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World's Largest Wealth Firm Raises ESG Game

Tom Burroughes, Group Editor , 3 December 2018

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UBS continues to burnish its ESG credentials with a new assessment programme.

UBS is offering what it calls “comprehensive environmental, social, and governance” assessments of the funds it offers to private clients worldwide, continuing a push by wealth managers to show their ESG credentials.

The assessments will apply to the Swiss firm’s in-house and third-party funds, it said.

The assessments will apply to all long-only equity and bond mutual funds and exchange-traded funds on UBS Global Wealth Management's non-US platform – not just specialist ESG products, it said. The programme will also cover similar funds and separately managed accounts that form part of the US platform's Select Lists of highly recommended products. 

Zurich-listed UBS, which is the world’s largest wealth management house, said the assessments will be completed by the end of 2019 and will be updated where necessary thereafter. Funds will be scored across seven aspects of sustainability: pollution/waste; climate change; water; people; products/services; corporate governance; and ethics.

ESG-themed investment has gone from being a niche area to an almost ubiquitous feature of the investment and wealth management sector, tapping into perceived public demand to use financial muscle to achieve non-monetary as well as commercial goals.

UBS recently warned that far too many people are unclear what certain terms relating to the ESG universe actually mean. 

Explaining its assessment programme, UBS said its experts will evaluate funds using interviews, questionnaires, data analysis and other due diligence processes. Evaluation will not ultimately be reliant on third-party opinions or screens, which UBS said is a major improvement from existing industry practice. UBS's Chief Investment Office and Investment Platforms and Solutions units are responsible for overall assessment methodology.

The bank has also committed to $5 billion over five years for impact investments related to the UN’s Sustainable Development Goals and launch of a 100 per cent sustainable cross-asset portfolio for private clients, which recently surpassed $3 billion in size globally.

This publication recently interviewed Indosuez Wealth Management about its ESG programme and how it integrates such ideas into its client portfolios, and a report from that interview is forthcoming.

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