Sustainability-related disclosures

To advance the EU’s climate and energy objectives, the European Commission introduced a suite of measures, including the Sustainable Finance Disclosure Regulation (SFDR). The SFDR sets harmonised rules for how financial market participants and financial advisers must disclose information about sustainability risks, the adverse impacts of investment decisions on sustainability factors, and the sustainability characteristics or objectives of financial products.

UBP defines sustainability risks as follows

Environmental Risks: such as physical risks (e.g., damage from extreme weather events like storms, floods, or heatwaves caused by climate change, as well as nature-related risks such as water scarcity, soil erosion, or biodiversity loss affecting supply chains and ecosystem services) and transition risks (e.g., challenges arising from regulatory changes, technological advancements, shifts in consumer behaviour, or legal issues like carbon taxes that may reduce profitability).

Social Risks: arising from issues like breaches of employment standards, poor occupational health and safety, inadequate product safety, failure to address social concerns, unfair treatment of employees, or high staff turnover.

Governance Risks: related to unequal treatment of shareholders, weak risk management or operational controls, inappropriate remuneration systems, or violations of international regulations.

Integration of sustainability risks at UBP

Union Bancaire Privée (UBP) integrates sustainability risks across the Group through its Sustainability Risk Framework that applies to all activities and entities, including Wealth Management (discretionary and advisory mandates), Asset Management, Treasury & Trading, and Operations.

The Sustainability Risk Framework is aligned with UBP’s Group-wide Responsible Investment (RI) Policy, and compliance is monitored through key sustainability risk indicators.

UBP’s RI Policy reflects the Bank’s commitment to integrating environmental, social, and governance (ESG) considerations into its investment processes to promote long-term value creation. This commitment is rooted in our belief that, as stewards of the assets with which clients entrust us, we have fiduciary duty to manage investments responsibly to protect and grow our clients’ wealth both now and for future generations. As environmental and social challenges are increasingly affecting the profitability and viability of businesses, integrating sustainability factors into investment decisions and advice is therefore of growing importance. The RI Policy sets the framework for identifying and managing ESG risks and opportunities, evaluating positive and negative impacts across investments, and maintaining compliance with applicable regulatory standards. It applies to all investment activities across UBP’s two business lines, Wealth Management and Asset Management, and covers actively managed assets and discretionary investment decisions and advisory services. UBP integrates sustainability risk considerations into its investment decision‑making process and investment advice by taking into account the potential risks on a company’s reputation, value, and future performance from exposure and resilience to ESG risk‑related factors. UBP conducts proprietary ESG research using carefully selected third-party data that meet its standards.

Sustainability remuneration policy

The remuneration structure at UBP discourages excessive risk-taking and is linked to risk-adjusted performance. As part of the remuneration policy, employees and management are expected to comply with all applicable risk management, compliance, conduct obligations, including those related to sustainability. Should conduct, risk management or compliance failures occur, variable remuneration may be adjusted. In terms of sustainability, employees’ performance appraisals look at their contribution to a general sustainability behaviour goal, while portfolio managers, advisors and all UBP Europe employees have more specific ESG-related goals in their performance appraisals. UBP will continue to monitor regulatory developments and market practices relating to the integration of sustainability risks.