WHATX/ESG_Report · Datasets at Hugging Face

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Decarbonization targets for 2030 for financing of the real estate, fossil fuels, power generation and cement sectors (from 2020 levels): – reduce emissions intensity of UBS’s residential real estate lending portfolio by 42%; – reduce emissions intensity of UBS’s commercial real estate lending portfolio by 44%; – reduce absolute financed emissions associated with UBS loans to fossil fuel companies by 71%; – reduce emissions intensity associated with UBS loans to power generation companies by 49%; and – reduce emissions intensity associated with UBS loans to cement companies by 15%.
Calculated progress against pathways for the real estate (commercial and residential), fossil fuel and power generation sectors:3 – reduced emissions intensity of UBS’s residential real estate lending portfolio by 8% (end of 2021 vs 2020 baseline); – reduced emissions intensity of UBS’s commercial real estate lending portfolio by 7% (end of 2021 vs 2020 baseline); – reduced absolute financed emissions associated with UBS loans to fossil fuel companies by 42% (end of 2021 vs 2020 baseline); and – reduced emissions intensity associated with UBS loans to power generation companies by 12% (end of 2021 vs 2020 baseline). Introduction of an additional decarbonization target for the cement sector, as well as an estimation of the overall financed emissions.
Align 20% of AuM to be managed in line with net zero (Asset Management).4.
Achieve net-zero emissions across discretionary client portfolios by 2050 (Asset Management).5.
Initiated analysis of revisions to fund documentation and investment management agreements to align with Asset Management’s net-zeroaligned frameworks.
Planet.
Achieve net-zero energy emissions resulting from our own operations (scopes 1 and 2) by 2025; cut energy consumption by 15% by 2025 (compared with 2020).
Reduced net GHG footprint for scope 1 and 2 emissions by 13% and energy consumption by 8% (compared with 2021); continued implementation of the replacement of fossil fuel heating systems and investing in credible carbon removal projects; achieved 99% renewable electricity coverage despite challenging market conditions.
9


Sustainability Report 2022 \| Strategy 10.
Offset historical emissions back to the year 2000 by sourcing carbon offsets (by year-end 2021) and by offsetting credit delivery and full retirement in registry (by year-end 2025).
Continued to follow up on credit delivery and retirement of sourced portfolio.
Engage with key vendors on aiming for net zero by 2035. Identified “GHG key vendors” (vendors that collectively account for >50% of our estimated vendor GHG emissions) and invited the vendors that accounted for 67% of our annual vendor spend (including all GHG key vendors) to disclose their environmental performance through CDP’s Supply Chain Program, with 66% of the invited vendors completing their disclosures in the CDP platform.
30% global female representation at Director level and above by 2025. Increased to 27.8% (2021: 26.7%) female representation at Director level and above.
26% of US roles at Director level and above held by employees from ethnic minorities by 2025. Increased to 20.4% (2021: 20.1%) ethnic minority representation at Director level and above in the US.
26% of UK roles at Director level and above held by employees from ethnic minorities by 2025. Increased to 23.0% (2021: 21.3%) ethnic minority representation at Director level and above in the UK.
Raise USD 1 billion in donations to our client philanthropy foundations and funds and reach 25 million beneficiaries by 2025 (cumulative for 2021–2025).
Achieved a UBS Optimus Foundation network donation volume of USD 274 million in 2022, totaling USD 436 million since 2021 (both figures include UBS matching contributions).
Reached 5.9 million beneficiaries.
People.
Support 1.5 million young people and adults to learn and develop skills through our community impact activities (2022– 2025).
Reached 370,916 beneficiaries through strategic community impact activities.6.
Establish UBS as a leading facilitator of discussion, debate and idea generation. Co-organized, with the Institute of International Finance, the first Wolfsberg Forum for Sustainable Finance.
Joined a consortium that is pioneering methods of assessing and maximizing the GHG reduction potential of energy storage.
Co-founded Carbonplace, a technology platform for the voluntary carbon market that has the goal of creating a streamlined and transparent market for our clients.
Partnerships.
Drive standards, research and development, and product development. Co-led the Taskforce on Nature-related Financial Disclosures’ financialsector-specific working group.
Collaboration with two Swiss companies that are pioneering innovative carbon removal technologies.
Joined the Partnership for Carbon Accounting Financials (PCAF).
3 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: corporates disclose their emissions in annual reporting only a few months after the end of a financial year; and specialized third-party data providers take up to nine months to collect disclosed data and make it available to data users. Consequently, the baselines for our net-zero ambitions are based on year-end 2020 lending exposure and 2019 emissions data. Our 2021 emissions actuals are based on year-end 2021 lending exposure and 2020 emissions data. 4 The 20% alignment goal amounted to USD 235 billion at the time of Asset Management’s commitment in 2021. By 2030, the weighted average carbon intensity of funds is to be 50% below the carbon intensity of the respective 2019 benchmark. 5 The near- and medium-term plans for the achievement of this goal include our Asset Management business division only. 6 Our Community Impact program has a strategic focus on education and the development of skills.
Cautionary note: We have developed methodologies we use to set our climate-related targets and identify climate-related risks and which 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.
10


