisse
products onto the UBS shelf.
In 2025, we will continue progressing in our integration and with the onboarding of Credit Suisse products into the UBS
portfolio.
Our
focus
remains
on
client
portfolios
in
terms
of
the
delivery
of
sustainability
and
investment
outcomes,
creating opportunities and expanding client offerings where
possible thanks to our combined organization.
2024
highlights
–
Supporting our clients
to achieve their
sustainable investing goals:
20% of Asset
Management’s fund offering
2
globally
will be sustainable
investing products, providing
choice for
clients. At the
end 2024, 23.4%
of Asset Management’s
fund offering consisted of sustainable investing products.
–
At
the
end
of
2024,
Asset
Management
managed
sustainable
investing
invested
assets
of
USD 220.4bn
(2023:
USD 203.4bn).
3
–
At the
end of
2024, Asset
Management had
49 (2023:
35) net-zero
ambition portfolios
available for
clients with
a
combined invested assets value of USD 64.4bn (2023: USD
35.5bn).
4
–
Asset Management actively engaged
with 321 companies on
sustainability-related topics. Of the
total of 473
meetings
undertaken on
sustainability-related topics,
300 included
dialogue regarding
environmental and
social issues
(2023:
373 companies, 536 total meetings and 304 meetings on
environmental and social issues)
–
Asset Management’s corporate
engagements with investee
companies on sustainability-related topics
achieved 66.7%
positive progress against preset objectives (2023: 56.5%).
Our sustainable investing offering
Asset Management has
a broad sustainable
investing product shelf
that includes traditional
and alternative
funds, ETFs
and mandates with broad sustainability
and climate orientations. Examples of such
products include strategies that invest
in climate solutions, the energy transition, infrastructure debt,
green real estate and more. To meet
our client preferences
and demand we constantly review our suite of sustainability
and climate-related portfolios.
Notable climate-related offering developments in 2024
We
expanded
our
offering
in
the
net-zero
fixed
income
space
to
cover
both
corporate
and
sovereign
issuers.
We
partnered
with
Bloomberg
to
create
The
Bloomberg
Global
Treasury
Net
Zero
Progress
Index,
a
net-zero
sovereign
progress index. This methodology
served as the
benchmark index to
convert two of
our existing funds
to net-zero-aligned
strategies: the
UBS (CH)
Investment Fund
– Bonds
Global ex
CHF Government
Net Zero
Ambition Index,
and the
UBS
(CH) Investment Fund – Bonds Global Corporate Climate
Aware Hedged NSL.
We added two
low-carbon ETFs
to support the
preferences of
clients that wish
to reduce carbon
emissions in
their ETF
investments: the UBS (Irl) ETF plc – MSCI Canada ESG Universal
Low Carbon Select UCITS ETF, and the UBS (Irl)
ETF plc –
S&P
500
Climate
Transition
ESG
UCITS
ETF.
These
strategies
target
investee
companies
reducing
carbon
emission
intensities alongside exclusions in fossil fuel extraction and
thermal coal power.
1
UBS Asset Management (Americas) Inc. started its first sustainability strategy in 1997.
2
Measured over a three-year rolling period. The
scope includes traditional and alternative funds
sponsored and managed by Asset Management. Mandates,
white label, Asset Management single investor
and feeder
funds are excluded. As of 2024, products managed by Credit Suisse Asset Management that are categorized in accordance with the legacy Credit Suisse SIF are within the scope of the
total number of funds but not the
total number of UBS Asset Management sustainable
investing funds. They will
only be included once migrated onto
UBS Asset Management product shelves,
i.e. once corresponding data has been
onboarded to UBS
systems, they are fully
meeting the requirements of UBS’s
Group Sustainable Investing Policy,
and are classified as a
UBS sustainable investing product.
This process is being
carried out in waves
and will continue at
least until the end of 2025.
3
Figures do not include invested
assets classified under the
Credit Suisse SIF but include
invested assets of Credit
Suisse portfolios that have
been migrated onto
UBS platforms and vetted
against UBS’s sustainable
investing policies or merged with existing UBS sustainable investing portfolios. This
process is being carried out in waves and will continue at least until the end of 2025. The
Credit Suisse integration-related impact to
sustainable investing invested assets in 2024 was
USD 8.2bn. Invested assets reported as sustainable investing
include limited amounts of instruments not classified
as sustainable investments. This includes
cash and
cash-like instruments that each fund and portfolio holds for liquidity management purposes,
as well as client-directed investments included in sustainable investing mandates.
4
Credit Suisse portfolios are in the process of being assessed in the context of the Asset
Management's Net Zero Alignment Framework to identify
portfolios with a net-zero ambition and are therefore not reflected in
the reported metrics.
Sustainability Report 2024
| Supporting opportunities
82
Other offering developments in 2024
We
expanded our
range of
sustainability-related
options across
our ETFs
strategies in
fixed income
and equities.
New
launches included the UBS
(Irl) ETF plc –
EUR Ultra-Short Bond ESG
UCITS ETF,
the UBS (CH) Investment
Fund – Equities
Switzerland
Small
&
Mid
Cap
ESG
Passive
II,
and
the
UBS
(Irl)
ETF
plc
–
MSCI
Emerging
Markets
ex
China
Socially
Responsible
UCITS
ETF.
These
strategies
require
investee
companies
to
exceed
minimum
ESG
rating
thresholds
and
minimize or exclude exposure to companies involved in activities that include
tobacco production, controversial weapons
and severe ESG controversies.
Active ownership
In
2024,
we
continued
our
programs
of
engagement
with
investee
companies,
focusing
on
outcomes
that
benefit
companies, their shareholders and
wider society. During the year,
we expanded our
approach to escalation actions
where
engagements
are
making
insufficient
progress
including
two
instances
where
we
participated
in
the
co-filing
of
shareholder resolutions. Some highlights from the perspective of our specific environmental
and social engagements are
included below.
Climate
In the sixth
year of our
climate engagement program,
we expanded the scope
from six carbon intensive
sectors to include
financial institutions.
Beyond decarbonization
and transition
planning,
we are
also
engaging with
companies
on their
plans to build resilience and adapt to chronic
physical risks and extreme weather events.
Social
We engage
with investee
companies on
social topics
in three
focus areas:
human capital,
human rights
and health.
In
our
human
rights
engagements,
we
focus
on
worker
safety
in
vulnerable
regions,
responsible
wage
levels,
working
conditions
under extreme
heat
and flooding,
and
just
transition
for
workers
exposed
to climate
change
transition.
In
these
areas
we
also
worked
through
the
Investor
Alliance
on
Human
Rights
and
FAIRR.
In
our
human
capital
engagements,
we
broadened
our
focus
to
include
both
gender
diversity
and
other
diversity
issues
with
a
view
to
enhancing the innovation
capability of companies.
We also engaged
on human capital
development for AI
and human
resources challenges.
In our health
engagements, we
observed good progress
on company disclosure,
and we focused
on the strategic direction of healthier products,
in part by working through the Access to Nutrition
investor network.
›
Refer to the “Environment” section of this report for
more information about the climate program
Impact measurement
Asset Management
has formed
a
collaboration
with the
Sustainable
Development
Investments
Asset Owner
Platform
(SDI
AOP) to
develop
impact
measurement
metrics
that
may
be used
for
listed
equity
and fixed
income
portfolios.
In
2024,
Asset
Management
contributed
proprietary
models
to
the
initiative
in
order
to
accelerate
the
development
of
datasets that can inform investment decisions and help set
a market standard for outcomes reporting.
›
Refer to the UBS Group Annual Report 2024, available
under “Annual reporting” at
ubs.com/investors
, for more information
about the overall business and financial profile of
Asset Management as important context for the
product and financial
information provided here
›
Refer to the “Supporting opportunities” section
of this report for more information about the proportion
of sustainable
investment assets as part of our total invested
assets
Sustainability Report 2024
| Supporting opportunities
83
Investment Bank
The Investment Bank offers
clients global advice and
access to the world’s
primary, secondary and private capital
markets.
In 2024, we continued to hone our
capabilities through initiatives across Global
Markets, ESG Research, Global Banking
and data-led offerings.
2024 highlights
–
We facilitated 96 GSSS bond transactions globally (2023: 102).
1
–
The Investment Bank retained first place in GSSS bond issuance
in Brazil.
2
–
We successfully completed two pilot transactions on the
Carbonplace platform.
Global Research
In
2024,
ESG
Research
delivered
thematic
reports
on
topics
including:
nuclear
energy;
the
EU,
US
and
Asia
Pacific
sustainability-related
regulatory
landscape; views
on the
ESG and
sustainable investing
landscape; advanced
recycling;
biomass; and
desalination.
More generally,
through
our research
we addressed
ways in
which ESG
factors connect
to
individual
markets,
sectors
and
companies
in
our
coverage.
ESG
research
is
supported
by
UBS
Evidence
Lab,
which
provides data-driven insights into ESG-relevant questions, and by UBS HOLT, which provides a clear, objective framework
for comparing and valuing over 20,000 companies worldwide.
Global Markets
Within
Global
Markets,
our
capabilities
include
developing
products
and
solutions
that
aim
to
support
our
clients
in
accessing carbon
credits
(i.e.
emission
allowance,
reduction
and
/ or
removal)
and thematic
exposure
to sustainability
sectors.
In
2024,
we
successfully
completed
two
pilot
transactions
on
the
Carbonplace
platform,
a
carbon
credit
transaction network
we co-founded in
2022 as part
of a consortium
of nine banks.
We will continue
to drive adoption
of the platform and advance our carbon portfolio trading
offering to clients.
We
have
also
focused
on
establishing
the
groundwork
for
green
structured
issuance,
blended
finance,
emission
allowances and project-based carbon removals financing offerings. Building out this product suite is an
important step in
offering clients ESG-aligned investment solutions
alongside the more traditional product
set, particularly as it enables us
to demonstrate our origination capabilities.
In
this
area,
we
can
differentiate
ourselves
meaningfully
from
competitors
through
our
collaboration
with
the
UBS
Optimus Foundation and our Chief Sustainability Office, with many leading non-governmental organizations and project
developers
across
the
climate
and
nature
sectors.
It
is
critical
that
we
realize
our
ambitions
by
concentrating
on
the
opportunities our
clients will
find compelling.
That will
require us
to continue
increasing the
level of
engagement with
clients and to drive more product innovation in 2025.
›
Refer to the “Driving social impact” section of
this report for more information about UBS Optimus
Foundation
1
These metrics
include transactions
meeting the
UBS Sustainable
Finance Guideline,
as described
in the
”Sustainability and
climate risk
policy framework“
section of
the Supplement
to this
report, available
at
ubs.com/sustainability-reporting.
2
Bloomberg.
Sustainability Report 2024
| Supporting opportunities
84
Global Banking
Our Global
Banking teams,
leveraging the
expertise of
the Corporate
Shareholder Advisory
group (“CSA”),
supported
our clients globally by assessing their sustainability profile from the point of view of investors and other stakeholders and
linking these profiles to investor demand and valuation.
2024 deal highlights
–
Financial advisor
to a
US-based manufacturing
company in
connection with
a spin-off
of its
power, renewables
and
electrification subsidiary.
Global Banking
helped the
company navigate
the ESG
market and
regulatory trends
in the
EU, assessed the
subsidiary’s positioning with ESG
funds by developing
an equity story featuring
sustainability to target
investor demand, and identified strategic merger and acquisition
and growth activities.
–
Global coordinator for the USD 2.7bn follow-on green equity offering of a Brazilian water and sanitation company on
the
Sao
Paulo
Stock
Exchange
(B3).
The
company
is
the
first
outside
Europe
to
be
granted
a
“green
equity”
designation, defined in Brazil by
the B3 exchange, with
100% of its revenues and
96% of its capex defined
as green
by S&P Cicero.
Leveraged and debt capital markets
The Investment Bank arranged USD 56.0bn
1
GSSS financing through 96 bond deals
during 2024 (2023: USD 53.7bn and
102
deals).
We
continued
to
solidify
our
market-leading
position
in
the
Swiss
franc-denominated
market,
with
the
Investment Bank’s market
share at 31%.
2
Next to
Switzerland, our
transaction activity in
the GSSS bond
market continued
to be particularly strong in Australia and Brazil. In Australia,
we led nine SSA Australian dollar-denominated
transactions
in 2024.
Among
these
key
transactions,
we
structured
and
executed
the
Australian
government’s
inaugural
AUD
7bn
green
treasury
bond, the
first to
be launched
from its
green bond
program as
part of
its wider
sustainable finance
strategy.
Green
treasury
bonds
are
designed
to
enable
investors
to
back
public-sector
projects
that
drive
Australia’s
net-zero
transformation forward,
support environmental objectives and help finance high-quality sovereign projects with targeted
environmental outcomes.
They also boost the scale and credibility of the domestic green finance market while attracting
green capital to the country.
In July 2024,
our joint venture
in Brazil, UBS
BB Investment
Bank, acted as
global coordinator and
sustainability advisor
to a Brazilian cosmetics and personal care company on its
BRL 1.3bn sustainability-linked debenture. This was the largest
debt
instrument
ever
linked
to
the
Amazon.
Its
specific
key
performance
indicator
focused
on
the
level
of
inputs
sustainably sourced from the Amazon.
›
Refer to the UBS Group Annual Report 2024, available
under “Annual reporting” at
ubs.com/investors
for more information about
the overall business and financial profile of the Investment
Bank as important context for the product and
financial information
provided here
1
Total face value of GSSS financing.
2
Bloomberg.
Sustainability Report 2024
| Supporting opportunities
85
Group Treasury activities
In
2024,
Group
Treasury
continued
to
invest
its
high-quality
liquid
assets
portfolios
(HQLA)
under
a
dedicated
ESG
investment
framework.
This
framework
guides
the
integration
of
ESG
considerations
into
the
investment
process
alongside
more
traditional
economic
and
risk
dimensions.
The
framework
supports
investments
in
green,
social
and
sustainability labeled bonds.
At
the
end
of
2024,
Group
Treasury
held
USD 7.9bn
of
green,
social
and
sustainability
labeled
bonds
in
its
HQLA
portfolios, compared with the USD 8bn it held in 2023.
Green Funding Framework
Our Group-wide Green Funding Framework
sets out how we intend to
connect our sustainability objectives
with access
to financial markets through a variety of funding products.
