UBS and Society Sustainability@UBS Hubertus Kuelps Head of UBS and Society Group Head Communications & Branding 3 November, 2017
Our three keys to success 1
Who we are UBS and Society Making sustainable performance part of our firm and every client conversation How we do business How we support our clients How we support our communities Guidelines & principles Sustainable investments Philanthropy Community Investment Clear principles are necessary and collaboration is essential when tackling present-day challenges. We provide our clients with innovative products and services that address societal concerns and drive change for the better. We provide tailor-made advice in all stages of the philanthropy lifecycle and our global network supports clients to achieve their philanthropic goals. We provide targeted financial support and employee volunteering in our local communities, focused on education and entrepreneurship. Stakeholder management Environmental & Social Risk Environmental footprint Sustainable Investing Mainstreaming sustainable performance Philanthropy Advisory Optimus Foundation Community Affairs Our ambition is to be a (1) leader in sustainable investing for private clients, (2) leader in sustainable investing for institutional clients, (3) recognized innovator and thought leader in philanthropy, and (4) industry leader in key sustainability ratings 2
UBS and Society strategy Our goal is to be financial provider of choice for clients wishing to put capital towards the Sustainable Development Goals (SDGs) and the transition to a low carbon economy Why are we doing this? What is our ambition? Slides UBS is committed to creating long-term positive impact for clients, employees, investors and society. Key facts: (not comprehensive) 92% HNWIs believe that it is important to drive social impact and 54% want more social impact advice from their wealth manager¹ i ii Leader in sustainable investing for private clients Leader in sustainable investing for institutional clients 4 78% of asset owners surveyed by Responsible Investor consider environmental, social and governance (ESG) management to be one of the top 5 issues when choosing an asset manager; 24% place it as a top three priority In 2017 UBS has noticed a 31% increase of investor and client inquiries into corporate sustainability topics ² iii Recognized innovator & thought leader in philanthropy 5 A 2014 survey of 30,000 respondents across 60 countries, by Nielsen, a consumer research firm, found 67% would prefer to work for a socially responsible company iv Recognized leader in sustainability 6 3 ¹ World Wealth Report, CapGemini, 2016 ² 42 inquiries handled by Corporate Responsibility Management (CRM) function in 2017 ytd (vs. 32 year-over-year in 2016)
i ii Leader for sustainable investing We are increasing our focus on proactive sustainable investments (i.e. those that require client involvement) 2016 in numbers Core sustainable investing (SI) Exclusion Screen and exclude companies or sectors that do not meet certain social, environmental or ethical criteria. ESG Integration Focus on securities with strong environmental, social and governance characteristics in combination with attractive financial fundamentals. Impact Investing Investments with the explicit intention to generate a measurable social and environmental impact alongside a financial return. Sophistication 4
iii Recognized innovator and thought leader in philanthropy We apply our professional approach to create powerful programs that positively impact the communities in which we operate, as well as realize the bold ambitions of our clients globally Community Affairs UBS Optimus Foundation Philanthropy Advisory We have a responsibility toward the communities in which we operate. We focus on Education & Entrepreneurship We help our clients use their wealth to drive positive change for children. Our experts can select, develop and guide programs that improve children's health, education, and protection, focusing on those with the potential to be transformative, scalable and sustainable We provide clients with expertise and solutions to deliver positive change through donations or investments. As their partner we support them from strategy to implementation 2016 in numbers 2016 in numbers 30% of the UBS workforce volunteering (18,386 employees) 117,389 beneficiaries positively impacted globally, from 193 community partners 1.6m children reached by UBS Optimus Foundation CHF 61m funds raised With over 30 philanthropy professionals across the globe Marrying the business approach of the bank with the vision of the nonprofit world Educate Girls Development Impact Bond Second-year results 87.7% of the 3-year enrolment target has been achieved 50.3 % of the 3-year target for learning progress has ben achieved Optimus is on track to recoup its initial investment Educate Girls says DIB has been transformational in delivering impact 3 year goals Improve education in targeted schools in Rajasthan : 15,000 children (t/o 9,000 girls), 166 schools, 140 villages 5
iv Recognized leader in sustainability Example: Q3 press release, October 27, 2017 6
UBS and Society in 2017 Success requires a clear strategy linked to measurable goals (> 60 objectives defined for 2018) Transition year with strong outcomes Vision/Mission Thank you! How we do business Strategy to align UBS disclosure with FSB TCFD recommendations Thun Group of Banks whitepaper Ambitions How we support clients Commitment of USD 5bn in 5 years towards UN SDGs AM SI Strategy / WM SI Strategy sign off (EC) Global Philanthropy Advisory and Optimus alignment Priorities How we support communities Aligned Social Innovator and Global Visionaries Community Affairs and Optimus joint projects Ambition 1: A leader in Sustainable Investing for private clients ReThink: USD 110m Mobilizing private wealth for public good Lord Mayor's Dragon Award for innovative social entrepreneurship Rise: USD 325m Ambition 2: A leader in Sustainable Investing for institutional clients Climate aware fund GRESB Ambition 3: A recognized innovator and thought leader in philanthropy Social Investment Toolkit (SIT) Long Term Themes Sustainable Investing positioning whitepaper Donor Advised Foundation (DAF) UBS Manage SI Focus UN PRI Strategies in focus: The sustainability imperative Global Philanthropy Forums Business with Impact OrbiMed: USD 85m Global Impact Equity Fund Responsible Investor Conference Educate Girls DIB Best private bank for Philanthropy Services by PWM/The Banker Award Ambition 4: A recognized leader in sustainability ¹ Best CSR award in investment banking by FT 'The Banker' magazine MSCI ESG Rating DJSI Sustainalytics CDP GRI G20 green finance ISO14001 / 50001 GHG / Energy savings Green bonds UBS Industry Bonus for SME ¹ DJSI maintained #1 rank in Diversified Financials for 3rd consecutive year. MSCI ESG upgraded to "A"; top 3 among primary peer group. Sustainalytics - "Leader" score within industry; 97th percentile. Ranked 'A list' by CDP, non-profit global environmental disclosure platform for 2 nd consecutive year. 7
Trends we're watching In addition our strategy takes into account the changing landscape Group strategy linked to goals Focus on climate change Impact measurement ISO 14001, GRI, and external rating agencies: Cascade group (top-down) targets to business divisions (incl. SI AuM) Make bottom up targets mostly quantitative and measurable Increase external disclosure (otherwise not counted in assessments) I.e. Sustainalytics require evidence of quantitative targets (including deadline) for increasing exposure to sustainability related activities Task force on Climate-related Financial Disclosure (TCFD): TCFD report submitted to G20 summit FSB extended mandate (Sept'18) to monitor adoption, increasing pressure to align 2017 reporting TCFD recommendations will have a variety of impacts on climate change disclosure Rating agencies and CDP to align Investors seek climate change information - I.e. Q3 letter from investor group with more than USD 1.8 trillion in AuM Sustainability rating agencies starting to ask for impact measurement and valuation of a company's: strategic activities products and services I.e. DJSI "Do you estimate the monetary value of your positive and/or negative externalized impacts?" and "...KPIs to measure the social and business impact of your initiatives" Sustainable Development Goals Questions on UN Sustainable Development Goal (SDG) implementation and impact measurement 8