Sustainability Report 2022 \| Strategy 11.
Our approach to sustainable finance.
Supporting our clients.
Sustainable finance is crucial when it comes to helping our clients achieve their diverse sustainability objectives. Through our product and service offering, we target four key objectives in serving our clients: – The power of choice: We want to give our investing clients the choice they need to meet their sustainability objectives.
– A smooth transition: We aim to support our clients in their transition to a low-carbon economy, for instance, by offering innovative sustainable financing solutions.
– Safely managing risks and identifying opportunities: We offer research and insights, together with analytics services. Combined with targeted advice, they are designed to help clients mitigate their risks and spot 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.
Meeting diverse needs.
There is no typical UBS client. Each one has varying needs, but they all expect outstanding advice and service, a wide range of choices, and an excellent client experience.
Our clients span ultra high and high net worth individuals, families and family offices worldwide, affluent clients in selected markets, Swiss personal banking clients, corporate and institutional clients, and sovereign institutions, central banks and supranational corporations.
Leveraging the deep expertise of our experienced teams, we work hard to service our clients’ diverse sustainable financing, investing and/or advisory needs in the best way possible. Our client interactions follow an established rationale that starts by building an understanding of the relevance of sustainability for their business and/or investment portfolio.
Ninety-five percent of surveyed billionaires believe that they should use their wealth or resources to help tackle our world’s environmental and societal problems – from climate change to biodiversity, health, education and inequality.
This key finding from the 2022 survey of UBS’s billionaire clients is one demonstration of the relevance of sustainability to our clients. We are here to help them make their ambitions a reality.
In accordance with our ambitions, our sustainable fi nance product offering evolves across four areas:
Investing.
Sustainable investing solutions for private and institutional investors.
Financing.
Sustainable fi nancing solutions for real estate and corporate purposes.
Research and Advisory.
Solutions guiding our clients on their sustainability transition journey.
Data, Platforms and Client Interactions.
ESG analytics, scoring, reporting, tools and client support through our interactions.
Sustainable fi nance ambitions 11


Sustainability Report 2022 \| Strategy 12.
Identifying sustainable finance opportunities Our Sustainable Finance Group (the SFG) brings together UBS’s senior sustainable finance experts and business leads. In view of our firm’s diversified business model, it has been established as a cross-divisional group. Chaired by our Chief Sustainability Officer, the SFG helps to identify strategic sustainability themes for the development of innovative products and services. It plays an important role in furthering internal collaboration, synergies, and consistency. For example, it acts as a steering body for initiatives that help drive commercial activities and outcomes. It also helps develop firm-wide sustainable finance product guidelines and leads the analysis of important market and financial industry trends.
Sustainable fi nance opportunities.
Research, thought leadership, data, analytics and tools.
Analysis.
We help clients understand the relevance of ESG factors for their business or portfolio.
Advice.
We provide targeted advice to our clients on managing ESG-related risks and / or capturing ESG-related opportunities for their specifi c circumstances.
Action.
We develop innovative and individualized sustainable fi nance products for clients.
Assessment.
We give transparent feedback to clients on non-fi nancial outcomes achieved with regard to sustainable fi nancing and investing client promises.
Sustainable Finance Group.
Group Sustainability and Impact.
Global Wealth Management.
Asset Management.
Investment Bank.
Personal and Corporate Banking 12


