Daily ESG Briefing: UBS announces sustainable investment as its ‘preferred option’ for wealth clients

The latest developments in sustainable finance

UBS has become the first financial institution to officially favour sustainable investment options over conventional ones for clients of its $2.6trn global wealth management business. In an announcement, the investment bank said today that “sustainable investments are now the firm’s preferred solution for private clients investing globally”. “While traditional investments will remain most suitable in some circumstances, UBS believes a 100% sustainable portfolio can deliver similar or potentially higher returns compared to traditional investment portfolios and offer strong diversification for clients investing globally,” it continued, pointing to the outperformance of labelled ESG funds so far in 2020.

The President and Chair of the Asian Infrastructure Investment Bank, Jin Liqun, said yesterday that the bank would no longer support coal. “Let me be very clear: I am not going to finance any coal-fired power plants,” he told the Climate Bonds Initiative conference, online. “Further, AIIB will not finance any projects that are functionally related to coal – e.g. roads leading to the plant, or transmission lines serving coal power”. 

Votes at more than 80% of AGMs in Europe were hindered because of Covid-related restrictions on physical attendance, says a report by advisor Georgeson. The research also shows that 70% of French companies reduced, cancelled or postponed dividend payments during the period, compared with 20% in Switzerland. France also saw the highest proportion of commitments to temporarily reducing executive pay during the crisis – again, 70% – while in Denmark, no companies made such a commitment. 

Friends of the Earth has issued a legal challenge to the British Government for its $1bn investment in a gas project off the coast of Mozambique. The offshore deepwater gas facility is being developed by Total, which has described the project as equivalent to a “12 billion-barrel oil field”. Friends of the Earth is accusing the government of breaching its own policy by funding the project, as well as failing to disclose its impact assessment.

Over 1,100 academics, scientists and researchers have signed a letter demanding New York state legislators divest New York State’s Common Retirement Fund from oil & gas. The proposed Fossil Fuel Divestment Act now has 99 sponsors in the State Assembly and Senate.