›
Refer to
ubs.com/greenbonds
for more details about the UBS Green Funding Framework,
external reviews and annual reporting
(including impact and allocation reporting)
Sustainability Report 2024
| Managing sustainability and climate risks
86
Managing sustainability and
climate risks
Introduction
Managing sustainability and climate risks is a
key component of our corporate responsibility. We define
sustainability and
climate risk as
the risk that
we negatively impact
on,
or are impacted
by, climate change,
natural capital, human
rights
and
other
environmental
and
social
matters.
Sustainability
and
climate
risks
may
manifest
as
credit,
market,
liquidity,
business or non-financial risks for UBS, resulting in potential
adverse financial, liability or reputational impacts.
Group Risk Control (GRC) is
responsible for our firm-wide sustainability and
climate risk framework and the
management
of
exposure
to
sustainability
and
climate
(financial)
risks
on
an
ongoing
basis
as
a
second
line
of
defense.
Group
Compliance, Regulatory & Governance (GCRG) monitors the adequacy of our control environment for
non-financial risks
(NFR), applying
independent
control and
oversight.
We
manage
sustainability
and climate
risk within
a
dedicated
risk
management framework. In 2024, the UBS Group (including
Credit Suisse) was managed under the same framework.
Our sustainability
and climate
risk framework
continues to
evolve through
our multi-year
initiative focused
on meeting
regulatory requirements and enhancing core processes, such
as reporting and disclosures.
›
Refer to the “Sustainability and climate risk
policy framework” section of the Supplement
to the UBS Group Sustainability Report
2024, available at
ubs.com/sustainability-reporting,
for more information
Sustainability and climate risk management
framework
Our firm-wide sustainability and climate risk
management framework and related policies, standards
and guidelines form
the basis of our
management practices and
control principles. They
enable us to identify
and manage potential
adverse
impacts on
the climate,
the environment
and human
rights, as
well as
related risks
affecting us
and our
clients, while
supporting the transition to a low-carbon economy.
Overseen by senior management, the framework applies to
the balance sheet, our own operations
and our supply chain.
It consists
of four
different phases: (i)
risk identification and
measurement; (ii) monitoring and
risk appetite setting;
(iii) risk
management and control; and (iv) risk reporting and
disclosure.
›
Refer to “Our investment management approach to
sustainability and climate risks” in this section
for a description of our
sustainability and climate risk investment approach
›
Refer to the “Sustainability and climate risk policy framework”
section of the Supplement to the UBS
Group Sustainability Report
2024, available at
ubs.com/sustainability-reporting,
for more information
Sustainability Report 2024
| Managing sustainability and climate risks
87
The Group Chief Risk Officer is responsible for the development of the sustainability and climate risk framework and risk
appetite, along with its integration into existing Group frameworks. The Chief Risk Officer for Sustainability supports the
Group
Executive
Board
by
providing
leadership
on
sustainability
in
collaboration
with
business
divisions
and
Group
functions and is supported by the sustainability and climate risk unit. In addition, the Risk Committee
and the Corporate
Culture and
Responsibility
Committee
of the
Board of
Directors
jointly monitor
the
progress of
our efforts
to address
sustainability and climate risk.
›
Refer to the “Supplement to Governance”
section of the Supplement to the UBS Group Sustainability
Report 2024, available at
ubs.com/sustainability-reporting
, for further details on the sustainability governance
at UBS
Our
multi-year
sustainability
and
climate
risk
initiative
(the
SCR
Initiative),
launched
in
2020
by
the
sustainability
and
climate risk
unit, continues
to build
capacity through
expertise, collaboration,
technology and
data. This
initiative was
created
to
integrate
sustainability
and
climate
risk
considerations
into
our
traditional
financial
and
non-financial
risk
management frameworks, which address
these traditional risks across our
business divisions and legal
entities, in an ever-
changing regulatory environment.
In 2024,
the SCR
Initiative further
advanced its
efforts toward
the goal
of fully
integrating qualitative
and quantitative
sustainability and climate
risk considerations into
the firm’s traditional
risk management and
stress-testing frameworks.
Developments
in
2024
included
introducing
climate-driven
risk
analytics
into
the
credit
decision-making
process
for
selected
portfolios,
introducing
climate-driven
quantitative
risk
appetite
where
mandated,
developing
climate
risk-
adjusted stress models
and scenario analysis
capabilities, expanding climate risk
monitoring internally, and
further refining
processes, governance and methodologies to drive forward more comprehensive sustainability and climate risk reporting
and
disclosures.
Furthermore,
to
monitor
and
control
the
utilization
of
the
divisional
contributions
toward
the
2030
corporate lending
sector decarbonization targets,
a decarbonization control
framework has
been established
with defined
thresholds per sector and business division
and at a Group level.
These thresholds are defined annually and
the utilization
against the agreed thresholds is monitored on a quarterly
basis.
Sustainability and climate
risk management activities
conducted in 2024
are described below,
across the four
phases of
the sustainability and climate risk framework.
›
Refer to the “Supplement to Governance”
and “Supplement to Managing risks“ sections
of the Supplement to the UBS Group
Sustainability Report 2024, available at
ubs.com/sustainability-reporting,
for more details about our sustainability and climate
risk
policy framework
Sustainability Report 2024
| Managing sustainability and climate risks
88
Risk identification and measurement
We
assess
the
materiality
of
our
sustainability-
and
climate-driven
risks
and
impacts
on
an
annual
basis.
This
is
underpinned by an assessment of
how key risk drivers may
impact us through financial and non-financial
risks (e.g. credit
losses or reputational incidences resulting
in lost revenues) and
by assessing the proximity of
our activities to the
potential
negative impact on the environment (including climate)
and human rights.
We aim to identify sustainability and
climate risks at divisional and cross-divisional
levels, both through the sustainability
and
climate
risk
materiality
assessment
mentioned
above
and,
increasingly,
by
integrating
them
into
the
firm-wide
traditional risk identification and measurement processes.
›
Refer to the “Environment” section of this report for details
about our climate-related materiality assessment
and the underlying
methodology
Our risk identification
methodologies collectively define
our focus areas and
key risk drivers.
The results of
these efforts
contribute to our sustainability and climate risk management
strategy by:
–
identifying concentrations
of climate-sensitive
exposure that
may make
us vulnerable
to financial
and non-financial
risks, facilitating resource prioritization to enhance risk quantification
and subsequent management actions; and
–
supporting the implementation
of a
client-centric business strategy, in
which we support
clients with their
sustainability
transition and identify clients who can benefit from sustainability
-focused UBS products and services.
The outputs
of the
above process
supports senior
management in
taking informed
decisions about
sustainability-
and
climate-related risks and provides stakeholders with key information
through our external disclosures.
Transition risk
Climate-driven transition risks, which
arise from the efforts
to mitigate the effects
of climate change, may
contribute to
a
structural
change
across
economies
and
consequently
affect
banks and
the
stability
of the
broader
financial
sector.
These risks extend to the value of investments and may also affect
the value of collateral (e.g. real estate).
In
2024,
UBS
developed
a
transition
risk
rating
model
(TR
RM),
aligned
with
the
transition
risk
heatmap
(TR
H)
and
designed to
provide a
company-level rating
of transition
risk, where
input data
is available
The TR
RM mainly
relies on
two inputs:
(i) the
output of
the transition
risk heatmap
(TR H)
and (ii)
the Company
Transition Assessment
Scorecard
(CTAS), an
internal UBS
tool that
systematically categorizes listed
companies based on
publicly available
data from
external
third-party data sources into climate transition readiness categories. Whenever CTAS does not provide an assessment for
a company, the model falls back to an existing transition risk heatmap
(TR H).
The climate transition
risk profile chart
shows that, at
the end of
2024, the exposure
of the UBS
Group to climate-sensitive
sectors and
related business
activities has
decreased
due to
accelerated winddown
of Non-core
and Legacy
corporate
exposures.
Climate-driven
transition-risk
sensitive
exposure
accounted
for
17.1%
of
the
total
gross
lending exposure,
down from 19.2% in 2023. Key sectors contributing to sensitive exposure continues to be same as 2023 (i.e. real estate,
industrials
and
transportation).
Compared
to
last
year,
our
sensitive
exposure
to
Services
and
Technology
sector
has
increased, in
line with
a methodology
change where
certain business
activities that
were previously
rated non-sensitive
are now rated sensitive due to increased reliance on
artificial intelligence (AI) and data center operations requiring higher
use of power.
›
Refer to the “Supplement to Managing sustainability
and climate risks” and the “Basis of preparation” sections
of the Supplement
to the UBS Group Sustainability Report 2024, available
at
ubs.com/sustainability-reporting
, for details on methodologies
Sustainability Report 2024
| Managing sustainability and climate risks
89
Sustainability Report 2024
| Managing sustainability and climate risks
90
Physical risk
Climate-driven physical risks arise from acute
hazards, which are increasing in
severity and frequency, and chronic climate
risks arise
from an
incrementally changing
climate. Climate
-driven physical
risks may
contribute to
a structural
change
across economies
and consequently
affect banks
and the
stability of
the broader
financial sector.
These risks
extend to
the value of investments and may also affect the value of collateral
(e.g. real estate).
In 2024, UBS developed a physical risk rating model (PR RM), aligned with the physical risk heatmap model
(PR HM). The
PR RM is designed
to provide a company-level
indication of physical
risk while both models
are designed to provide
the
UBS Group exposure to
climate-driven physical risks. The
PR RM and
PR HM measure how
four acute physical risk
hazards
(wildfires, heatwave, floods and tropical cyclones) may drive
physical risk of the companies.
The climate physical risk profile chart shows that,
at the end of 2024, the exposure of
the UBS Group to climate-sensitive
sectors and
related business
activities has
decreased
due to
accelerated winddown
of Non-core
and Legacy
corporate
exposures. Climate-driven physical-risk sensitive exposure accounted for 9.8% of the total gross lending exposure, down
from 11.7%
in 2023.
Geographically,
the majority
of the
sensitive exposure
is from
the Americas
region, followed
by
Switzerland and
other geographical
locations. Most
of the
year-on-year reduction
in sensitive
exposure is
due to
Non-
core and Legacy
exposure winddown
in the Americas
region. At Group
level, most of
the climate-sensitive
physical risk
exposure is located within
countries that have a
relatively high adaptive capacity
to manage physical risk
hazards resulting
in a moderately low risk
profile at regional level.
›
Refer to the “Supplement to Managing sustainability
and climate risks” and the “Basis of preparation”
sections of the Supplement
to the UBS Group Sustainability Report 2024, available
at
ubs.com/sustainability-reporting
, for details on methodologies
Sustainability Report 2024
| Managing sustainability and climate risks
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Sustainability Report 2024
| Managing sustainability and climate risks
92
Climate scenario analysis
We use scenario-based approaches to
assess our exposure to physical
and transition risks stemming from
climate change.
We have
introduced several in-house
assessments facilitated by
industry collaborations to
tailor approaches for
addressing
methodological and data
challenges.
We have utilized
dedicated risk models
incorporating systematic
and idiosyncratic
effects to carry out stress testing exercises covering short-,
medium- and long-term horizons.
The work
performed includes
regulatory scenario
analysis and
stress test
exercises such
as the
Bank of
England’s (BoE)
2021 Climate Biennial Exploratory Scenario (CBES), the 2022 Climate Risk Stress Test
(CST) of the European Central Bank
(the ECB),
which assesses
banks’ preparedness
for dealing
with financial
and economic
shocks stemming
from climate
risk; and
the 2024
Swiss Financial
Market
Supervisory Authority
(FINMA)
/ Swiss
National Bank
(SNB) climate
scenario
analysis exercise.
These exercises
enabled the
identification of
financial risks
from climate
change and
made it
possible
for UBS to assess management
actions in response to
different scenario results
and perform counterparty-level
analysis.
While these exercises showed mild losses and low exposure to climate risk for the entities within scope, given the limited
impact to
the macroeconomic financial
environment,
the analysis allowed
UBS to
enhance its climate
risk scenario analysis
and stress testing, further developing our capabilities for
assessing risks and vulnerabilities from climate change.
In 2024,
we also
advanced
our capabilities
surrounding internal
climate risk
scenario analysis
and stress
testing for
the
UBS Group. We refined and expanded our internal climate risk
scenarios with a focus on both transition and physical risk
projections across a 30-year time frame.
In addition, we developed additional climate risk
methodologies to enhance and
broaden portfolio coverage.
Over the last few
years,
we have also leveraged
industry-wide initiatives, such
as the Paris Agreement
Capital Transition
Assessment (PACTA) exercise launched by the Swiss Federal Office
for the Environment (FOEN) in 2020, 2022 and 2024.
Through
this
exercise,
we
assessed
the
climate
alignment
of
our
listed
investments
(including
equities
and
bonds),
mortgages
and
direct
real
estate
portfolios.
The
assessment
enabled
us
to
compare
our
results
with
the
aggregated
performance of all participating banks’ portfolios, showing the
progress made over time and the efforts still needed.
Sustainability Report 2024
| Managing sustainability and climate risks
93
Monitoring and risk appetite setting
Our sustainability and climate risk
policy framework defines the qualitative
and quantitative risk appetite for
sustainability
and climate risk and is subject to periodic updates and enhancements.
As part of the
sustainability and climate risk monitoring
process, we have developed methodologies and
metrics to assess
our continued exposure to carbon-related assets and climate-related risk-sensitive sectors. When developing our metrics,
we consider the inputs and guidance provided by standard-setting organizations,
as well as new or enhanced regulatory
requirements for climate
disclosures. In 2024,
we continued working
on methodologies covering
climate-driven transition
and physical risks.
The
table
below includes
climate-related
risk metrics
for
the
UBS Group
AG,
UBS AG
on a
standalone
basis
and UBS
Switzerland AG and UBS Europe SE, both on a standalone basis. The trend analysis of exposure is available starting 2023
as UBS Group exposures were reported on a consolidated
basis post Credit Suisse integration.
The
proportion of
the
UBS Group’s
total
gross
lending
exposure accounted
for
by carbon-related
assets
decreased
to
10.9% in
2024 compared
to 12.1%
in 2023.
The UBS
Group metrics
were reported
on a
consolidated basis
including
Credit Suisse exposures starting 2023.
Following
the
mergers
of
UBS
AG
and
Credit
Suisse
AG
in
May
2024
and
of
UBS
Switzerland
AG
and
Credit
Suisse
(Schweiz)
AG
in
July
2024,
the
total
gross
lending
exposures
of
UBS
AG
standalone
and
UBS
Switzerland
AG
have
increased due to the inclusion of legacy Credit
Suisse exposure. Consequently, the climate-driven transition risk, physical-
risk-sensitive exposure and carbon-related assets have increased
on an absolute basis, as expected.