Sustainability Report 2022 \| Strategy 13.
Defining sustainable finance.
It is important to set out how we define sustainable finance (SF) as, at present, there is no global, uniformly accepted definition. SF comprises any financial product or service (including both investing and financing solutions) that aims to explicitly align with and/or contribute to sustainability-related objectives, while targeting market-rate financial returns. Sustainability-related objectives may include but are not limited to the Sustainable Development Goals identified in the United Nations' 2030 Agenda for Sustainable Development.
As an example, a sustainable investment product could invest in companies that demonstrate industry-leading sustainability practices for improved alignment to sustainability objectives.
This definition is also reflected in our Group SI framework, which specifically defines “sustainability focus” and “impact investing” products. Both categories reflect a defined and explicit sustainability intention of the underlying investment strategy. This intentionality differentiates them from “traditional” investment products, or those that consider ESG aspects but do not actively and explicitly pursue any specific sustainability objective, such as ESG integration- or exclusions-only approaches. › Refer to the report’s Supplementary Information document for more on ESG integration and exclusion.
Challenges and opportunities 2022 was a challenging year for our clients, with volatile financial markets, significant geo-political events and rising inflation across many economies. Our comprehensive offering of research and advisory products played an important role in helping our clients better understand these complex developments, as well as the implications for their portfolios and businesses.
Against the backdrop of global challenges, financial markets contracted across asset classes during 2022. For investments, global open-ended fund and ETFs total net assets decreased by 19%1 in 2022. Despite this downturn, the long-term trajectory for sustainable investing remains one of growth, demonstrated by continuous quarterly inflows into sustainable investing products while “traditional,” non-SI products faced outflows throughout most of 2022.1 In line with these global market developments, at UBS we continued to increase SI assets under management (AuM) as a share of total AuM, reaching 6.8% by the end of 2022, up from 5.5% at the end of 2021.
Financing markets were equally impacted by the difficult macro environment, where overall bond market issuances dropped by 21%.2 This was reflected in the market for green, social, sustainability and sustainability-linked (GSSS) bonds, where global issuance dropped by 22%.2 Despite these headwinds, we continued to increase our activity in the GSSS bond markets in EMEA, where UBS-involved GSSS bond issuance increased by 8% year on year. We continued to maintain a dominant position in our fast-growing home market of Switzerland, securing leadership in the league table in the Swiss Franc market with a 44% market share. › Refer to the “Our environment” section of our Annual Report 2022 for more information on the key economic and geopolitical developments in 2022 and associated trends 1 Morningstar 2 Bloomberg.
Investment approaches.
UBS’s definition of sustainable investments ‘Traditional’ investing – No explicit sustainability objectives – Manage sustainability and all risks related to investment performance – May use ESG tools, but these do not drive the strategy.
Sustainability focus – Target market-rate investment returns – Have explicit sustainable intentions or objectives that drive the strategy – Underlying investments may contribute to positive sustainability outcomes through products, services and / or proceeds.
Impact investing – Target market-rate investment returns – Have explicit intentions to generate measurable, verifi able, positive sustainability outcomes – Impact attributable to investor action and / or contribution 13


Sustainability Report 2022 \| Strategy 14 2022 sustainable finance in numbers.
Our sustainable investing (SI) assets under management (AuM) reached 268 USD billion representing an increase of 6.5% year on year.
We facilitated 77 green, social, sustainability, or sustainability-linked (GSSS) bond transactions globally.
We retained 1st our Switzerland home market, with 44% market share of Swiss franc denominated GSSS bond issuance rank position in.
Our share of SI AuM of total AuM reached 6.8%

Decarbonization targets for 2030 for financing of the real estate, fossil fuels, power generation and cement sectors (from 2020 levels): – reduce emissions intensity of UBS’s residential real estate lending portfolio by 42%; – reduce emissions intensity of UBS’s commercial real estate lending portfolio by 44%; – reduce absolute financed emissions associated with UBS loans to fossil fuel companies by 71%; – reduce emissions intensity associated with UBS loans to power generation companies by 49%; and – reduce emissions intensity associated with UBS loans to cement companies by 15%.

