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UBS attracts huge money for sustainable investments

Asia-sourced AUM of the bank’s sustainable portfolios grew 150% last year.

Editor’s note: This article was first published on ESG Clarity Asia.

Sustainable assets within UBS’s global wealth management and asset management divisions have attracted huge inflows during 2020, according to a statement from the firm.

Within its global wealth management division, invested assets in its 100% sustainable portfolios have reached at least $18bn, representing an 80% increase from $10bn in 2019. Global net inflows during the year amounted to $7bn, the firm said, noting that better performance than traditional portfolios has contributed to AUM growth.

Asia-sourced AUM of the sustainable portfolios have reached around $2.5bn in 2020, representing a 150% increase from the end of 2019, according to a spokeswoman at UBS.

Launched in 2018 in Asia-Pacific, UBS Wealth’s 100% sustainable cross-asset portfolio comprises a mixture of ESG bonds and equities, that meet the thresholds of the firm’s proprietary framework.

UBS’s asset management division also saw its ESG AUM grow during the year. Its sustainable investing-focused assets doubled to $97bn globally in 2020, according to the statement, adding that its climate aware strategies reached $15bn.

“From our conversations with investors and business owners across Asia, we know that many more are looking to integrate ESG-related aspects in their investment portfolios, business plans and philanthropic ventures,” Desmond Kuek, divisional vice chairman and chair of the APAC sustainable finance network at UBS, said in the statement.

“In the coming year, a further maturing of the SI toolkit, a greater focus on impact investing and transformational trends are likely to keep the momentum growing,” added Min Lan Tan, head of APAC chief investment office at UBS Global Wealth Management.

UBS also noted that it initially aimed to raise $5bn for impact investments related to the United Nations Sustainable Development Goals (SDGs) in the five-year period between 2017 to 2021, and surpassed that milestone during the second half last year. Each investment aims to generate a measurable social or environmental impact relating to one or more of the SDGs.

Separately, UBS published a white paper on 10 sustainable finance trends for the World Economic Forum’s Davos Agenda Meetings. The paper projects that in 2021:

  • Impact investing will fuel a new wave of growth in sustainable finance
  • Investor engagement on sustainability issues will be more influential than regulation in 2021
  • Sustainability data will continue to evolve faster than expected
  • Climate stress testing will go mainstream, reflecting net-zero emissions goals and other factors
  • Electric transportation, plant-based meat and the reinvention of oil companies should provide attractive investment opportunities

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