- UBS, following its merger with Credit Suisse, aims to increase lending to the shipping sector while winding down loans to fossil fuel clients.
- This strategy represents a significant step in aligning the bank’s sustainability commitments with its financing decisions.
- The merger marks a pivotal moment for UBS as it navigates the complexities of integrating sustainability frameworks and addressing legacy loans inherited from Credit Suisse.
Following the merger with Credit Suisse, UBS faces the challenge of aligning sustainability commitments with its financing decisions. This includes revising and expanding the combined group’s sustainability and climate risk policy framework to govern all financing activities. The integration process involves recalibrating and re-analyzing sustainability frameworks, methodologies, and programs, reflecting the bank’s commitment to achieving net-zero carbon emissions by mid-century.
Management of Legacy Loans
With a combined balance sheet exceeding $1.6 trillion, UBS inherits legacy loans from Credit Suisse, particularly in sectors like energy, shipping, and steel. The bank plans to house loans that do not align with its sustainability risk appetite in a “non-core” unit and allow them to run off over time. This strategic decision reflects UBS’s focus on managing lending practices in line with its sustainability goals.
Focus on the Shipping Sector
UBS sees potential for growth in the shipping sector and intends to maintain and expand shipping-linked loans inherited from Credit Suisse. The bank recognizes the innovation and advancements in the shipping industry towards cleaner practices, indicating a long-term commitment to supporting sustainable shipping initiatives.
Assessment of Sustainable Investing Products
A key task for UBS in the coming year involves assessing all of Credit Suisse’s sustainable investing products to ensure alignment with the new sustainability framework. This process entails reviewing each product to determine its compatibility with UBS’s sustainability goals and principles.
Revised Emissions Reduction Targets
UBS has updated its emissions reduction targets for various sectors, including real estate, power generation, cement, iron, and steel. The bank aims to achieve a 70% reduction in fossil fuel sector emissions by 2030, reflecting a commitment to transitioning towards cleaner energy sources. Additionally, UBS plans to set ambitious targets for reducing emissions across its lending portfolio, further demonstrating its commitment to sustainability.
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Source: Reuters
