UBS targets green bond debut in 2021

UBS targets green bond debut in 2021

LONDON, Apr 23 (IFR) - UBS plans to issue an inaugural green bond this year, the Swiss bank has announced, while also unveiling targets to cut direct and indirect carbon emissions.

The announcement comes as UBS sets out its sustainability commitments as a founding member of the newly-convened Net Zero Banking Alliance. The alliance consists of 43 banks from 23 countries with US$28.5trn in assets, pledging to set intermediate science-based targets for 2030 or sooner to implement and accelerate their decarbonisation strategies.

The industry initiative was launched this week, as a summit of global leaders and the ambitious national decarbonisation targets announced by US president Joe Biden and others sharpened minds on issues of climate and sustainability.

UBS has lagged behind many of its global peers in joining the green bond market, but in the statement, published on Thursday, the lender revealed plans to issue its first green bond "in due course in 2021".

UBS said it is preparing a roadmap towards its ultimate goal of achieving net zero greenhouse gas emissions across all its operations by 2050.

In the shorter term, it is aiming to achieve net zero Scope 1 and Scope 2 emissions - defined as direct emissions and indirect emissions related to purchased energy - by 2025, by replacing owned fossil fuel heating systems and purchasing and producing 100% renewable electricity.

When it comes to emissions related to its loan portfolio - Scope 3 emissions - UBS said it will set science-based targets to further align its lending with the objectives of the Paris agreement. It said its exposure to carbon related assets was at 1.9%, or US$5.4bn, as of the end of 2020. 

The bank is also setting new or lower thresholds for the financing of coal-fired power plant operators, thermal coal mining companies and companies with significant reserves or production in arctic oil and/or oil sands. 

Meanwhile, members of the banks' group executive board will now be set and judged on ESG-related objectives.

The bank also announced that Suni Harford, president of UBS Asset Management, has been appointed group executive board sponsor for sustainability and impact. She will be responsible for leading UBS' climate and sustainability efforts, in addition to her current responsibilities.

(Reporting by Tom Revell, editing by Alex Chambers, Robert Hogg)

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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