UBS Asset Management's Climate Aware strategy, launched in February 2017, has surpassed USD2 billion Assets under Management (AuM), reaching USD 2.07 billion as at 30 June 2019. This milestone reflects strong client demand for sustainable investment solutions.
Climate change and the speed of global warming are two of the greatest systemic risks to the planet. Investors can not only mitigate the financial risks posed by climate change, but can benefit from the vast investment opportunities arising from the transition to a low carbon economy.
Together with experts across the globe, UBS Asset Management (UBS-AM) has taken a leading role in adapting scenario analysis to climate change, using forward-looking insights. As part of our strategy, we engage with companies to help them prepare for the climate transition, with a particular focus on those in the Climate Aware portfolio which are at greater climate risk.
As at June 2019, the UBS Life Climate Aware World Equity Fund achieved 'low carbon' credentials as follows:
• Total CO2 emissions by portfolio companies were contracting at an annual rate of 2.4 per cent, compared to a rate of increase of 1.6 per cent in the benchmark index.
• Scope 1 CO2 (intensity) emissions were 65 per cent less than the benchmark index.
• Coal energy consumption was 74 per cent less than the benchmark index.
• The CO2 that could potentially be emitted from reserves of fossil fuels was 38 per cent less than the benchmark index.
• The Fund's investments in Renewable Energy sources was 48 per cent higher than the benchmark index.
Ian Ashment, Head of Systematic & Index Investments, UBS Asset Management, says: "Climate Aware sits at the heart of our sustainable investment proposition and sends a clear message to the companies that we invest in. Rather than simply reducing exposure to companies with higher greenhouse gas emissions through an exclusion strategy, we seek to align the strategy toward companies that we believe are better prepared for a low carbon future and the 2 degree reduction scenario."
Michael Baldinger, Global Head of Sustainable & Impact Investing, UBS Asset Management, says:
"Faced with the serious environmental and financial challenges posed by climate change, it is simply no longer an option for policymakers, companies or investors to ignore climate risk. We believe that the financial industry plays a key role in the transition to a world less dependent on carbon. Clients are increasingly seeking out opportunities to align their investment targets, with their obligations to incorporate sustainable investment factors within their asset allocations."
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