Valerie Lau: Sustainable Investments Reap Long-Term Benefits

The head of Southeast Asia & Singapore, Apac Sustainable Finance Office at UBS shares why the financial services company strives to reshape the landscape of investing.

Valerie Lau: Sustainable Investments Reap Long-Term Benefits

Melting glaciers, warming oceans and carbon emissions can seem surreal in the world of finance. But more and more banks are saying that climate change has the potential to cause massive global economic dislocations, and UBS AG is one of them. “Our bank has had a focus on sustainability since the 1990s, when it launched its first sustainability-focused fund,” says Valerie Lau, head of Southeast Asia and Singapore, APAC Sustainable Finance Office, UBS.

Since then, it has shifted its business to make certain that the principles of sustainability permeate it. “For instance, we reduced carbon-related assets on our balance sheet to 1.9 per cent or US$5.4 billion as of December 2020, down from 2.8 per cent in 2018. We also source 100 per cent of our electricity from renewable sources, minimising our greenhouse gas footprint by 79 per cent compared with 2004.” The race to full decarbonisation is only just picking up pace, and UBS AG has no plans of letting up on its mission to support sustainable growth.

What are some of the bank’s initiatives? 

Research suggests that climate change presents a systemic threat to financial markets and is the greatest long-run threat to the global economy. Recognising the consequences, we take a holistic approach to sustainability, through the four pillars of finance, philanthropy, the community and our own business.

Sustainable finance is a central tenet of every business division in UBS, and we strive to reshape the landscape of investing. We believe that sustainable investments would reap long-term benefits, and our achievements affirm that. We have seen our core sustainable investing assets grow strongly in 2020, hitting US$793b. This makes nearly 20 per cent of client-invested assets.

At the World Economic Forum in 2017, we set ourselves an objective: to drive US$5b of client assets into new Sustainable Development Goal-related impact investments over five years. We not only crossed the finishing line ahead — early in 2020 — we surpassed the intended sum of assets by US$1.9b. We also recently issued our inaugural green bond.

Other than investments, how does UBS AG walk the sustainable talk?

We see ourselves as an important voice in raising awareness among our clients about the risks and opportunities surrounding climate and environmental issues. In April this year, we joined a group of global banks in the fight against climate change: We have pledged to cut carbon emissions to a net-zero target across our portfolios by 2050. As part of this alliance, we aim to meet our clients with advice and expertise, wherever they are on their sustainability efforts, and to partner with them in decarbonising the economy. 

Two years ago, we became Asia-Pacific’s first wealth manager to launch a mandate for discretionary 100 per cent sustainable investing across assets, offering clients access to longer-term, private-market impact investments. It enabled them to invest in innovative growth companies that contribute meaningfully to society and the environment. The response has been staggering; reaching US$4.5b in assets under management by Q2 2021, a 2.5-time increase from the year before. 

Tell us about your new office at 9 Penang Road.

Sustainability is the underlying foundation here! We use energy-efficient appliances and carbon-neutral flooring. Our operations are fully powered by renewable energy from Sembcorp’s solar-panel farm, as we charge towards the 2025 net-zero objective we’ve laid out for our own emissions. The result is an excellent energy efficiency index.

The design empowers our people to lead a more sustainable lifestyle. At the café, you’ll find at least one plant-based protein meal every day. Any food waste generated is bio-digested and converted into a by-product. We also provide electric-vehicle charging stations, priority parking for carpools, and staff parking spaces for green vehicles and bicycles.

Art direction by Catherine Wong; photography by Darren Gabriel Leow; grooming by Angel Gwee

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