Supporting the transition to a carbon-neutral economy
From floods and storms to droughts and forest fires, the impacts of climate change are not only alarming for the environment itself, but also for the global economy, which relies on a healthy planet and the resources it provides. Physical damage to infrastructure and outputs, disruption of value chains and volatility in commodity prices pose significant economic risks, alongside the regulatory, litigation and transition risks which the shift to a carbon-neutral economy generates.
In 2020, UBP showed its determination to address major climate issues by taking the Paris Agreement Capital Transition Assessment (PACTA 2020) climate sustainability test, as well as supporting the Task Force on Climate-related Financial Disclosures (TCFD).
UBP has over CHF 160 billion in assets under management and this represents our biggest lever for tackling climate change. To reduce carbon emissions linked to assets held in UBP’s investment portfolios, we currently monitor the weighted average carbon intensity of all our long-only funds invested in corporate bonds and equities domiciled in Luxembourg and France, which represent the majority of our funds. This coverage is gradually being extended across all portfolios. Once completed, we aim to reduce the carbon emissions of our investments by setting specific targets for such reductions.
From carbon-neutral to nature-positive
With USD 44 trillion – or over half of global GDP – dependent on nature or natural services, biodiversity loss is not only an environmental crisis but undeniably an economic crisis. From agriculture, food and pharmaceuticals to construction, fashion and tourism, businesses rely either on the extraction of resources or the provision of natural services, such as clean water, healthy soils and pollination.
But from the degradation of natural habitats to the extinction of plant and animal species, the loss of biodiversity is advancing at an alarming rate, driven by climate change, pollution, land use change and over-exploitation of natural resources. This creates direct physical risks, such as unreliable or lower harvests, as well as reputational, litigation and transition risks.
Just as the climate crisis created growth opportunities for “fixers” of the problem and transition risks for those who were not adapting, the protection and restoration of biodiversity is gaining traction, thus providing new market opportunities for innovative companies. Building on our expertise in impact investing, we recently launched a biodiversity strategy, offering investors an early-stage growth opportunity with a positive impact.
To build knowledge and support for nature-positive business models, we are collaborating with other stakeholders through several initiatives, including Business for Nature's Call to Action, FAIRR, the Investment Leaders Group of the Cambridge Institute for Sustainability Leadership (CISL),the UNPRI Investor Working Group on Sustainable Palm Oil and the Task Force on Nature-related Financial Disclosures (TNFD).
Reducing UBP’s environmental footprint
Although UBP’s operational carbon footprint is small compared with the one stemming from our investments, we want to demonstrate leadership by managing our own operations in a sustainable way by reducing travel as well as electricity, paper, water and plastic consumption, while increasing recycling, across all our sites. We are committed to reducing our own carbon footprint by a quarter by 2025 compared with 2019 levels, targeting Scope 1, 2 and 3 emissions:
- Scope 1: direct emissions from company facilities and vehicles.
- Scope 2: indirect emissions from purchased energy (e.g. electricity and heating).
- Scope 3: indirect emissions from other activities, such as purchased goods and services, business travel, employee commuting and waste generated through our operations.
“As a responsible firm with an awareness of the impact our activities can have on the environment, we pay close attention to managing our environmental impact.”
Stephan Zilker, COO Zurich and Head of General Services & Chair of the CSR Committee
As part of this effort, we have embarked on an ambitious, 10-year renovation programme for our buildings in Geneva to improve the energy efficiency of our premises. We are also increasing the use of renewable energy at our offices. UBP Zurich increasingly relies on biogas, while nine sites in Geneva and one in Luxembourg source 100% renewable electricity. We also purchase Renewable Energy Certificates for our Singapore site.
In order to tackle our Scope 3 emissions, UBP recently reviewed its travel policy, limiting travel – especially air travel – and giving preference to eco-labelled hotels where accommodation is necessary. We are also increasing the digitalisation of several administration, finance and procurement operations to lower the use of paper.
To achieve carbon neutrality, we have entered into a partnership with myclimate to offset all remaining emissions starting from those generated in 2020.