UBS doubles down on ESG as industry calls for global framework

Rick Steves

The regulatory landscape must reflect the situation and catch-up to this megatrend as there remains a startling lack of consistency in definitions and data.

UBS has made two key hires for its new Sustainability and Impact organization, which will lead activities across the firm to drive its sustainability agenda and deliver on its Net Zero commitments.

Reporting to Suni Harford, Group Executive Board sponsor for Sustainability and Impact and President of UBS Asset Management, Michael Baldinger and Phyllis Costanza will help the department drive the implementation of the sustainability strategy at UBS.

Michael Baldinger was appointed Chief Sustainability Officer for UBS, where he will be responsible for setting and driving implementation of the strategy and will provide oversight for all SI-related projects and activities.

With nearly 35 years working in the financial services industry and over a decade as an investor in sustainability, Baldinger first joined UBS in 2016 as Head of Sustainable and Impact Investing for UBS Asset Management. Michael was the CEO of RobecoSAM, the sustainability specialist firm.

Phyllis Costanza was appointed Head of Social Impact, where she will sharpen the company’s focus on health and education, in particular, two key levers in forging a fairer, more prosperous society. In addition, she will continue to be responsible for the group’s Philanthropy Services, Optimus Foundation and Community Affairs activities.

Suni Harford, GEB Sponsor for Sustainability and Impact, said: “Sustainability is at the core of our new purpose to reimagine the power of investing and connect people for a better world. By creating the Sustainability and Impact organization with these senior appointments, we aim to extend the Group’s leadership in sustainability and take another step toward meeting our Net Zero ambitions.” She added, “Underpinning this is our ongoing commitment to helping our clients mobilize capital in support of the UN’s Sustainable Development Goals that matter most to them.”

The new Sustainability and Impact organization will act as a focal point and center of excellence, responsible for driving the implementation of the bank’s sustainability strategy. It will also track UBS’s progress towards its Net Zero commitments.

The ESG-focused appointments come in a time the trading industry has given special attention to environmental, social and governance (ESG) investing.

Industry leaders have been increasingly calling for a global framework for ESG investing as the sector faces a massive uptick of inflows and, at the same time, faces accusations of inconsistency in their approach to sustainable impactful investments.

deVere Group’s CEO Nigel Green has come forward in calling for global regulation of the issue since ESG investing “is this decade’s ultimate investment megatrend“.

“There’s been a dramatic increase of inflows into the sector from both retail and institutional investors as it has become clearer than ever that human health is reliant upon healthy ecosystems; that we need to ensure the sustainability of supply chains; and that those companies with robust corporate governance and good business practice fare better in difficult times and are ultimately best-positioned for the future.

“The trend is unlikely to slow down in a post-pandemic world. Millennials, who are statistically more likely to seek responsible investment options, are set to become the major beneficiaries of the largest inter-generational transfer of wealth – an estimated $30trillion over the next few years.”

“In addition, recent research reveals that the majority of environmental, social and governance investments have outperformed their non-sustainable counterparts over the last year and have had lower volatility”, Mr. Green continued, adding that this will only serve to attract more investors.

The regulatory landscape must reflect the situation and catch-up to this megatrend as there remains a startling lack of consistency in definitions and data.

A global regulatory framework for ESG investing would provide greater protections for those investors who are looking for profits with purpose and will also help to reduce ‘greenwashing’ – when an investment or company gives an inaccurate impression over its green, socially responsible or corporate credentials.

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