Calculated progress against pathways for the real estate (commercial and residential), fossil fuel and power generation sectors:3 – reduced emissions intensity of UBS’s residential real estate lending portfolio by 8% (end of 2021 vs 2020 baseline); – reduced emissions intensity of UBS’s commercial real estate lending portfolio by 7% (end of 2021 vs 2020 baseline); – reduced absolute financed emissions associated with UBS loans to fossil fuel companies by 42% (end of 2021 vs 2020 baseline); and – reduced emissions intensity associated with UBS loans to power generation companies by 12% (end of 2021 vs 2020 baseline). Introduction of an additional decarbonization target for the cement sector, as well as an estimation of the overall financed emissions.

Align 20% of AuM to be managed in line with net zero (Asset Management).4.

Achieve net-zero emissions across discretionary client portfolios by 2050 (Asset Management).5.

Initiated analysis of revisions to fund documentation and investment management agreements to align with Asset Management’s net-zeroaligned frameworks.

Planet.

Achieve net-zero energy emissions resulting from our own operations (scopes 1 and 2) by 2025; cut energy consumption by 15% by 2025 (compared with 2020).

Reduced net GHG footprint for scope 1 and 2 emissions by 13% and energy consumption by 8% (compared with 2021); continued implementation of the replacement of fossil fuel heating systems and investing in credible carbon removal projects; achieved 99% renewable electricity coverage despite challenging market conditions.

9

Sustainability Report 2022 | Strategy 10.

Offset historical emissions back to the year 2000 by sourcing carbon offsets (by year-end 2021) and by offsetting credit delivery and full retirement in registry (by year-end 2025).

Continued to follow up on credit delivery and retirement of sourced portfolio.

Engage with key vendors on aiming for net zero by 2035. Identified “GHG key vendors” (vendors that collectively account for >50% of our estimated vendor GHG emissions) and invited the vendors that accounted for 67% of our annual vendor spend (including all GHG key vendors) to disclose their environmental performance through CDP’s Supply Chain Program, with 66% of the invited vendors completing their disclosures in the CDP platform.

30% global female representation at Director level and above by 2025. Increased to 27.8% (2021: 26.7%) female representation at Director level and above.

26% of US roles at Director level and above held by employees from ethnic minorities by 2025. Increased to 20.4% (2021: 20.1%) ethnic minority representation at Director level and above in the US.

26% of UK roles at Director level and above held by employees from ethnic minorities by 2025. Increased to 23.0% (2021: 21.3%) ethnic minority representation at Director level and above in the UK.

Raise USD 1 billion in donations to our client philanthropy foundations and funds and reach 25 million beneficiaries by 2025 (cumulative for 2021–2025).

Achieved a UBS Optimus Foundation network donation volume of USD 274 million in 2022, totaling USD 436 million since 2021 (both figures include UBS matching contributions).

Reached 5.9 million beneficiaries.

People.

Support 1.5 million young people and adults to learn and develop skills through our community impact activities (2022– 2025).

Reached 370,916 beneficiaries through strategic community impact activities.6.

Establish UBS as a leading facilitator of discussion, debate and idea generation. Co-organized, with the Institute of International Finance, the first Wolfsberg Forum for Sustainable Finance.

Joined a consortium that is pioneering methods of assessing and maximizing the GHG reduction potential of energy storage.

Co-founded Carbonplace, a technology platform for the voluntary carbon market that has the goal of creating a streamlined and transparent market for our clients.

Partnerships.