Risk management – Climate-related metrics
For the year ended
% change from
31.12.24
31.12.23
31.12.23
Climate-related metrics (USD bn)
1, 2, 3, 4
Carbon-related assets: UBS Group AG consolidated
1, 2, 3, 4, 5, 6
76.5
93.9
(18.5)
Carbon-related assets proportion of total gross lending exposure, UBS Group
AG consolidated (%)
1, 2, 3, 4, 5, 6
10.9
12.1
Carbon-related assets: UBS AG (standalone)
1, 2, 3, 4, 5, 6
30.3
9.2
228.3
Carbon-related assets: UBS Switzerland AG (standalone)
1, 2, 3, 4, 5, 6
46.6
27.4
69.8
Carbon-related assets: UBS Europe SE (standalone)
1, 2, 3, 4, 5, 6
0.0
0.0
0.0
Total exposure to climate-sensitive sectors, transition risk, UBS Group AG consolidated
1, 2, 3, 4, 6, 7, 8
120.3
149.0
(19.3)
Climate-sensitive sectors, transition risk, proportion of total gross lending exposure, UBS
Group AG consolidated (%)
1, 2, 3, 4, 6, 7, 8
17.1
19.2
Total exposure to climate-sensitive sectors, transition risk, UBS AG (standalone)
1, 2, 3, 4, 6, 7, 8
36.6
12.8
186.4
Total exposure to climate-sensitive sectors, transition risk, UBS Switzerland AG (standalone)
1, 2, 3, 4, 6, 7, 8
83.0
49.8
66.6
Total exposure to climate-sensitive sectors, transition risk, UBS Europe SE (standalone)
1, 2, 3, 4, 6, 7, 8
0.0
0.0
0.0
Exposure to climate-sensitive sectors, transition risk, Traded products, UBS Group AG consolidated
1, 2, 3, 4, 7, 8, 9
2.1
Exposure to climate-sensitive sectors, transition risk, Issuer risk, UBS Group
AG consolidated
1, 2, 3, 4, 7, 8, 10
6.8
Total exposure to climate-sensitive sectors, physical risk, UBS Group AG consolidated
1, 2, 3, 4, 6,7,8
68.9
90.7
(24.0)
Climate-sensitive sectors, physical risk, proportion of total gross lending exposure, UBS
Group AG consolidated (%)
1, 2, 3, 4, 6, 7, 8
9.8
11.7
Total exposure to climate-sensitive sectors, physical risk, UBS AG (standalone)
1, 2, 3, 4, 6, 7, 8
65.7
52.5
25.2
Total exposure to climate-sensitive sectors, physical risk, UBS Switzerland AG (standalone)
1, 2, 3, 4, 6, 7, 8
22.6
15.1
50.0
Total exposure to climate-sensitive sectors, physical risk, UBS Europe SE (standalone)
1, 2, 3, 4, 6, 7, 8
0.0
0.0
0.0
Exposure to climate-sensitive sectors, physical risk, Traded products, UBS Group AG consolidated
1, 2, 3, 4, 7, 8, 9
3.3
Exposure to climate-sensitive sectors, physical risk, Issuer risk, UBS Group
AG consolidated
1, 2, 3, 4, 7, 8, 10
12.6
1
Methodologies for assessing climate-related risks are emerging and may change over time. As the methodologies, tools and data availability improve, we will further develop our risk identification and measurement
approaches. Lombard lending rating is
assigned based on the average riskiness of
collateral.
2
Metrics for 2023 are recalculated and restated based
on the 2024 methodology for comparison purpose.
Percentage
change is calculated based on the
full underlying exposure, which may result in small deviations
when calculated using reported figures that
are rounded to one decimal.
3
Over the last year, the UBS Group continued
its effort to
integrate Credit
Suisse systems
and data.
As a result,
the metric
calculation process
benefits from
data enhancement
even when
the methodology
remains the same
year on year.
At the same
time,
integration work is ongoing and expected to bring in further data alignment in future, which may require restatement of reported metrics.
4
UBS continues to collaborate to resolve methodological and industry data
challenges, and seeks to integrate both impacts to and dependencies on a changing natural and climatic environment, into how UBS evaluates its risks and opportunities.
5
As defined by the Task Force on Climate-
related Financial Disclosures (the TCFD), in its expanded definition published in
2021, UBS defines carbon-related assets through industry-identifying attributes of the firm’s banking book. UBS further includes the four
non-financial sectors addressed by the TCFD,
including, but not limited to,
fossil fuel extraction, carbon-based power
generation, transportation (air,
sea, rail, and auto manufacture),
metals production and mining,
manufacturing industries,
real estate development,
chemicals, petrochemicals,
and pharmaceuticals,
building and construction
materials and activities,
forestry, agriculture,
fishing, food and
beverage production,
including trading companies that
may trade any of
the above (e.g. oil
trading or agricultural commodity
trading companies). This
metric is agnostic of risk
rating, and therefore may
include exposures of companies
that may be
already transitioning or
adapting their business
models to climate
risks, unlike
UBS climate-sensitive sectors
methodology, which
takes a risk
-based approach to
defining material exposure
to climate
impacts.
6
Gross lending exposure consists of total on balance sheet loans and advances to customers and off-balance sheet guarantees and irrevocable loan commitments (within the scope of expected credit loss)
and is based on consolidated IFRS numbers (inclusive of purchase price allocation adjustments recorded in UBS Group as a result of the acquisition of Credit Suisse in compliance with IFRS 3, Business Combinations).
7
Climate-related risks are scored between 0 and 1,
based on sustainability and climate risk transmission channels. Risk ratings represent a range of scores
across five rating categories: low, moderately low, moderate,
moderately high, and high. The climate-sensitive exposure metrics are determined based upon the top three of the five rated categories, i.e.
moderate to high.
8
As the transition and physical risk rating models and
physical risk heatmap model are embedded
further into the risk management framework, we
may identify new use cases that
could trigger validation of the model for
identified use cases and associated enhancements.
As a consequence,
restatement of
reported metrics
may be required.
9
For traded
products, the
metric is
calculated using
over-the-counter (OTC)
derivatives, exchange-traded
derivatives (ETDs)
and securities
financing transactions (SFTs), consisting of securities borrowing and lending, and repurchase and reverse repurchase agreements.
10
For issuer risk, the metric is calculated upon HQLA assets, debt securities, bonds,
liquidity buffer securities. After the parent bank merger,
the issuer risk in legacy Credit Suisse entities is less than 4% of overall UBS Group and considered non-material and excluded
from reported metrics.
The table
below presents
a view
of our
risk profile
and changes
year on
year (YoY),
within sectors
and across
climate
risks. It first shows
our total exposure
to each sector
(and whether that
has increased
or decreased
compared to 2023),
followed
by
an
exposure-weighted
risk
rating.
The
table
also
shows
the
YoY
weighted
average
transition
risk
trend
followed by sensitive
exposure for
each of climate
transition risk and
physical risk. Overall,
the UBS Group
continues to
have an average rating of moderate for transition risk and
moderately low for physical risk.
Sustainability Report 2024
| Managing sustainability and climate risks
94
Risk exposures by sector for UBS Group
1,2,3,4,5, 6, 7
Transition risk
Physical risk
Sector / Subsector
2024
exposure
(USD bn)
YoY exposure
trend
8
Weighted average
risk rating 2024
9
YoY weighted
average risk trend
8
2024 climate-
sensitive exposure
(USD bn)
5
Weighted average
risk rating 2024
9
YoY weighted
average risk trend
8
2024 climate-
sensitive exposure
(USD bn)
5
Agriculture
Agriculture, fishing and forestry
0.93
↓
Moderate
→
0.42
Moderately low
→
0.54
Food and beverage
6.51
↓
Moderately high
→
6.51
Moderate
→
3.93
Financial services
Financial services
82.75
↓
Moderately low
→
0.03
Moderately low
→
18.85
Fossil fuels
Downstream refining, distribution
0.54
↓
Moderately high
↓
0.54
Moderately low
↑
0.26
Integrated oil and gas
0.32
→
Moderate
↓
0.32
Moderately low
→
0.00
Midstream transport, storage
0.10
↓
Moderate
→
0.10
Moderate
↑
0.10
Trading fossil fuels
6.72
→
Moderately high
→
6.72
Moderately low
→
0.73
Upstream extraction
0.24
↓
High
→
0.24
Moderately low
↓
0.02
Industrials
Cement or concrete manufacture
0.24
↓
High
→
0.24
Moderately low
→
0.03
Chemicals manufacture
3.80
↓
High
→
3.80
Moderately low
↓
1.27
Electronics manufacture
5.29
↓
Moderate
↓
4.48
Moderately low
↓
1.47
Goods and apparel manufacture
5.13
↓
Moderately high
→
5.11
Moderately low
→
2.94
Machinery manufacturing
8.04
↓
Moderately high
→
8.02
Moderately low
→
1.21
Pharmaceuticals manufacture
3.64
↓
Moderately high
→
3.64
Moderately low
↓
1.06
Plastics and petrochemicals manufacture
1.81
↓
Moderately high
→
1.81
Moderately low
↓
0.69
Metals and mining
Mining conglomerates (incl. trading)
2.83
↓
Moderately high
→
2.83
Moderately low
→
0.07
Mining and quarrying
1.10
↓
Moderate
↑
0.66
Moderately low
→
0.59
Production of metals
0.87
↓
Moderately high
→
0.87
Moderate
→
0.39
Private clients
Lombard
151.50
↓
Moderately low
→
0.00
Moderately low
→
0.00
Real estate
Development and management
11.64
↑
Moderately high
→
11.04
Moderately low
↓
0.68
Real estate financing
10
83.34
↓
Moderate
→
36.28
Moderately low
→
2.48
Private clients with mortgages
10
250.59
↓
Moderately low
→
0.00
Low
→
0.00
Services and technology
Services and technology
35.93
↓
Moderately low
→
9.31
Moderately low
→
18.85
Sovereigns
Sovereigns
2.91
↓
Moderate
↓
0.34
Moderately low
→
0.04
Transportation
Air transport
2.98
↓
Moderately high
→
2.84
Moderate
→
2.50
Automotive
1.20
↓
Moderate
↓
0.23
Moderate
→
1.08
Rail freight
0.90
↑
Low
→
0.00
Moderate
→
0.77
Road freight
1.32
↑
Moderately high
→
1.32
Moderately low
↓
0.64
Transit
0.49
↓
Moderately low
→
0.00
Moderately low
↓
0.33
Transportation parts and equipment
supply
1.10
↓
Moderately high
→
1.10
Moderate
→
0.64
Water transport
8.55
→
Moderately high
→
8.55
Moderately low
→
5.21
Utilities
Power generation
2.76
↓
High
↑
2.24
Moderately low
↓
1.42
Waste treatment
0.68
↓
Moderately high
→
0.68
Moderately low
↑
0.19
Not classified
11
15.07
↓
Not classified
→
0.00
Not classified
→
0.00
Grand Total
701.80
↓
Moderate
→
120.25
Moderately low
→
68.94
1
Methodologies for assessing climate-related risks are emerging and may change
over time. As the methodologies, tools, and data availability improve, we will further develop our risk identification and measurement
approaches. Lombard lending rating is assigned based on the average riskiness of loans.
2
Metrics for 2023 are recalculated and restated based on the 2024 methodology for comparison purpose.
3
Gross lending
exposure consists of total on balance
sheet loans and advances to customers and
off-balance sheet guarantees and irrevocable loan commitments (within the
scope of expected credit loss) and
is based on consolidated
IFRS numbers (inclusive
of purchase price
allocation adjustments
recorded in
UBS Group
as a result
of the acquisition
of Credit
Suisse in compliance
with IFRS
3, Business Combinations).
4
UBS continues to
collaborate to resolve methodological
and industry data challenges,
and seeks to integrate
both impacts to and
dependencies on a changing
natural and climatic environment,
into how UBS evaluates
its risks and
opportunities.
5
Climate-related risks are scored between 0 and
1, based on sustainability and climate risk
transmission channels. Risk ratings represent a range of scores across five
rating categories: low, moderately
low, moderate,
moderately high,
and high. The
climate-sensitive exposure
metrics are
determined based
upon the top
three of the
five rated
categories i.e.
moderate to
high.
6
Over the last
year,
UBS Group
continued its
effort to
integrate Credit
Suisse systems
and data.
As a
result, metric
calculation process
benefits from
data enhancement
even when
methodology remains
same year-on-year.
At the
same time,
integration work is ongoing and
expected to bring in further data
alignment in future which may require
restatement of reported metrics.
7
As transition and physical risk rating
models and physical risk heatmap
model are embedded
further into the
risk management framework,
we may identify
new use cases
that could trigger validation
of model for
identified use cases
and associated enhancements.
As a consequence,
restatement of reported metrics
may be required.
8
A material change in
the risk profile (discrete
risk score, weighted
average per sub-sector)
is considered as
>5% shift up,
or down year on
year. Similarly,
for
absolute exposure.
9
Displayed ratings represent exposure-weighted averages
for a given sector scope.
10
The real estate segments have been aligned
with the expected credit loss segments UBS
applies under
IFRS. Real estate financing includes rental or income-producing real estate financing
to private and corporate clients secured by real estate.
Private clients with mortgages include lending to private clients secured
by
owner-occupied real estate and personal account overdrafts of those clients.
11
Not classified represents the portion of UBS’s business activities where methodologies and data are not yet able to provide
a rating.
Sustainability Report 2024
| Managing sustainability and climate risks
95
Risk management and control
In 2024,
we continued
to develop
solutions to
integrate sustainability
and climate
risks into
traditional risk
categories,
such as our credit, market,
liquidity, non-financial and reputational risk frameworks. We
progressively enhanced our four-
stage approach (defined above in
the sustainability and climate risk
management framework) by leveraging
research on
how sustainability and climate
risk drivers may be
transmitted to our clients
(and their assets)
and ultimately to
the firm
in the form
of financial
and non-financial
risks. Our
approach supports
the ongoing
management of
sustainability and
climate risks as
they manifest
across traditional risk
categories and has
been built in
line with principles
outlined by the
Basel
Committee
on
Banking
Supervision
(the
BCBS)
and
the
Task
Force
on
Climate-related
Financial
Disclosures
(the
TCFD,
now
organized
under
the
ISSB).
