UBS is making sustainable investments the preferred solution over traditional ones for its private clients worldwide.
The Swiss bank, which oversees $2.6trn in assets, is said to be the major financial institution to make such a move.
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The bank, with a sustainable investing experience of around 25 years, said that its major sustainable indices performed better than traditional counterparts year to date.
It said that a completely sustainable portfolio can lead to higher returns and more diversification.
At the same time, it also agreed that traditional investment options are most suitable in certain circumstances.
UBS Global Wealth Management co-president and UBS Americas president Tom Naratil said: “COVID-19 has put the exclamation point on one of the most important shifts in financial services in a generation.
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By GlobalData“The pandemic has brought the vulnerability and interconnected nature of our societies and industries to the forefront of investors’ minds and shown that sustainability considerations cannot be ignored.”
At present, clients of UBS are said to have $488bn invested in its core sustainable assets.
UBS Sustainable Finance Committee chair Huw van Steenis said: “Sustainable finance is a firm-wide priority for UBS and our aim is to help clients take advantage of new opportunities and manage 21st century risks more smartly.
“As sustainable finance has moved into the mainstream, it is a critical component for clients and a strategic growth opportunity for UBS.”
Sustainable initiatives by other firms
In July 2020, UBS rival Credit Suisse earmarked at least CHF300bn ($330.1bn) in sustainable financing over the next 10 years in renewable energy and Green Bonds, among other areas.
Earlier this week, Lombard Odier collaborated with the University of Oxford to support research and teaching on sustainable finance.
Besides, the UK’s investment consulting firms recently formed a joint working group to improve sustainable practices across the investment industry.
Last month, Morgan Stanley launched an accelerator to support sustainable innovations.
This May, Citigroup launched a new unit focused on sustainability.