Drive standards, research and development, and product development. Co-led the Taskforce on Nature-related Financial Disclosures’ financialsector-specific working group.

Collaboration with two Swiss companies that are pioneering innovative carbon removal technologies.

Joined the Partnership for Carbon Accounting Financials (PCAF).

3 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: corporates disclose their emissions in annual reporting only a few months after the end of a financial year; and specialized third-party data providers take up to nine months to collect disclosed data and make it available to data users. Consequently, the baselines for our net-zero ambitions are based on year-end 2020 lending exposure and 2019 emissions data. Our 2021 emissions actuals are based on year-end 2021 lending exposure and 2020 emissions data. 4 The 20% alignment goal amounted to USD 235 billion at the time of Asset Management’s commitment in 2021. By 2030, the weighted average carbon intensity of funds is to be 50% below the carbon intensity of the respective 2019 benchmark. 5 The near- and medium-term plans for the achievement of this goal include our Asset Management business division only. 6 Our Community Impact program has a strategic focus on education and the development of skills.

Cautionary note: We have developed methodologies we use to set our climate-related targets and identify climate-related risks and which 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.

10

Sustainability Report 2022 | Strategy 11.

Our approach to sustainable finance.

Supporting our clients.

Sustainable finance is crucial when it comes to helping our clients achieve their diverse sustainability objectives. Through our product and service offering, we target four key objectives in serving our clients: – The power of choice: We want to give our investing clients the choice they need to meet their sustainability objectives.

– A smooth transition: We aim to support our clients in their transition to a low-carbon economy, for instance, by offering innovative sustainable financing solutions.

– Safely managing risks and identifying opportunities: We offer research and insights, together with analytics services. Combined with targeted advice, they are designed to help clients mitigate their risks and spot 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.

Meeting diverse needs.

There is no typical UBS client. Each one has varying needs, but they all expect outstanding advice and service, a wide range of choices, and an excellent client experience.

Our clients span ultra high and high net worth individuals, families and family offices worldwide, affluent clients in selected markets, Swiss personal banking clients, corporate and institutional clients, and sovereign institutions, central banks and supranational corporations.

Leveraging the deep expertise of our experienced teams, we work hard to service our clients’ diverse sustainable financing, investing and/or advisory needs in the best way possible. Our client interactions follow an established rationale that starts by building an understanding of the relevance of sustainability for their business and/or investment portfolio.

Ninety-five percent of surveyed billionaires believe that they should use their wealth or resources to help tackle our world’s environmental and societal problems – from climate change to biodiversity, health, education and inequality.

This key finding from the 2022 survey of UBS’s billionaire clients is one demonstration of the relevance of sustainability to our clients. We are here to help them make their ambitions a reality.

In accordance with our ambitions, our sustainable fi nance product offering evolves across four areas:

Investing.

Sustainable investing solutions for private and institutional investors.

Financing.

Sustainable fi nancing solutions for real estate and corporate purposes.

Research and Advisory.

Solutions guiding our clients on their sustainability transition journey.

Data, Platforms and Client Interactions.

ESG analytics, scoring, reporting, tools and client support through our interactions.

Sustainable fi nance ambitions 11

Sustainability Report 2022 | Strategy 12.

Identifying sustainable finance opportunities Our Sustainable Finance Group (the SFG) brings together UBS’s senior sustainable finance experts and business leads. In view of our firm’s diversified business model, it has been established as a cross-divisional group. Chaired by our Chief Sustainability Officer, the SFG helps to identify strategic sustainability themes for the development of innovative products and services. It plays an important role in furthering internal collaboration, synergies, and consistency. For example, it acts as a steering body for initiatives that help drive commercial activities and outcomes. It also helps develop firm-wide sustainable finance product guidelines and leads the analysis of important market and financial industry trends.

Sustainable fi nance opportunities.

Research, thought leadership, data, analytics and tools.

Analysis.

We help clients understand the relevance of ESG factors for their business or portfolio.

Advice.

We provide targeted advice to our clients on managing ESG-related risks and / or capturing ESG-related opportunities for their specifi c circumstances.