As
Swiss
financial
regulator
FINMA
has
mandated
financial
institutions
to
implement
nature-related
financial
risks
in
their
due
diligence
processes
by
2028
(FINMA
Circular
2026/1
on
nature-
related
financial
risk),
UBS
is
building
its
capabilities
to
embed
the
management
of
these
risks
in
its
due
diligence
processes.
Our progress is summarized in the following table.
Managing sustainability and climate risks
within traditional risk categories
Traditional risk
category
Sustainability and climate risk
transmission channels.
Key developments
Credit risk
Our potential credit losses driven by
risks from a changing physical climate,
the transition to a low-carbon
economy.
Climate-related risk drivers can impact
household, corporate or sovereign
income and / or wealth. Physical and
transition risk drivers increase our
potential losses as soon as they have a
negative effect on a borrower’s ability
to repay and / or fully recover the value
of a loan in the event of default.
In 2024, we further embedded climate-related
risks into our credit risk management framework.
By collaborating
across business divisions and between both the first and second
lines of defense, we developed innovative
solutions tailored to the risk profiles and material drivers of
risk within our businesses:
Investment Bank:
The current credit-granting process has been amended to identify and
measure the potential for
credit losses driven by climate-related risks for corporate lending and
leveraged finance. At the transaction level,
this is achieved by integrating tools such as sector-level climate-related
risk heatmaps and company-level due
diligence scorecards into the credit approval analysis and decision-making
process. In addition, where mandated,
concentration triggers have been set up and are monitored and reported
on a quarterly basis for all relevant
counterparties. Furthermore, at the divisional level, progress has been made to enhance
and automate reporting of
the full Investment Bank lending portfolio, on a quarterly basis.
Global Wealth Management:
The current credit-granting process identifies and assess potential
credit losses driven
by climate-related risks for Lombard lending in Switzerland
and international locations by integrating climate-
related due diligence questions and leveraging the climate risk heatmaps
in the credit assessment at a transaction
level. The approach encompasses Lombard loans to operating companies
and those backed by concentrated equity
posted as collateral and we aim to further enhance the scope across
regions and products in future. Furthermore,
progress was made to enhance and automate reporting of
the combined Global Wealth Management Lombard
lending portfolio, on a quarterly basis.
Personal & Corporate Banking:
The current credit-granting process identifies and assesses potential
credit losses
driven by climate-related risks by integrating climate-related due diligence
questions and leveraging the climate
risk heatmaps in the credit assessment at a transaction level. This approach was rolled
out in 2023 to the P&C
Multinationals business and expanded in 2024 to include
a wider coverage of the corporate client portfolio as well
as the commodity trade finance business. Furthermore, at the divisional level progress was made to
enhance and
automate reporting of the combined Personal and Corporate lending portfolio, on a quarterly basis.
Market risk
(traded and
not traded)
Potential financial impacts on the firm
from price shifts and / or market
volatility. A changing physical
environment (including climate
change) may affect the value of
companies reliant on the natural
environment and / or how the market
perceives such companies. The
transition to a low-carbon economy
through climate policies, low-carbon
technologies, demand shifts and / or
market perception may also impact the
value of our positions and / or lead to
a breakdown in correlations between
risk factors (e.g. prompting a change
in market liquidity and / or challenging
assumptions in our model).
In 2024, we assessed the risk from planned portfolios, in line with our multi-year
sustainability and climate risk
initiative, and established solutions for integrating climate-related risks into our market risk management
framework. Progress on integrating climate-related risks into our market risk management
was incrementally
driven by enhancing analytical capacity, applying the climate risk rating model
in our market-risk monitoring
systems and developing stress testing capabilities. We have adapted our in-house
long-term scenarios to the
specifics of short-term market risk analytical requirements.
Enhancing analytical capacity:
Leveraging existing sector-level heatmap methodologies
and our in-house scenario
development capacity, we sought to perform a loss-driven materiality assessment.
By linking the risk ratings with
adverse-scenario-driven shocks, we were able to further examine the correlations
between risk factors and
understand the short-term loss potentials for climate. In 2024, we were
able to introduce a climate risk rating
model for the first time.
Automation:
Market risks systems facilitate for daily monitoring, reporting and control.
By integrating these with
our centralized climate sector-level heatmap together with climate
risk rating model, we are able to understand
and react to drivers of climate impacts on our portfolios
through regular assessments and monitoring.
Quantitative risk appetite:
For selected legal entities, climate risk concentration triggers were introduced in 2023
based on the sector-level climate risk heatmaps.
The solution facilitates daily monitoring of positions that are
considered inherently sensitive to climate risks, including an automated
breach escalation process along with the
market risk escalation path for concentration limits, providing an opportunity for remediation
actions. The triggers
cover credit delta and equity delta aggregated in accordance
with the “sensitivity,” as defined through our
heatmapping methodology.
Sustainability Report 2024
| Managing sustainability and climate risks
96
Managing sustainability and climate risks
within traditional risk categories
Liquidity risk
The potential impact on liquidity
adequacy is driven by risks from a
changing physical climate, the
transition to a low-carbon economy.,
Climate events have been proven to
affect funding conditions, and
therefore liquidity buffers across
broader banks. Climate-related risks
are considered an additional driver of
liquidity risk. As such, they may impact
our liquidity adequacy, directly or
indirectly, through our ability to raise
funds, liquidate assets and / or our
customers’ demand for liquidity. This
could result in net cash outflows or
depletion of our liquidity buffer.
In 2024, we further integrated climate risk into our liquidity framework
for planned portfolios, in line with the
multi-year sustainability and climate risk initiative. Climate risk stress
testing and climate risk reporting were
introduced for the first time in 2024, leveraging the heatmap and climate
risk rating model. The identification of
material climate-related risks and the integration of those potential
risks into the internal liquidity risk
management framework will be an iterative process as we continuously
improve the methodology, along with
improving the availability and quality of required data in the industry
and enhanced analytics and insights over
time.
Non-financial
risk
This is the non-financial impact on UBS
(compliance, operational risk and
financial crime) from inadequate or
failed internal processes, people and
systems and / or externally due to
physical climate events or stakeholder
legal action.
Alignment with the BCBS Principles for the effective
management and supervision of climate-related (non-
financial) risks has been key in 2024 and is subject to on-going monitoring
as of 2025.
We have completed work to embed ESG (environmental, social
and governance)-related risks, including climate
considerations as a standalone risk indicator to the Group non-financial
risk identification model governance used
as the basis for scenario coverage and non-financial risk regulatory
/ economic capital determination.
We will continue to evolve the framework in alignment with our commercial
strategy and industry expectations,
with work ongoing to assess the results of ESG risk integration
more broadly into non-financial risk taxonomy risk
appetite statements.
Reputational
risk
This is the risk of an unfavorable
perception, or a lessening of our
reputation, from the point of view of
clients, industries, shareholders,
regulators, employees or the general
public, which may lead to potential
financial losses and / or loss of market
share.
Reputational risk is considered across
all business activities, transactions and
decisions and includes sustainability-
related reputational risks, such as
greenwashing risk.
We continue to assess the design of our reputational risk framework
as generally robust in terms of roles and
responsibilities, escalation requirements, and review and approval authorities for sustainability-related
risks.
Relevant sustainability-related standards have been set, including for the
appropriate consideration of high
inherent reputational risks, by leveraging existing firm-wide risk identification
and review and approval processes.
Our 2030 lending sector decarbonization targets for specified
sectors at Group level come with agreed
contributions by the individual business divisions (BDs)
for the corporate lending sectors.
To monitor and control the utilization of the BDs’ contributions toward the 2030
corporate lending sector
decarbonization targets, a decarbonization control framework was operationalized in 2024,
with defined
thresholds per sector and business division and at Group
level. These thresholds are defined annually and the
utilization against the agreed thresholds is monitored on a quarterly
basis.
Additionally, a material transaction, as defined in the credit approval process, within in-scope business activities
is
subject to the pre-deal assessment process. The first line of defense is responsible for
identifying and referring an
in-scope transaction to the second line of defense sustainability
function for a detailed assessment. Based on
the
calculated utilization level, a transaction is subject to the defined
approval path.
We manage and escalate
material climate-related risks,
in accordance with our
standard financial and
non-financial risk
processes and
defining key responsibilities
and tools,
both at the
Group level
and across our
business divisions. To
facilitate
the implementation
of consistent risk
management practices
across the Group,
we have
conducted climate-risk-related
training for employees across the business divisions and Group functions.
Sustainability Report 2024
| Managing sustainability and climate risks
97
Risk reporting and disclosure
Sustainability and climate
risk considerations are
an integral part
of topics included
in our quarterly
risk reporting cycle.
Information exchanged during this process includes the number of transactions referred to the sustainability and climate
risk
unit
with
outcomes
and
underlying
reasons,
and
an
associated
breakdown
by
category.
The
report
includes
information on
exposure to
climate-sensitive sector
activities (our
climate-related risk
heatmaps and
climate risk
rating
models), leveraging
a fully
automated
process. The
heatmaps and
climate rating
models are
also included
in quarterly
internal risk reports for key legal entities and business divisions.
For external climate-related
risk reporting, we
have prepared our
annual disclosures
across the key
areas recommended
by the Task Force on Climate-related Financial Disclosure.
The automated reporting
capabilities for
climate-related risk
were enhanced to
include combined
(legacy- UBS
and legacy-
Credit Suisse)
Group-wide climate
risk views
for internal
and external
reporting. In
addition, the
outputs of
the CRRM
have been implemented
to generate year-end
2024 metrics for further
granularity. Internal and
external climate-related
risk metrics will continue to evolve in the coming years, as a part of
our sustainability and climate risks roadmap, to meet
regulatory expectations and ensure leading practices in this area.
›
Refer to the “Sustainability and climate risk
policy framework” section of the Supplement
to the UBS Group Sustainability Report
2024, available at
ubs.com/sustainability-reporting,
for more information
Sustainability Report 2024
| Managing sustainability and climate risks
98
Our investment management approach to
sustainability and climate risks
Assessing climate-related financial risks in client portfolios
As a global financial
institution, we help
our clients navigate
the challenges of the
transition to a
low-carbon economy.
We address
this by
establishing
climate
risk monitoring
and management
systems across
our Asset
Management
and
Global Wealth
Management
business divisions,
offering innovative
products and
services in
investment and
financing,
and providing transparent reporting and disclosures.
We strive to integrate
climate-related financial risk
considerations into our
decision-making and
processes pertaining to
services, strategies
or products
offered or
employed by
third parties,
including delegates.
In doing
so, we
demonstrate
our commitment to
implementing the recommendations
of the Task
Force on Climate
-related Financial Disclosures
(the
TCFD). We perform
climate risk
assessments on
discretionary portfolios
managed in
Singapore and
in-scoped collective
investment
schemes
managed
in
Hong
Kong,
respectively,
in
line
with
the
Monetary
Authority
of
Singapore
(MAS)
Guidelines on Environmental Risk Management for Asset Managers and
the Securities and Futures Commission of Hong
Kong (SFC) Climate Risk regulations.
We also disclose portfolio risk
across climate scenarios in the
UK, in line with TCFD
recommendations.
›
Refer to the “Specific climate risk disclosure for
client investment assets in Singapore and Hong
Kong” section and to the “UK
climate and sustainability disclosures” section of the Supplement
to the UBS Group Sustainability Report 2024, available
at
ubs.com/sustainability-reporting,
for more information
We
work
across
our
industry
and
with
our
clients,
ensuring
they
have
access
to
best
practice,
robust
science-based
approaches, standardized methodologies and quality data for
measuring and mitigating climate risks.
In the following sections,
we outline the UBS approach to
quantifying climate risk in clients’ assets
as well as how climate
risk information is applied to Asset Management and Global
Wealth Management.
Quantifying climate risk: data and metrics
In
order
to
evaluate
climate
risks
at
issuer
level,
we
utilize
physical
and
transition
climate
risk
data
from
various
data
providers.
Physical
climate
risk
arises
from
the
impact
of
weather
events
and
long-term
or
widespread
environmental
changes.
Higher levels of
physical risks imply
higher probability
of an issuer
or direct assets
being impaired
in value. Our
physical
risk assessment considers
the potential impact
of extreme climate
events on an
issuer’s assets or
our direct assets,
with
each physical risk score representing a sensitivity-adjusted,
weighted average of risk scores linked to all associated assets
across different climate hazards, such
as heat / cold waves, water stress,
flooding, sea level rises, hurricanes,
wildfires and
drought.
Transition risk arises
from the process
of adjusting to
an environmentally sustainable
economy, including changes
in public
policies,
disruptive
technological
developments
and
shifts
in consumer
and investor
preferences.
One
of the
ways we
assess transition
risk
is
by
using
a
“carbon
earnings
at
risk” approach,
which
analyzes
the
unpriced
carbon
cost
to a
company as a
percentage of its
earnings before interest,
taxes, depreciation and
amortization (EBITDA).
We see carbon
earnings at risk as one of the more directly quantifiable and comparable metrics across industries globally, which is more
suitable for reflecting the reach and complexity of our investments.
For both physical and transition
risks, the projections are
typically built upon publicly reported
company data, restricting
coverage
to
corporate
issuers,
which
form
the
bulk
of
our
public
markets
portfolios.
Consequently,
exposures
to
sovereigns or structured products, for example, are not covered
at this point.
Climate risk data remains an evolving area, and best practice standards or norms are still being developed. This results in
acknowledged limitations in data coverage and
quality, such as issuer
type and the use
of proxy or estimation
techniques.
Financial models also typically
project up to three
years into the future,
with significant deterioration
in visibility beyond
one year. As such, long-term projections used to generate
data, even for 2030, may have limited accuracy.
We work closely with our
data providers to continuously
enhance the scope and quality
of data available to us.
Climate
risk data
continued to
improve over
2024, including,
for example,
improved financial
integration and
market-adjusted
carbon price
assumptions. As
our data
providers continue
to improve
on their
data methodology
and coverage,
in line
with industry best practice, these changes may be reflected
in climate risk analytics on the client portfolios we
manage.
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Application in Asset Management
Asset Management’s
ESG
(environmental,
social
and
governance)
integration
approach
identifies
climate-related
risks
and
opportunities
that
can
be
applied
in
managing
existing
investment
strategies
and
constructing
new
portfolios.
