UBS has launched a dedicated "values-based" investment team in Hong Kong to offer knowledge, advisory and investment solutions, including on structured products linked to sustainable and ethical underlyings for clients seeking a sustainable investment approach in their investment portfolios.
According to UBS, investors around the world increasingly recognise that investments can drive social and environmental change and they want to drive positive change in society. Meanwhile, investors are also realising the economic opportunities of investing sustainably and that there is an effective way to achieve this without having to compromise financial returns.
“We have developed a state of the art portfolio screening and investment approach to support not only our institutional but increasingly our private clients in their efforts to identify their sustainability preference and align their personal values with their individual investment approach,” said Mario Marconi, head of the family services group at UBS Wealth Management. “With a Hong Kong-based sustainable investment team we are able to support clients with expert knowhow on the local environment and regulations.”
Access
Many investors find it increasingly difficult to implement sustainable investing strategies into their portfolio, said UBS. This is partly due to the sustainable investing industry itself, which in many ways has failed to provide clarity on what it offers.
According to the Swiss bank, another hurdle is the investment itself. “Investors are not provided clear answers to questions around which investments promote the most positive change; what is the best way to implement these investments; and how can a lasting impact be ensured.
“While 80% of investors may be interested in sustainable investing, there is also a common belief that – contrary to evidence – sustainable investments yield less than conventional investments,” said the bank in a statement. “However, there is evidence to indicate that companies with better environmental, social and governance (ESG) standards can and do generate better risk-adjusted returns. Social and environmental factors are no longer just a ‘nice to have’ moral consideration, but a vital ‘must have’.”
Approach
UBS said it has developed tools to make it easier for clients to identify sustainable investments. The team will classify an investment in terms of its sustainability by analysing the portfolio and assigning a simple and easy to understand rating (with S1 the highest sustainability rating and S5 the lowest sustainability rating) to each portfolio position to provide a clear picture.
“Because sustainable investing has been integrated into UBS’s overall investment framework, any investment alternative proposed as a more sustainable option will have a similar risk return profile to the original position,” said Amy Lo, country head at UBS Hong Kong and head of Greater China, UBS Wealth Management. “Therefore the risk return of sustainable investments can be compared with conventional portfolios.”
Lo also added that investing according to sustainability criteria could not only outperform the market but also contribute to solving our planet’s greatest sustainability challenges.
See also:
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