Action.

We develop innovative and individualized sustainable fi nance products for clients.

Assessment.

We give transparent feedback to clients on non-fi nancial outcomes achieved with regard to sustainable fi nancing and investing client promises.

Sustainable Finance Group.

Group Sustainability and Impact.

Global Wealth Management.

Asset Management.

Investment Bank.

Personal and Corporate Banking 12

Sustainability Report 2022 | Strategy 13.

Defining sustainable finance.

It is important to set out how we define sustainable finance (SF) as, at present, there is no global, uniformly accepted definition. SF comprises any financial product or service (including both investing and financing solutions) that aims to explicitly align with and/or contribute to sustainability-related objectives, while targeting market-rate financial returns. Sustainability-related objectives may include but are not limited to the Sustainable Development Goals identified in the United Nations' 2030 Agenda for Sustainable Development.

As an example, a sustainable investment product could invest in companies that demonstrate industry-leading sustainability practices for improved alignment to sustainability objectives.

This definition is also reflected in our Group SI framework, which specifically defines “sustainability focus” and “impact investing” products. Both categories reflect a defined and explicit sustainability intention of the underlying investment strategy. This intentionality differentiates them from “traditional” investment products, or those that consider ESG aspects but do not actively and explicitly pursue any specific sustainability objective, such as ESG integration- or exclusions-only approaches. › Refer to the report’s Supplementary Information document for more on ESG integration and exclusion.

Challenges and opportunities 2022 was a challenging year for our clients, with volatile financial markets, significant geo-political events and rising inflation across many economies. Our comprehensive offering of research and advisory products played an important role in helping our clients better understand these complex developments, as well as the implications for their portfolios and businesses.

Against the backdrop of global challenges, financial markets contracted across asset classes during 2022. For investments, global open-ended fund and ETFs total net assets decreased by 19%1 in 2022. Despite this downturn, the long-term trajectory for sustainable investing remains one of growth, demonstrated by continuous quarterly inflows into sustainable investing products while “traditional,” non-SI products faced outflows throughout most of 2022.1 In line with these global market developments, at UBS we continued to increase SI assets under management (AuM) as a share of total AuM, reaching 6.8% by the end of 2022, up from 5.5% at the end of 2021.

Financing markets were equally impacted by the difficult macro environment, where overall bond market issuances dropped by 21%.2 This was reflected in the market for green, social, sustainability and sustainability-linked (GSSS) bonds, where global issuance dropped by 22%.2 Despite these headwinds, we continued to increase our activity in the GSSS bond markets in EMEA, where UBS-involved GSSS bond issuance increased by 8% year on year. We continued to maintain a dominant position in our fast-growing home market of Switzerland, securing leadership in the league table in the Swiss Franc market with a 44% market share. › Refer to the “Our environment” section of our Annual Report 2022 for more information on the key economic and geopolitical developments in 2022 and associated trends 1 Morningstar 2 Bloomberg.

Investment approaches.

UBS’s definition of sustainable investments ‘Traditional’ investing – No explicit sustainability objectives – Manage sustainability and all risks related to investment performance – May use ESG tools, but these do not drive the strategy.

Sustainability focus – Target market-rate investment returns – Have explicit sustainable intentions or objectives that drive the strategy – Underlying investments may contribute to positive sustainability outcomes through products, services and / or proceeds.

Impact investing – Target market-rate investment returns – Have explicit intentions to generate measurable, verifi able, positive sustainability outcomes – Impact attributable to investor action and / or contribution 13

Sustainability Report 2022 | Strategy 14 2022 sustainable finance in numbers.

Our sustainable investing (SI) assets under management (AuM) reached 268 USD billion representing an increase of 6.5% year on year.

We facilitated 77 green, social, sustainability, or sustainability-linked (GSSS) bond transactions globally.

We retained 1st our Switzerland home market, with 44% market share of Swiss franc denominated GSSS bond issuance rank position in.

Our share of SI AuM of total AuM reached 6.8%