Portfolio construction criteria are
applied based on the intended
objectives of the given strategy.
Portfolios are classified
based
on
their
sustainability
characteristics,
including
sustainability-related
key
performance
indicators
and
minimum
sustainability safeguards. Exclusion criteria address elevated sustainability risks and the
scope of portfolios to which such
exclusions
are
applied
is
described
in
the
Asset
Management
exclusion
policy.
The
investment
policies
in
fund
documentation
describe
the
extent
to
which
a
strategy
targets
particular
risk
or
opportunity
outcomes.
Asset
Management
discloses
various
climate-related
metrics
in
line
with
the
TCFD’s
Supplemental
Guidance
for
Asset
Managers. We publish aggregated figures for total emissions, carbon footprint and
weighted average carbon intensity in
the “Environment” section of this report. Asset
Management includes disclosure of portfolio-level metrics for sustainable
investment portfolios in its fund factsheets and in client reporting.
In
Asset
Management,
our
overall
strategy
for
managing
climate
risks
is
to
integrate
risk
data
and
insights
into
our
investment management
processes. In
our public
markets investments,
this begins
with assessing
ESG issues
based on
our ESG
material issues
framework.
This identifies
the most
relevant issues
by sector,
making the
connection with
key
value drivers that may
impact the investment
thesis across sectors.
Our ESG material
issues framework reflects
a sector-
based view of exposures to
physical and transition climate risks. Our
climate risk assessment also uses issuer-level
physical
risk data
for a
range of
climate hazards,
and transition
risk data
assessing exposure
to changes
in carbon
pricing. This
assists with identifying issuers with higher levels
of risk, which are then subjected to
qualitative assessment,
including the
location and business
segments at risk,
and mitigation,
including board oversight,
company risk assessment,
mitigation
and adaptation actions, and
engagement with suppliers,
customers and local stakeholders.
This climate risk assessment
is an
additional
consideration
in the
overall
assessment
of the
sustainability
performance
of the
issuer,
which
informs
investment decisions.
In our Global Real Assets business,
we consider key transition risks using our proprietary,
in-house ESG dashboard,
which
assesses the
environmental performance of
directly controlled
real estate assets
against pathways
and targets.
Assessment
of
transition
risk
using
the
International
Energy
Agency
framework
is
applied
for
some
of
our
direct
infrastructure
investments. On
the physical
risk side,
for our
direct investments
in both
real estate
and infrastructure,
we use
a third-
party
location
risk
intelligence
tool
to
analyze
asset-level
physical
risk.
We
also
use
third-party
data
to
inform
our
assessment of physical risk in our indirect real estate investments.
These tools identify each asset’s potential physical risks
under a variety of climate change scenarios and timelines.
Active ownership
The
transition
of
investment
portfolios
will
require
real-economy
emission
reductions.
We
see
our
active
ownership
strategy as a powerful tool in influencing corporate and
other stakeholder behavior to achieve real-economy
outcomes.
Asset
Management
has
had
a
dedicated
climate
engagement
program
in
place
for
more
than
five
years,
addressing
climate-related
risks
in
companies,
with
measurable
progress
tracked.
It
covers
high-emitting
companies
in
our
listed
equity and
corporate bond
universe, taking
into account
a range
of sectors
and geographies.
This includes
companies
from the oil and gas, electricity and other utilities, metals and mining, construction materials, and chemicals sectors. The
program
is
focused
on
driving
ambitious
and
credible
transition
strategies
across
portfolio
holdings.
It
covers
climate
governance, targets, transition plans
and relevant business model
objectives. Since the start
of our engagement
program,
we have increased the
range of our
expectations to include more
ambitious emissions reduction target setting,
quantified
disclosures on
decarbonization
actions, capital
deployment
in line
with a
net-zero pathway,
and reporting
of progress
toward stated commitments.
In our Global Real Assets business we typically hold a majority in our direct real assets, and thus it is possible to
positively
influence
outcomes
through
active
ownership;
this
includes
collaboration
with
tenants,
third-party
companies,
employees, communities
and other
stakeholders (via,
for example,
green lease
clauses, tenant
satisfaction surveys
and
tenant reach-outs)
to drive
and achieve
emission reductions
and other
climate risk
mitigations. Where
we do
not have
control,
we
actively
engage
with
owners
and
stakeholders
to
address
climate-related
risks
and
monitor
progress
accordingly. This
engagement
includes physical
risk exposure
and mitigation,
transition plans,
disclosures and
net-zero
alignment.
Application in Global Wealth Management
Our overall
investment
decision-making
process
is largely
driven
from the
top. Although
corporate-level
data
sourced
from
S&P
Global
has
been
chosen
for
Global
Wealth
Management
portfolios,
given
its
credibility,
complexity
and
coverage, this bottom-up dataset cannot be
directly integrated into Global Wealth
Management’s investment processes
without the use of significant aggregation and proxies.
Considering the above, at this point in time climate
risk analyses
are not used to inform investment decisions at either the asset allocation or the instrument selection levels within Global
Wealth
Management,
due
to
investment
scope,
limitations
of
data
availabilities,
modeling
uncertainties
and
implementation hurdles. We actively monitor industry best practice and data
developments to ensure we are prepared to
further integrate climate risks into core investment processes, should
these bottlenecks be resolved. In the meantime, we
continue to review implied climate risk in our portfolios and continue to make progress on capacity building and making
climate risk assessment findings available across the investment
value chain.
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Industry engagement
Most of
our discretionary
portfolios consist
of investment
funds from
third-party
fund managers,
including UBS
Asset
Management,
which runs independent processes.
Generally,
Global Wealth Management
acts as an asset allocator
and
manager of these portfolios, but it does
not control portfolio construction and
management within the underlying fund
investment
solutions.
Therefore,
in
addition
to
developing
a
climate
risk
assessment
management
framework
for
portfolios
based
on
underlying
investment
holdings,
we
aim
to
understand
the
climate
risk
management
practices
established by the managers of the underlying funds.
To
that
end,
we
regularly
ask
investment
fund
partners
of
approved
investment
funds
for
information
about
their
approach to climate
risk issues, including the
extent to which climate
risk management processes
have been developed
and
implemented
within
their
businesses,
with
relevance
to
frameworks
such
as
TCFD
and
the
MAS
Guidelines
on
Environmental
Risk
Management
for
Asset
Managers,
where
required
by
relevant
regulators.
We
are
committed
to
continuing regular communication with
our fund partners
about the development of
climate risk management
processes,
as relevant to their strategies.
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101
Appendix
Appendix 1 – Governance
Sustainability governance at Credit Suisse
Sustainability governance at Credit Suisse
Active sustainability governance bodies (as of 31 December
2024)
Governance body
Lead
Meeting frequency
Purpose and responsibilities
Sustainability
Classification Forum (SCF)
(formerly Sustainability
Classification Committee)
Co-chaired by Chief
Sustainability Office
(CSO), GWM CIO IM,
AM SI
Ad hoc (approx.
monthly)
Sustainability Classification Committee (SCC)
transformed into a forum
(SCF) in July 2024 to align with UBS Group Governance
Standards
Governing body of the Credit Suisse Sustainable
Investment
Framework, oversees the investment product sustainability
classification
Amended governance with escalation
path into UBS since January
2024
Retired sustainability governance bodies in 2024
Governance body
Lead
Meeting frequency
Purpose and responsibilities
ESG Disclosure and
Reporting Committee
(retired in September
2024)
Co-chaired by CFO
and CSO
Ad-hoc as required
1H24 meetings:
2
Retired in September 2024, and responsibilities integrated
into UBS
governance, controls and procedure
Provided oversight to ensure that appropriate levels of control and
governance were in place for Credit Suisse’s ESG
disclosures
Amended governance with escalation
path into UBS since March
2024
Green Finance Committee
(retired in June 2024)
Chaired by CSO
Ad-hoc as required
1H24 meetings: 1
Retired in June 2024, as the underlying framework
was
decommissioned with Credit Suisse Green Liabilities
having been
absorbed by the UBS Green Funding Framework
Acted as the governing body of the
Green Finance Framework and
oversaw the issuance of green finance products and green
asset pool,
and the reporting related to green issuances
Amended governance with escalation
path into UBS since December
2023
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Key policies and principles
Sustainable finance
Name of policy
Description
Group Sustainable
Investing Policy
Defines the minimum standards to address transparency around
sustainability-related investment product and / or service classification
and corporate
and financial disclosure. Applicable to all UBS employees globally involved
in the processes of manufacturing, distributing, labeling,
marketing or
promoting investment products or services that are positioned
as sustainable investing, which are sold or provided
to clients.
The policy provides a
basis for ensuring that environmental, social and governance
(ESG) or sustainability-related statements, declarations, actions or communications made
by UBS can be substantiated and consistently
communicated so as to protect UBS and / or its clients.
The owner of this policy is Group Sustainability and Impact (GSI).
Sustainable Finance
Guideline
These guidelines set Group-wide minimum requirements when labelling,
marketing and distributing sustainable financing, green equity, carbon and
environmental market instruments.
The owner of these guidelines is Group Risk Control (GRC).
Carbon and
Environmental Markets
Guideline
Regulatory compliance
Data privacy and data ethics
Name of policy
Description
Group Data Protection
Policy
Describes the minimum global standards for processing personal
data in accordance with data privacy laws and regulations. This
policy applies to
all staff involved in personal data (i.e. all information relating to an
identified or identifiable natural person) processing activities globally. This
includes information relating to UBS clients, prospects, UBS employees and candidates.
The owner of this policy is Group Compliance, Regulatory & Governance (GCRG).
Group Data Ethics Policy
Sets out UBS’s data ethics principles and requirements, in line with the Code of Conduct and
Ethics of UBS. This policy, which applies to all UBS
staff globally involved in data processing through artificial
intelligence and / or data analytics involving client-identifying
data and / or personal
data, provides the framework to identify, manage and control data usage by UBS in an
ethical and responsible manner.
The owner of this policy is GCRG.
Client and product suitability
Name of policy
Description
Group Suitability
Principles
Sets out the principles that UBS applies in assessing the
suitability of financial products and services and
transactions sold to or entered into with
clients in order to achieve regulatory compliance and consistency
of approach across business divisions in making such suitability
assessments. This
Group-wide policy also sets out the principles that UBS applies
in assessing the suitability of financial products and
services to always be regulatory
compliant and act in the best interests of our clients. The principles underpin the divisional
suitability-
and product-related policies.
The owner of these principles is GCRG.
Access to products and services
Name of policy
Description
Guideline on Client
Vulnerability
Ensures that, in order to deliver excellent client experience
for all types of clients, staff understand how to identify and
respond to client vulnerability.
This is because a client’s abilities or decision-making may be impaired compared to their
usual situation or compared to other clients. This guideline,
which applies to all roles in Global Wealth Management (GWM)
and Personal & Corporate Banking (P&C), helps to ensure that clients
with a
vulnerability are treated appropriately and fairly.
The owner of this guideline is GCRG.
Web Accessibility
Guideline
Ensures that electronic documents and information
available on the web can be accessed and used by people with disabilities
and that all web
content managed by Communications and Branding, Marketing Platforms (C&B, MP), such
as websites and web applications,
are free of barriers that
limit access for people who are blind, have low vision, are deaf
or hard of hearing, have mobility disabilities or experience
other types of disabilities.
The owner of this guideline is Group Human Resources and Corporate Services
(GHRCS).
Digital Accessibility
Guidelines
Offers standards for all UBS digital platforms and provides guidance
on the scope, requirements and the accessibility evaluation operating model to
follow. These include UBS Digital Accessibility Technical Standard; UBS Digital Accessibility Handbook;
WMPC Digital Accessibility Guide.
Global Inclusive
Accessibility Standard
Describes the design principles and standards that should
be applied to all premises Group-wide to deliver physical
accessibility. This relates to UBS’s
commitment to removing physical barriers across locations
and improving accessibility for everyone, frequently going beyond compliance
and
exceeding the local disability laws and standards that
are already in place.
The owner of this standard is GHRCS.
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Responsible marketing practices
Name of policy
Description
Group Marketing
Communications
Governance
Prescribes, based on the UBS Brand Policy, the overall approach to producing and using marketing communications, clarifies roles and
responsibilities,
outlines processes and controls that must be adhered to
and offers supportive tools. These guidelines are intended to ensure effective
and efficient
cooperation among the various stakeholders.
The owner of this document is GHRCS.
GWM and P&C Policy on
Marketing Materials
Helps to ensure that any reputational, legal, regulatory or
liability risks arising from the use of marketing material are appropriately
and consistently
addressed by GWM and P&C, and all employees producing or using marketing material
for distribution to the UBS Group entity’s clients, or prospects
or any third party. That means,
among other things, enabling UBS to comply with its obligations
to provide existing and potential clients with
information that is fair, balanced, clear and not misleading and to have adequate controls
in place that ensure consistent adherence to the respective
standards.
The owner of this policy is GCRG.
AM Marketing
Communications Policy
Establishes common principles on the identification of marketing communications
and ensures that marketing communications created and used by all
AM employees globally are clear, fair, balanced and not misleading.
The owner of this policy is GCRG.
IB Marketing Materials
Global Policy
Provides information for all producers and approvers of IB
marketing materials on their content,
including minimum standards, country-specific
content and issues that need to be escalated to IB C&ORC and /
or Group General Counsel (GGC).
The owner of this policy is GCRG.
Market Conduct Policy
Sets out our minimum expected standards for market conduct, providing
guidance on prohibited conduct and conduct requiring
escalation. Addresses
greenwashing or ESG risks by setting minimum standards for
all communications by the IB and Non-core and Legacy (NCL).
When making an ESG or
sustainability claim about an investment product, fund
or company’s financial instruments or the company and its products and services, there should
be relevant, sourced and credible evidence to back the claim up. Additionally,
when referencing a third-party product (e.g. ESG index, externally
issued green bond), it must be ensured that the ESG or sustainable
characteristics of such a product can be clearly set out, including
how an investor
can obtain more information about the index or asset.
The owner of this policy is GCRG.
Climate and nature
Name of policy
Description
Group Sustainability and
Impact Strategy &
Governance Document
1.1.1
Provides an overview of the sustainability and impact strategy
and governance at UBS,
including the description of our sustainability and impact
strategy and related key activities, our aspirations and goals and progress toward them, relevant governance bodies
and key roles in the
organization, along with key topics and working groups related to sustainability
and impact. A key topic within this document is our approach to
climate. It outlines our ambition to support clients through the world’s transition to a low-carbon economy
and embed considerations of climate
change risks and opportunities across the bank for the benefit
of our stakeholders. The framework is subject to regular audits by Group Internal
Audit.
