Pension funds-backed Ethos Foundation expects UBS to tighten its lending policy given the higher exposure of Credit Suisse to climate sensitive sectors, said chief executive officer Vincent Kaufmann, speaking at UBS’s annual general meeting (AGM) held in Basel today.
The foundation demanded UBS to phase out from high emission sectors such as thermal coal, recommending a vote against the bank’s sustainability report.
“Is it true that UBS has decided to remove from its lending policy the phase out of thermal coal, oil sands, and article drilling financing introduced by Credit Suisse in the past, and that means that UBS is not prepared to withdraw from those high emission sectors as most of [your] European competitors have already done?”, Kaufmann asked of Colm Kelleher, UBS chair, during the AGM this morning.
UBS has reassessed Credit Suisse’s sustainable financing and investment products against UBS’s sustainability frameworks, pausing the development of new products, looking to apply the classification framework used for UBS Asset Management sustainable investment products to Credit Suisse Asset Management products this year, according to the bank’s 2023 sustainability report.
UBS plans to move “selected Credit Suisse sustainable and impact investing solutions” onto the merged Global Wealth Management platform in 2024 and 2025, it added.
Kelleher said UBS will “substantially complete” the sustainability integration with Credit Suisse this year, with stringent criteria on unconventional oil and gas businesses, while reducing exposure to coal.
“UBS’s approach was chosen as the blueprint for the combined risk appetite [on sustainability] because of its broader scope of application across sectors, and its generally stronger risk mitigants, [while] former Credit Suisse standards were adopted in areas where UBS did not have a large business footprint before the acquisition,” he explained.
Shareholders have taken note of the progress made by the bank during a challenging year following the acquisition of Credit Suisse, but “important indicators” like the number of code of conduct violations, data security breaches or gender pay gap ratios are not disclosed in the sustainably report, Kaufmann added.
“It is essential that the mistakes of the past are not repeated,” he continued.
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