Sustainability might be all the rage now, but UBS has been propelling the conversation since the 1990s when it launched its first sustainability-focused fund. We chat with Desmond Kuek, vice-chairman in global wealth management, on the bank’s efforts in the field of sustainable finance.
How has the bank’s approach towards sustainable investing changed in the past two decades?
We’ve always believed that investments that support a sustainable future will likely benefit financially over the long term. Last year, we became the first financial institution to make sustainable investments our preferred solution for our private clients. In 2020, our sustainability-focused invested assets rose 154 per cent to US$141 billion (S$188 billion) compared to the previous year.
Some think doing well and doing good is a zero-sum game and an incompatible business strategy. This is a misconception. The two must go hand in hand. In Asia, 70 per cent of our clients are entrepreneurs who have found that sustainable investments can generate equal or superior returns compared to traditional instruments.
How have you seen your clients’ appetites towards sustainability-focused investments change?
We expect sustainable investing to grow significantly from 39 per cent today to 48 per cent globally in the next five years. In Singapore, we predict it will rise to 52 per cent from 35 per cent by 2023. It is entirely conceivable that sustainable investing will be the new normal within the decade.
Two years ago, we launched the 100 per cent sustainable investing cross-asset discretionary mandate in Asia-Pacific, which offers clients access to longer-term private market impact investments and allows them to invest in innovative growth companies that positively contribute to social or environmental impact. It has more than doubled in a year: from US$1 billion to over US$2.8 billion.
We’ve also seen a similar uptick in appetites from our corporate clients. Last year, UBS supported 33 green and sustainability bond transactions globally. In APAC, we completed nine deals, one of which was the first-ever sustainability-linked bond issuance for a real estate company in Asia.
Tell me more about the new UBS headquarters at 9 Penang Road.
It’s quite noteworthy. Yes, we are the largest LEED Platinum project in South-east Asia for interior offices – there are only 14 such buildings in Singapore – and also a Green Mark Platinum certified building. Our operations in Singapore are fully powered by renewable energy from Sembcorp’s solar panel farm.
In the cafe, we offer daily plant- based protein meal options and any food waste generated is bio-digested into grey water before being fed into the treatment systems for conversion into a by-product. We’re looking to have our own urban farming plot to grow our vegetables for the staff cafe. We also have electric vehicle charging stations, priority parking for carpool and green vehicles and bicycle parking spaces. Staff who cycle to work can refresh themselves at the shower facilities.