The owner of this policy is GSI.
Sustainability and
Climate Risk Policy
Framework
Sustainability and climate risk (SCR) is defined as the
risk that UBS negatively impacts, or is impacted by, climate change, natural capital, human
rights and other environmental and social matters. Group Risk Control
(GRC) is responsible for our firm-wide SCR policy framework and
the
management of exposure to sustainability and climate (financial)
risks on an ongoing basis as a second line of defense, while GCRG monitors
the
adequacy of our control environment for non-financial risks, applying independent
control and oversight.
The owner of this policy framework is GRC.
Responsible Supply
Chain Management
(RSCM) Framework
1.1.2
Is based on identifying, assessing and monitoring vendor
practices in the areas of human and labor rights, the environment, nature, health and safety
and anti-corruption. Central to our RSCM framework is the RSCM Policy, to which our direct vendors
are bound by contract and which sets out UBS’s
expectations toward vendors and their subcontractors regarding legal compliance,
environmental protection, avoidance of child and forced
labor,
non-discrimination, diversity, equity and inclusion, remuneration, hours of work, freedom
of association, humane treatment, health and safety, anti-
corruption measures, and whistleblowing protection for employees. In 2024, this framework
was rolled out to also cover Credit Suisse.
1.1.3
The owner of this framework is GHRCS.
Client experience
Name of policy
Description
Clients Complaints
Handling (GWM and P&C)
Outlines the principles and minimum standards
for handling client complaints in GWM and P&C by all staff
in these divisions who either receive or
are involved in the handling of complaints received from clients
or prospects. Client complaints serve as an early warning indicator for
problems
with a service or product offered and, when professionally
applied, can improve client retention and make the relationship stronger.
The owner of this policy is Global Wealth Management.
AM Complaints
Management
Sets out principles for the handling of client and / or investor
complaints that Asset Management (AM) expects
its employees to adhere to. Client
and / or investor complaints are an important source of information
on AM’s products and services. The policy, which applies to all AM employees,
articulates the requirements to identify, record, investigate and respond promptly
to complaints and outlines standard principles for recording,
processing and reporting AM complaints.
The owner of this policy is GCRG.
IB & Non-core and Legacy
(NCL) Policy on Client
Complaints
Sets out principles for managing Investment Bank (IB) client complaints
so they can be captured consistently and are therefore
reportable to
management and to regulators, if applicable. It applies to all UBS IB and IB-aligned
employees,
including NCL employees, consultants and
temporary employees interacting with clients and prospective clients
on UBS products or services.
The owner of this policy is GCRG.
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Cyber und Information Security
Name of policy
Description
Cyber and Information
Security Policy
Defines the Cyber & Information Security (CIS) mandate across
the firm. CIS is a firm-wide business risk management
responsibility. Failure to secure
UBS’s information and services against the risk posed by CIS threats could severely
impact clients, constitute a breach of laws and regulations and
negatively affect the reputation, brand and financial stability of
the firm. The CIS principles established in this policy, which applies to all UBS
persons accessing or owning UBS information and IT assets, set the firm-wide
minimum baseline requirements necessary for meeting
key
operational, legal and regulatory requirements. Additional requirements may
be established by business divisions and Group functions
as necessary
for achieving the goal of CIS.
The owner of this policy is Group Operations and Technology Office (GOTO).
GenAI Cyber and
Information Security
(CIS) Guideline
Documents the firm-wide Generative AI (GenAI) Security Framework,
including control requirements to mitigate cyber and
information security (CIS)
risks associated with the adoption of GenAI solutions. It provides detailed implementation
guidance and covers GenAI applications operated in-
house or within third-party solutions.
The owner of this policy is GOTO.
Employees
Name of policy
Description, scope, accountability, pertinent third-party standards or initiatives
Employee Assistance
Program (EAP)
Provides confidential individual support to permanent
UBS employees (and where applicable to household
and / or family members) with any
personal or work-related issues that may affect their well-being.
The owner of this policy is GHRCS.
Employee Handbooks
Provides information on the policies, practices, procedures and benefits applicable to a specific
location or country. Where applicable, employee
handbooks (along with a contract / offer letter and, if applicable, personnel
regulations) are the principal sources of information on
the terms and
conditions of employment and applicable HR programs, policies and procedures. Subject to
local legal requirements, failure to comply with any of
the requirements of the relevant employee handbook may result in disciplinary
action, up to and including dismissal.
The owner of the handbooks is GHRCS.
Employee Incidents
Policy
Sets out the principles for assessing breaches of UBS policies
in a consistent manner. All UBS persons as defined by the policy are expected
to
comply. All UBS policies are in scope, unless defined by the respective Chief Operating Officer
as out of scope and approved by the GCRG
Employee Incidents team. The scope of UBS policies will be applied to the
Credit Suisse policies that have not yet been integrated.
The owner of this policy is GCRG.
Employment of Staff
within UBS Policy
Applicable to all UBS employees, this policy establishes minimum hiring
and employment standards and provides fair, consistent and transparent
treatment of employees, while taking account of local legal and market practice requirements and shareholder
interests. Where applicable, the
policy is supplemented by Employee Handbooks providing
local information and clarification. Breaches may be dealt
with in line with
the Employee Incidents Policy and could result in disciplinary action, including
dismissal, in serious cases.
The owner of this policy is GHRCS.
Global Block Leave
Policy
Applicable to all UBS employees and UBS external staff as
required by their role or legislative requirements, this policy ensures that
all employees
are aware of their block leave requirements to mitigate fraud risk
and to meet local legislative requirements.
The owner of this policy is GHRCS.
Global Staff Vetting
Policy
Defines the global minimum standards for background checks
to be undertaken during onboarding for all members of staff and provides
requirements for periodic re-vetting of existing staff. These global mandatory standards guarantee a globally
consistent vetting approach for UBS
staff. Non-compliance may have a negative impact on legal, regulatory, financial or reputational risks. The policy outlines who (UBS
third-party
vetting vendors, suppliers) is accountable for conducting the checks. HR and other functions
are engaged, as needed, to ensure any adverse
findings or policy changes are within UBS’s risk appetite.
Group Investigations
Policy
Sets out the framework for the conduct and governance of all internal
investigations of actual, alleged or suspected breaches of
law, regulation or
policy involving UBS and / or its employees.
The owner of this policy is GCRG.
Group Physical Security
Policy
Defines the physical security governance structures, principles and high-level
measures that ensure UBS people, information, infrastructure,
valuable assets and business operations are effectively protected from
physical security threats that may otherwise cause loss, damage or harm.
Failure to effectively mitigate the risks posed by security threats could
impact clients and staff, constitute a breach of laws or regulations and
negatively affect the firm’s reputation, brand or financials. Breaches of policy may be dealt with in
line with the Employee Incidents Policy and
could result in disciplinary action, including dismissal.
The owner of this policy is GCRG.
Group Policy on Conflict
of Interest
Sets out the principles, minimum requirements and roles and responsibilities
that all UBS staff must adhere to in identifying, preventing,
escalating
and managing conflicts of interest (CoI). This policy covers all UBS persons
internal and external staff and any other individuals
who provide
services for UBS.
The owner of this framework is GCRG.
Health and Safety
Statement
Details UBS’s commitment to a working environment that protects the health, safety
and well-being of all employees, contractors, clients and
visitors on UBS premises.
The owner of this statement is GHRCS.
Mandatory Learning
Policy
Covers topics important for all staff and for the firm, and
all staff must complete the modules assigned to
them by the due date.
Non-completion or failure to complete in a timely manner is systematically
tracked and subject to an escalation and disciplinary process.
The owner of this policy is GHRCS.
Total Reward Principles
Underpins UBS’s approach to compensation and defines UBS’s compensation framework. These principles apply to all employees
globally (with
variations in certain locations due to local legal requirements, regulations and
practices) and are periodically reviewed and approved by
the
Compensation Committee. The principles are fully aligned with our strategy and our three
keys to success.
In the short to medium term, they also
enable UBS to drive the economic and cultural integration of Credit Suisse
and the long-term value creation of the combined firm.
The owner of these principles is GHRCS.
Whistleblowing
Protection for
Employees
Establishes dedicated whistleblowing channels for UBS
employees to raise concerns in a safe, confidential and, if preferred, anonymous
way
without fear of retaliation. It applies to the UBS employees,
all business divisions and Group functions, all regions and all UBS entities, including
their branches and representative offices.
The owner of this policy is GCRG.
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105
Appendix 2 – Social
Regulatory compliance
How we ensure suitability
Clients expect
to be
provided with
products and
services that
are suitable
for them.
This is
particularly the
case in
the
business divisions,
where
we serve
personal clients
as opposed
to institutions.
In nearly
all the
countries where
we do
business, this expectation
has been turned
into a legal
or regulatory
requirement for
banks acting as
financial advisors.
Most jurisdictions
also require
systematic assessment
and documentation
of the
suitability of
products (including
third-
party
products)
and
services,
including
compliance
with
applicable
eligibility
criteria,
investment
preferences
(e.g.
sustainability
criteria)
and
sales
restrictions.
These
standards
are
reflected
in
local
policies
and
procedures
and
in
the
respective
local
control
framework.
The
European
Union’s
Markets
in
Financial
Instruments
Directive
and
the
Swiss
Financial Services Act are examples of how we reflect and implement specific standards required
by regulators as part of
a local control framework. Other locations apply
similar standards as required by the relevant
local regulators.
To meet both client
expectations and regulatory requirements, we have
established comprehensive rules for assessing
the
suitability of
products and
services and
these are
further supported
by regular
training across
the firm.
These rules
are
designed to align the assets in a client’s portfolio with their defined risk profile, and the client is advised in line with
their
needs
(i.e.
client
suitability).
In
addition,
the
rules
require
product
documentation
to
contain
appropriate
and
easily
understandable information
on the
product’s features,
target audience
and the
scenarios in
which the
product can
be
used, along
with a
balanced representation
of the
associated
opportunities
and risks
(i.e. product
suitability).
We also
recognize
the
importance
of
fair
and
transparent
marketing
of
our
products
and
services
and
have
internal
policies
supporting their responsible sale and marketing.
Suitability framework
In
our
Global
Wealth
Management
and
Personal
&
Corporate
Banking
business
divisions,
a
comprehensive
suitability
policy framework is in place and is
reviewed on a yearly basis. This sets out the structured advisory process governing the
way we advise
and implement
agreed solutions
and also
documents the
steps taken during
this process.
In addition to
other purposes, it includes requirements
for monitoring and controlling activities that
aim to capture tail risks.
Our Investment Bank and Asset Management business
divisions take their guidance from UBS’s suitability
principles and
have implemented processes and policies to ensure appropriate
oversight of suitability requirements where applicable.
In our framework,
we distinguish between client
and product suitability. Client
suitability refers to
the alignment between
the investor profile of the client and the products
and services that are recommended or
made available to the client (or
already held
in the client’s
portfolio), including
risk information
and disclosure.
Product suitability
refers to
a consistent
set of standards applied by a product management unit to define
which specific investors a product may be suitable
for.
Client suitability
Global Wealth Management and Personal & Corporate Banking have established a structured advisory process with four
distinct steps:
understand, propose,
agree and
implement, and
review.
This process
is supported
by a
number of
tools
and forms
that are
available to
client advisors.
In the
first step
(understand),
these forms
and tools
support
the initial
identification of a
client’s investor profile, including
but not limited
to investment objectives, risk
tolerance and risk ability.
In the further steps, they help client advisors match a client’s investment
strategy with appropriate investment proposals
(propose) and agree with the client on
the implementation, such as providing mandatory documentation and
signing the
necessary agreements
(agree and implement).
Furthermore, the
established tools and platforms
also support the
fourth
step (review). The Investment Bank and Asset Management have established cross-functional governance committees to
ensure oversight for client suitability where
specific criteria or triggers are met.
Product suitability
Advisory platforms and tools divide
products according to their risk characteristics
and, in doing so, help
clients and client
advisors to
properly assess
the impact
of investment
products and
services on
a client’s
portfolio. Additional
processes
are
in
place
to
make
product
documentation
available
to
both
client
advisors
and
clients.
Finally,
specific
legal
documentation is required for certain products
with specific risks (e.g. hedge funds).
Divisional approach to suitability
Primary ownership of suitability risk and the responsibility for addressing it rests
with the business. The suitability policies
applicable to Global Wealth Management,
Personal & Corporate Banking, the Investment
Bank and Asset Management
make
this
clear.
Accordingly,
we
have
pursued
a
divisional
approach
to
ensure
compliance
with
rapidly
changing
regulatory regimes,
while also addressing
particular suitability obligations
and remediation of
identified gaps relating
to
the business divisions.
Monitoring and controls
Monitoring
and
controls
for
suitability
follow
a
three-tiered
approach.
The
first-level
controls
are
conducted
by
the
business risk management
team under its origination
control framework, a set
of controls designed to
prevent and detect
operational risks that arise within the front unit
and to ensure that residual risk corresponds
to risk appetite.
Sustainability Report 2024
| Appendix 2 | Social
106
The second-level controls are
performed by Compliance
& Operational Risk
Control as global
minimum control standards,
which are
part of
the overall
operational risk
framework.
These controls
focus on
both a
check-the-checker
approach
and thematic deep-dive reviews. The third-level
controls are exercised by Group Internal Audit as part
of its annual audit
plan.
After-sales communications
The UBS client experience also includes after-sales communication. Again, this communication is supported by a number
of tools and platforms, including ready-to-use reporting
and presentation material.
Responsible marketing practices
At
UBS,
responsible
marketing
means
our
marketing
materials,
and
materials
from
third
parties
that
we
are
merely
distributing, must
be fair,
clear,
balanced and
not misleading.
Our policies
and guidelines,
across all
business divisions,
ensure that marketing
materials provided to
our clients and
prospects adhere
to both regulatory
requirements and
UBS
standards on
marketing communications.
Our aim
is to
have a
globally consistent
divisional framework
for preparing,
reviewing and approving,
and retaining
marketing materials to
address and
mitigate reputational,
legal, regulatory
and
liability risks.
Accessibility of our products and services
At
UBS,
we
are
committed
to
ensuring
that
all
clients,
including
those
with
vulnerabilities,
have
fair
and
appropriate
access to
our products
and services.
To
deliver an
excellent client
experience for
all types of
clients, staff
are trained
to
know how to identify and respond to
client vulnerability.
Client-facing employees generally have more
client interaction
and therefore are more likely to identify potential vulnerabilities.
1
Our approach to accessibility encompasses both digital
and physical aspects,
and we
continually work to
identify and remove
barriers, ensuring
that our services
and products
meet the needs of our clients, including those with disabilities.
›
Refer to
ubs.com/global/en/legal/accessibility.html
for more information on Accessibility and feedback
options
›
Refer to
ubs.com/global/en/our-firm/our-culture/diversity-and-inclusion/disability-inclusion.html
for more information on our
inclusion initiatives
Digital accessibility
The UBS
internal digital
accessibility guidelines
are based
on the
Web Content
Accessibility Guidelines
(WCAG), which
help us ensure that all people, including
individuals with disabilities, can fully and
independently use our digital platforms
and website.
The WCAG
are developed
by a
working group
of stakeholders,
including experts,
regulators, academics,
and businesspeople worldwide, who capture vulnerable
clients’ interests and needs by proxy.
›
Refer to WCAG for more information, available at
w3.org/TR/WCAG22
In 2024,
we
led an
engineering
Hackathon
featuring
digital accessibility
as a
key
category
where
over
300 engineers
globally developed cutting
edge solutions
that promote accessibility
and inclusivity. The
winning project is
underway to
be implemented and will support visually impaired users by turning
images and graphs into spoken text.
Physical accessibility
We
are
committed
to
removing
physical
barriers
across
our
locations,
frequently
exceeding
local
disability
laws
and
standards. Our Global Inclusive Accessibility
Standard outlines design principles to
ensure that our premises are accessible
to everyone. This commitment is part of our broader
strategy to enhance accessibility and inclusivity in all aspects
of our
operations.
Financial literacy
We view this topic as
mainly relevant in Switzerland,
the only country where
we offer comprehensive financial
products
and
services
to
retail
and
small
and
medium-sized
enterprises
(SME)
clients.
Many
of
our
services
that
contribute
to
enhancing financial
literacy are
therefore limited to
our Swiss clients.
Examples for young
people and students
include:
financial check-ups, saving tips and a budget calculator.
Moreover,
with the
Women’s Wealth
Academy
1
as well
as the
Female
Impact Program
for female
entrepreneurs,
UBS
helps
women
acquire
or
consolidate
extensive
financial
know-how.
Furthermore,
the
UBS
Entrepreneur
Hub
and
the
download center for SMEs include a broad range of publications, documents and resources, such as succession planning
checklists and basic knowledge of business administration topics,
such as accounting, payrolling and payment solutions.
2
Responsible use of AI
The pace of innovation and
emerging technology adoption continues
to accelerate in our industry.
Artificial intelligence
(AI) in particular
is creating an opportunity to
significantly enhance employee efficiency and
reshape how we do
business.
Financial institutions
are finding
ways to
accelerate the
adoption of
AI in
a risk
and regulatory
compliant manner,
and
with ethical and sustainability considerations in place.
1
https://www.ubs.com/ch/en/wealth-management/womens-wealth/mission.html
2
https://www.ubs.com/ch/en/services/digital-banking/marketplace.html
Sustainability Report 2024
| Appendix 2 | Social
107
Managing potential risks to clients
The potential risks
arising from the
use of AI
have been
categorized under various
non-financial risk taxonomies,
including
model risk, privacy, data ethics and records management,
cyber and information security, data management, third
-party
management,
and inter
-entity outsourcing.
These
risks are
addressed
in the
risk frameworks
of the
respective
control
functions, as well as Group Legal, and are reviewed
regularly to ensure completeness, accuracy and that the risks are
up
to date.
In 2024 we
have enhanced
our AI governance
framework and
published the
Group AI
Strategy. The
newly established
AI Operating Committee
and Group AI
Forum support
the use of
AI in a
responsible and
sustainable manner
and also,
we have
guidelines in
place with
details on
how to
identify uses
of AI
that are
prohibited or
considered high
risk and
thus, subject to more stringent controls.
Alongside this, we
have launched a
training on
the responsible use
of generative AI
for all employees
to ensure employees
understand this technology, including how to identify and mitigate risks
to UBS and / or its clients
associated with AI use.
›
Refer to “Emerging Technologies” in the “Our environment” section of UBS Group Annual Report
2024, available under “Annual
reporting” at
ubs.com/investors
, for more information
Data privacy
Handling data
Our data protection policy
framework covers the standards
we commit to when processing
personal data. This includes
a requirement
that data is
processed only for
specific and explicit
purposes and is
adequate, relevant
and not excessive
(data minimization). Other
key principles include
ensuring that data
subjects are informed
of how their personal
data is
processed and that it is
not processed for longer than necessary
for the given processing purposes. UBS
has implemented
processes to respond to data subjects exercising
their rights, while adhering to applicable legal requirements.
We communicate
our client
personal data processing
activities and
seek clients’
consent as required
by applicable
local
privacy law. In these
communications,
we are clear what this
consent means and which use-cases
do not require consent,
for example due to certain legal
obligations. We provide reasonable options
for clients to be able to revoke
this consent
as required.
Key privacy-related information is contained in
client privacy notices published on
ubs.com and translated into the
official
languages of the specific country it applies to.
›
Refer to the document “Cybersecurity, information security and data privacy at UBS”
for more information, available at
ubs.com/sustainability-reporting
, for more information
Sustainability Report 2024
| Appendix 3 | Other supplemental information
108
Appendix 3 – Other supplemental information
Information on non-financial disclosures
Risk evaluation
Pursuant to the requirements of the Swiss Code of Obligations
Art. 964b, this section includes an evaluation of the risks
that have a high probability of potential negative impacts upon
the “aspects” covered by said laws.
Developments in sustainability, climate, environmental
and social standards and regulations
may affect our business and
impact our ability to
fully realize our goals.
We are subject
to separate, and sometimes
conflicting, ESG (environmental,
social and governance) regulations and regulator expectations in the various
jurisdictions in which UBS AG operates. For
example, in
certain jurisdictions,
we are
required to
set diversity
targets or
other ESG-related
goals that
are considered
illegal or contrary to
regulatory expectations in other jurisdictions. In
addition, with respect to decarbonization mandates,
there is substantial uncertainty as to the scope of actions that may be required of us, governments and others to achieve
the goals we have set, and many of our goals and objectives are only achievable with a combination of government and
private
action.
National
and
international
standards
and
expectations,
industry
and
scientific
practices,
regulatory
taxonomies,
and
disclosure
obligations
addressing
these
matters
are
relatively
immature
and
are
rapidly
evolving.
In
addition, there are significant limitations in the data available to measure
our climate and other goals. Although we have
defined and
disclosed
our goals
based on
the standards
existing at
the time
of disclosure,
there
can be
no assurance
(i) that the various
ESG regulatory
and disclosure regimes
under which we
operate will not
come into conflict
with one
another;
(ii) that the current standards will not be
interpreted differently than our understanding
or change in a manner
that substantially increases the
cost or effort for
us to achieve such
goals; or (iii) that additional data
or methods, whether
voluntary or
required by
regulation, may
substantially change
our calculation
of our
goals and
ambitions. It
is possible
that such goals
may prove
to be
considerably more
difficult or even
impossible to achieve.
The evolving
standards may
also require us
to substantially change
the stated goals
and ambitions. If
we are not
able to achieve
the goals we
have
set, or can only do so at significant expense
to our business, we may fail to meet
regulatory expectations, incur damage
to our reputation or be exposed to an increased risk of litigation
or other adverse action.
While ESG regulatory regimes and
international standards are being developed, including
to require consideration of ESG
risks in investment decisions,
some jurisdictions, notably in
the US, have developed rules
restricting the consideration
of
ESG factors in
investment and business decisions.
Under these anti-ESG rules,
companies that are perceived
as boycotting
or discriminating against certain industries may be
restricted from doing business with certain governmental
entities. Our
businesses
may
be
adversely
affected
if
we
are
considered
as
discriminating
against
companies
based
on
ESG
considerations, or if further anti-ESG rules are developed
or broadened.
A major focus of US and other countries’ governmental
policies relating to financial institutions in recent years has
been
on
fighting
money
laundering
and
terrorist
financing.
We
are
required
to
maintain
effective
policies,
procedures
and
controls to detect,
prevent and report
money laundering and
terrorist financing, and
to verify the identity
of our clients
under the
laws of
many of
the countries
in which
we operate.
We are
also subject
to laws
and regulations
related to
corrupt and illegal payments to government officials by others, such as the
US Foreign Corrupt Practices Act and the UK
Bribery Act. We have implemented policies, procedures and internal controls that are designed to comply with such laws
and regulations.
Notwithstanding
this,
regulators
have found
deficiencies
in the
design and
operation
of anti-money-
laundering programs
in our
US operations.
We have
undertaken a
significant program
to address
these regulatory
findings
with the objective
of fully meeting
regulatory expectations for our
programs. Failure to
maintain and implement
adequate
programs to combat
money laundering, terrorist
financing or corruption,
or any failure
of our programs
in these areas,
could
have
serious
consequences
both
from
legal
enforcement
action
and
from
damage
to
our
reputation.
Frequent
changes
in
sanctions
imposed
and
increasingly
complex
sanctions
imposed
on
countries,
entities
and
individuals,
as
exemplified by
the breadth
and scope
of the
sanctions imposed
in relation
to the
war in
Ukraine, increase
our cost
of
monitoring and complying with sanctions requirements and increase the risk that we will not identify in a timely manner
client activity that is subject to a sanction.
The financial
services
industry
is characterized
by intense
competition,
continuous
innovation,
restrictive,
detailed
and
sometimes
fragmented
regulation
and
ongoing
consolidation.
We
face
competition
at
the
level
of
local
markets
and
individual business lines and from global financial institutions that are comparable to us in their size and breadth, as well
as competition from new
technology-based market
entrants, which may not
be subject to
the same level of
regulation.
Barriers to entry in individual markets and pricing
levels are being eroded by new technology. We
expect these trends to
continue and
competition to
increase. Our
competitive strength
and market
position could
be eroded
if we
are unable
to
identify
market
trends
and
developments,
do
not
respond
to
such
trends
and
developments
by
devising
and
implementing adequate
business strategies,
do not
adequately develop
or update
our technology,
including our
digital
channels and tools, or are unable to attract or retain the
qualified people needed.
The
amount
and
structure
of
our
employee
compensation
is
affected
not
only
by
our
business
results
but
also
by
competitive factors and regulatory considerations.
Sustainability Report 2024
| Appendix 3 | Other supplemental information
109
In response
to the
demands of
various stakeholders,
including regulatory
authorities and
shareholders, and
in order
to
better
align
the
interests
of
our
staff
with
other
stakeholders,
we
have
increased
average
deferral
periods
for
stock
awards, expanded forfeiture provisions and, to a more limited
extent, introduced clawback provisions for certain awards
linked to business
performance. We
have also
introduced individual
caps on
the proportion
of fixed
to variable
pay for
the members
of the
Group Executive
Board (the
GEB), as
well as
certain other
employees. UBS
will also
be required
to
maintain and enforce
provisions requiring
UBS to recover
from GEB members
and certain
other executives a
portion of
performance-based incentive compensation in the event that the
UBS Group or another entity with securities listed on a
US national securities exchange, is required to restate
its financial statements as a result of a material error.
›
Refer to the “Risk factors” and “Risk management
and control” sections of our UBS Group Annual Report
2024, available under
“Annual reporting” at
ubs.com/investors
, for more information
Resilience of our UBS’s strategy regarding its capacity
to address material impacts and risks
Identification of material risks
UBS has
a structured
risk identification
process in
place designed
to support
the firm’s
ongoing risk
management
and
control efforts and aligned with global regulatory expectations. The process of identifying the material risks to which our
businesses
at
UBS
are
exposed
is
a
key
component
of
risk
management. A
comprehensive
risk
identification
and
assessment process contributes
to an
enhanced understanding of
the top
vulnerabilities impacting the
organization under
various conditions, enabling management to better capture, measure, monitor and control risk
exposure, as appropriate.
As
part
of
the
risk
identification
process,
risks
identified
as
material
are
then
considered
within
the
risk
coverage
assessment and the development of stress scenarios
,
ultimately being used in the assessment of adequacy
of post-stress
capital levels
and capital
actions as
part of
the Group
internal capital
adequacy assessment.
Climate and
environment
considerations are assessed for their viability as root
causes of potential risks throughout the process.
Resilience of our strategy and business model in relation
to climate change
UBS employs different
tools, assessments and
processes to
identify and manage
climate-related
risks and opportunities
and
understand
the
impact
of
climate
change
on
our
business.
Relevant
outcomes
are
considered
when
annually
reviewing and setting
our sustainability
and impact strategy
and objectives, which
are subsequently
integrated into our
standard financial planning process with
a three-year strategic plan.
By
continuously
assessing
climate-related
risks
and
opportunities
through
various
assessments
and
scenario-based
approaches
and
by
embedding
this
information
into
our
business
strategy
and
financial
planning,
we
continuously
enhance our resilience against climate change.
›
Refer to the “Managing sustainability and climate
risks” section in this report for more information
Integrating climate-related impacts in our financial planning
UBS operates a multi-year
financial planning process.
This process reflects
our business position, corporate
strategy and
prospective economic environment. Sustainability
is a core component of that strategy and planning
process.
At divisional
level, the
underlying
drivers of
our sustainability
investments are
also considered.
These include
our own
corporate
commitments,
regulatory and
other external
requirements, and
client-servicing
opportunities.
The changing
global
outlook
regarding
sustainability,
and
climate
change
in
particular,
is
reflected
in
the
process,
with
the
risks
associated with climate change being reflected in our capital
requirement planning calculations.
Formal guidance on capital
-framework calculations is
subject to ongoing
market and regulatory
discussion, and we
will
continue to reflect this in our planning processes.
Business continuity management
UBS
has
a
business
continuity,
resilience
and
crisis
management
(BCR)
framework
in
place
to
minimize
the
financial,
regulatory,
reputational and market impact of unplanned disruptive events,
including those that are climate-related.
We
conduct regular BCM reviews, which include assessments of potential loss of premises, compromised buildings and data
centers, loss of staff, loss of technology,
loss of third parties and the need for risk mitigation. Department recovery plans
are in
place for
loss of
premises and
loss of
staff incidents
due to
disruptive events,
such as
severe weather
situations.
The
plans
are
not
specifically
climate-related,
but
rather
agnostic
to
the
cause
of
disruption.
Crisis
management
committees
are
trained accordingly
to react
on any
materializing
threat.
A country
risk profiling
process
is in
place
to
identify any location-specific material risks
and plans exist for mitigating
acute weather conditions. In the
case of material
climate-related
exposures,
this
would
be
captured
accordingly.
We
have
conducted
stress
tests
and
climate-related
scenario analyses
to assess
the potential
impacts of
climate-related
physical and
transition risks
on selected
portfolios.
Through our comprehensive business continuity planning and
physical climate risk identification process, we
consider the
risk to our
own physical assets.
UBS is committed
to ensuring continuity
of service for
our clients and
the broader financial
markets.
The
activities
described
in
the
above
paragraph
are
governed
by
the
BCR
framework,
which
ensures
that
the
firm’s
residual
operational
risk
remains
within
risk
appetite.
The
Group
BCR
framework
enables
divisions
and
functions
to
analyze their services
to understand the associated
continuity and resilience risks
and develop effective recovery
strategies
and solutions.
Sustainability Report 2024
| Appendix 3 | Other supplemental information
110
The Group’s main hubs span
APAC (mainly Singapore /
Hong Kong / Tokyo), EMEA
(mainly London / Zurich /
Frankfurt /
Madrid) and the
US (mainly New
York City). Each
of these areas
is assessed for climate
-related threats and
may present
climate
change
risks
in
the
form
of
extreme
weather
conditions
and
the
potential
for
natural
disasters
(earthquakes,
hurricanes, typhoons, tidal anomalies, rising temperatures,
etc.) and increased threat of disease outbreaks. Note that the
legacy Credit Suisse Group
Non-Financial Risks Scenarios
team that performed
global climate scenario stress
testing has
been integrated into
Group Risk Control;
BCR impacts are also
considered in this
context. Where vulnerabilities have
been
identified, additional assessments are carried
out and appropriate planning is put in
place to mitigate the risk of impact.
Key
first
line
of
defense
controls
take
the
form
of
key
procedural
controls
that
monitor
the
overall
conformance
of
divisions and functions to the BCR program and process
controls designed to identify more specific threats.
Non-financial disclosures pursuant to the Swiss Code
of Obligations Art. 964b.
This report
comprises the
“non-financial” disclosures
required for
UBS Group
AG, and
its subsidiaries,
under the
Swiss
Code of
Obligations Art.
964b. These
disclosures can
be found in
the sections
and the
pages indicated
below. The material
topics listed in
the index are
limited to the
matters addressed
by the Swiss
Code of Obligations
Art. 964b. For
material
matters,
we assess
the effectiveness
of our
management
approaches
through
a
number of
measures
as described,
in
particular, in the “Business conduct and corporate culture” and “Key policies and principles
”
sections of this report, and
“Approach to grievances” in the supplementary document
to this report.
›
Refer to the “Supplement to Managing sustainability
and climate risks” section of the Supplement
to the UBS Group
Sustainability Report 2024, available at
ubs.com/sustainability-reporting
, for more information about “Information on UBS
Group
AG pursuant to the Swiss Ordinance on Due Diligence
and Transparency in relation to Minerals and Metals from Conflict-Affected
Areas and Child Labor”
Section in Sustainability Report 2024 (SR
2024)
Page(s)
About this report (including
framework)
About this report
SR 2024 / 6–8
Description of the business model
1
Our sustainability and impact strategy
Our business model
SR 2024 / 29
SR 2024 / 10
–
11
Material risks
Risk evaluation
SR 2024 / 111-112
Non-financial aspects
Section in Sustainability Report 2024 (SR
2024)
Page(s)
Broad thematic issues affecting all
non-financial aspects
The importance of sustainability and culture to UBS
SR 2024 / 4–5
Governance
SR 2024 / 19–23
Key policies and principles
SR 2024 / 105–107
Supporting opportunities
SR 2024 / 75–88
Our key aspirations and progress
SR 2024 / 30–31
Environmental and human rights
matters
Our sustainability and impact strategy
SR 2024 / 29
Our stakeholder engagement
SR 2024 / 12–14
Managing our supply chain responsibly
SR 2024 / 54–56
Environment
SR 2024 / 32–64
Driving social impact
SR 2024 / 70–72
Respecting human rights
SR 2024 / 73
Reducing our own environmental impact
SR 2024 / 47–53
Social and employee matters
Our sustainability and impact strategy
SR 2024 / 29
People and culture make the difference
SR 2024 / 65–69
Anti-corruption and bribery matters
Combating financial crime
SR 2024 / 26
Prevention and detection of corruption and bribery
SR 2024 / 26
–
28
1
Further information on our business model can be found in the UBS Group Annual Report 2024 section “Our strategy,
business model and environment,”available at ubs.com/investors
.
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Key terms and definitions
Sustainability
Commonly defined as “meeting
the needs of
the present without compromising the
ability of future generations to
meet
their own needs“ (United Nations (UN) Brundtland Commission,
1987). In this way,
we sometimes refer to sustainability
to imply a broader scope of resources
that may be exhausted beyond those that impact climate change. Our ambition
is
to conduct business
and operations
without negatively
impacting the environment,
society or the
economy as a
whole
and, through our sustainability disclosure, to
be transparent about how we are pursuing this.
Sustainable Development Goals (the SDGs)
The 2030 Agenda for
Sustainable Development, adopted
by all UN member
states in 2015, provides
a shared blueprint
for peace and prosperity for people and the planet. At its heart
are the
17 UN Sustainable Development Goals
(available
at sdgs.un.org/goals),
the SDGs,
which are
an urgent call
for action
by all countries
– developed
and developing
– in a
global partnership. They recognize that ending
poverty and other deprivations must
go hand-in-hand with strategies that
improve
health
and
education,
reduce
inequality
and
spur
economic
growth
–
all
while
tackling
climate
change
and
working to preserve our oceans and forests.
ESG (Environmental, Social, Governance)
A framework to
help stakeholders understand
how an organization
is managing risks
and opportunities related
to ESG
criteria or factors. It is often used in the context of investing, but – beyond
the investment community – clients, suppliers
and employees are also increasingly interested
in how sustainable an organization’s operations are.
Sustainable finance
Sustainability focus:
strategies that
have explicit
sustainable intentions
or objectives
that drive
the strategy.
Underlying
investments may contribute to positive sustainability outcomes through
products / services / use of proceeds.
Impact
investing:
investment
strategies
that
have
an
explicit
intention
to
generate
measurable,
verifiable
and
positive
sustainability outcomes. Impact generated is attributable
to investor action and / or contribution.
Green, social
and sustainability
loans and
bonds are
instruments made
available exclusively
to finance
or re-finance,
in
whole or in
part, new and
/ or existing
eligible green and
/ or social
projects that form
part of a
credible program from
the borrower / issuer to improve their environmental and
/ or social footprint.
Sustainability-linked loans and bonds
are any types of instruments that
incentivize the borrower’s / issuer’s
achievement
of ambitious,
predetermined
Sustainable
Performance
Targets
(SPTs) that
are measured
using predefined
sustainability
KPIs.
Low-carbon economy
Refers to a
type of decarbonized
economy that is
based on low
energy consumption
and low levels
of greenhouse
gas
(GHG) emissions:
Scope 1: accounts for GHG emissions by UBS.
Scope 2:
accounts
for indirect
GHG emissions
associated
with the
generation of
imported /
purchased electricity
(grid
average emission factor), heat or steam.
Scope
3:
accounts
for
GHG
emissions
resulting
from
activities
from
assets
not
owned
or
controlled
by
the
reporting
organization, but that the organization indirectly impacts
in its value chain.
Net zero: refers to cutting GHG emissions to as close to zero as possible, with any remaining emissions re-absorbed from
the atmosphere.
GHG key vendor: a top
GHG scope 3 emitter relative to
UBS’s overall scope 3 supply
chain emissions and with which UBS
has a long-term ongoing relationship.
Sustainability disclosure
Task
Force
on
Climate-related
Financial
Disclosures
(TCFD):
provider
of
climate-related
financial
disclosure
recommendations designed to help companies provide
better information to support informed capital allocation.
Materiality assessment
The TCFD
requires
companies to
conduct a
double materiality
assessment that
looks at
both the
inside-out impact
the
company
has
on
the
environment
and
the
outside-in
impact
climate-related
activities
may
have
on
the
company
performance.
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Abbreviations frequently used in our sustainability report
A
AMAS
Asset Management Association Switzerland
AML
anti-money laundering
AuM
assets under management
B
BCBS
Basel Committee on Banking Supervision
BD(s)
Business division(s), organizational units of the UBS business: (i) Global Wealth Management, (ii) Personal & Corporate
Banking, (iii), Asset Management and (iv) the Investment Bank
B4SI
Business Investment for Societal Impact
BoD
Board of Directors
BoE
Bank of England
C
CCRC
Corporate Culture and Responsibility Committee
CDP
formerly the Carbon Disclosure Project
CDR
carbon dioxide removal
CFO
Chief Financial Officer
CHF
Swiss franc
CIC
Corporate & Institutional Clients
CIO
Chief Investment Office
C&ORC
Compliance & Operational Risk Control
CSRD
Corporate Sustainability Reporting Directive
D
DAF
donor-advised fund
DJSI
Dow Jones Sustainability Indices
E
EC
European Commission
EMS
environmental management system
ESG
environmental, social and governance
EU
European Union
EUR
euro
ERA
Energy Reference Area
ETF
exchange-traded fund
EY
Ernst & Young
F
FINMA
Swiss Financial Market Supervisory Authority
FTE
full-time employee
FX
foreign exchange
G
GCFO
Group Chief Financial Officer
GCRG
Group Compliance, Regulatory & Governance
GEB
Group Executive Board
GHRCS
Group Human Resources and Corporate Services
GHG
greenhouse gas
GIA
Group Internal Audit
GICS
Global Industry Classification Standard
GOTO
Group Operations and Technology
Office
GRC
Group Risk Control
GRI
Global Reporting Initiative
GSI
Group Sustainability and Impact
H
HR
human resources
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I
ICMA
International Capital Market Association
ICMM
International Council on Mining and Metals
IFRS
International Financial Reporting Standards
IPCC
Intergovernmental Panel for Climate Change
ISO
International Organization for Standardization
L
LEED
Leadership in Energy and Environmental Design
LoD
lines of defense
LTV
loan-to-value
M
MAT
Materiality Assessment Team
M&A
mergers and acquisitions
MiFID II
Markets in Financial Instruments Directive II
N
NFR
non-financial risks
NFRD
Non-Financial Reporting Directive
NGFS
Network for Greening the Financial System
NYSE
New York Stock Exchange
NZE
Net-Zero Emissions by 2050 Scenario
O
OECD
Organization for Economic Co-operation and Development
ORF
operational risk framework
OTC
over-the-counter
P
PACI
Partnership Against Corruption Initiative
PACTA
Paris Agreement Capital Transition
Assessment
PCAF
Partnership for Carbon Accounting Financials
P&L
profit and loss
PRA
UK Prudential Regulation Authority
R
RSCM
responsible supply chain management
RSPO
Roundtable on Sustainable Palm Oil
RW
risk weight
RWA
risk-weighted assets
S
SCR
sustainability and climate risk
SCS
Swiss Climate Score
SDA
Sectoral Decarbonization Approach
SDC
Swiss Agency for Development and Cooperation
SDG
Sustainable Development Goal
SDS
Sustainable Development Scenario
SEC
US Securities and Exchange Commission
SFDR
Sustainable Finance Disclosure Regulation
SI
sustainable investment
SIF
Credit Suisse sustainability investment framework
SIX
SIX Swiss Exchange
SME
small and medium-sized entities
SNB
Swiss National Bank
T
TBTF
too big to fail
TCFD
Task
Force on Climate-related Financial Disclosures
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U
UN
United Nations
UNEP FI
United Nations Environment Programme Finance Initiative
UNGPs
UN Guiding Principles on Business and Human Rights
USD
US dollar
Note:
This list of abbreviations is not deemed to be comprehensive
of all the abbreviations used in this report.
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Cautionary Statement
Cautionary Statement |
This report may contain statements that constitute
“forward-looking statements.” Refer to the Cautionary
Statement Regarding
Forward-Looking Statements in the UBS Group Annual
Report 2024, available at ubs.com/investors,
for further details.
Notice to investors |
This report and the information contained herein are
provided solely for information purposes, and are not to
be construed as
solicitation of an offer to buy or sell any securities
or other financial instruments in Switzerland,
the United States or any other jurisdiction. No
investment
decision relating to securities of or relating to UBS Group AG,
UBS AG or their affiliates should be made on
the basis of this report. Refer to the UBS Group
Annual Report 2024, available at ubs.com/investors,
for additional information.
Rounding |
Numbers presented throughout this report may not add up
precisely to the totals provided in the tables and text.
Percentages and percent changes
are calculated on the basis of unrounded figures. Information
about absolute changes between reporting periods,
which is provided in text and which can be
derived from figures displayed in the tables, is calculated
on a rounded basis.
Tables |
Within tables, blank fields generally indicate
that the field is not applicable or not
meaningful, or that information is not available
as of the relevant
date or for the relevant period. Zero values generally indicate
that the respective figure is zero on an actual or rounded basis.
Percentage changes are presented
as a mathematical calculation of the change
between periods.
UBS Group AG
P.O. Box
CH-8098 Zurich
ubs.com
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrants have duly
caused this report to be signed on their behalf by the undersigned, thereunto
duly authorized.
UBS Group AG
By:
/s/ Beatriz Martin Jimenez
Name:
Beatriz Martin Jimenez
Title:
Head Non-core and Legacy,
President UBS EMEA, and
Group Executive Board Lead
for Sustainability and Impact
By:
/s/ Todd Tuckner
Name:
Todd Tuckner
Title:
Group Chief Financial Officer
UBS AG
By:
/s/ Beatriz Martin Jimenez
Name:
Beatriz Martin Jimenez
Title:
Head Non-core and Legacy,
President UBS EMEA, and
Group Executive Board Lead
for Sustainability and Impact
By:
/s/ Todd Tuckner
Name:
Todd Tuckner
Title:
Group Chief Financial Officer
Date: 17 March 2025