UBS has seen strong client demand for sustainable investments, with 95% of its billionaire clients surveyed keen to help tackle the world’s environmental and social problems, says former Credit Suisse star banker Young Jin Yee, who joined UBS in June.
Young kickstarted UBS’s APAC Sustainable Finance Conference on Oct 10, titled “The wins of change”, with an opening address outlining the Swiss bank’s sustainable investing strategies.
“At UBS, we are directing capital towards the sustainability transition by offering our clients ‘the wins of change’ that they wish to see. Globally, it is encouraging to see that our Global Wealth Management clients’ discretionary asset aligned to SI Strategic Asset Allocation reached US$22.9 billion, and our Global Wealth Management clients’ SDG-related impact commitments and invested assets reached US$10.1 billion in 2022, as this reaffirms our efforts in providing our clients with timely and targeted ESG content, strategic insights and advice.”
Young is co-head of UBS Global Wealth Management Asia Pacific, with primary responsibility for Singapore, Southeast Asia and onshore locations. She is also country head for UBS Singapore.
Young left Credit Suisse in October 2022 after nearly 20 years with the bank, where she was most recently deputy head of wealth management APAC, head of wealth management for Singapore and deputy chief executive officer of Singapore, among others. In June, Young left Deutsche Bank after less than six months in the role.
At UBS, Young replaces August Hatecke, who has returned to Zurich, Switzerland, to lead UBS Global Wealth Management’s Switzerland business after more than seven years in the Asia-Pacific region. Before joining Credit Suisse, Young was with DBS Private Bank and Citibank Singapore.
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According to the UBS Investor Sentiment Survey released in February, two-thirds of high-net-worth investors stated that sustainability is highly important to them and to the performance of their portfolio. Furthermore, 78% of those investors surveyed expect investments in sustainability to maximise their returns.
Valerie Lau, UBS co-head sustainable finance Asia Pacific, says their chief investment office continues to recommend a “diversified” approach to sustainable investing. “We see near-term tactical opportunities in sustainable bonds, ESG leaders and innovative companies that can do more with less, including within energy and water efficiency. UBS CIO also sees opportunities in alternatives, including hedge funds and private market solutions, which can offer access to new markets or more specific sustainability themes.”
‘Writing on the wall’ for fossil fuels
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On the other hand, cutting energy companies from portfolios entirely would be “irresponsible”, says Stephanie Choi, sustainable and impact investing strategist at UBS Global Wealth Management. “From a sustainability and credibility standpoint, the weird thing about it is that today, our economies still rely on fossil fuels for power generation. It is an essential service… But we need to be very selective about positioning with the companies that are willing to embrace change.”
Speaking at a panel discussion following Young’s opening remarks, Choi says her team is “structurally underweight” on energy companies, and their exposure is balanced by other sectors and asset classes like fixed income and alternatives. “We’ve been working very hard to deliver hedge funds and private market exposures and opportunities for our clients… We do believe that diversification helps to manage short-term volatility.”
Volatile energy prices are a sign of growing “dislocation” in the energy market, she adds. “We’re not excluding fossil fuels just purely from the goodness of our hearts; there is a rational reason why we do not invest in fossil fuels directly — that’s because we have already seen the writing on the wall; we already know that the energy transition is causing dislocation in both the supply and demand of energy. As a result, the price dynamics for the next 10 years are going to look very different from the past decade.”
Impact investing is essentially keeping the end consumer at the centre of everything, says fellow panellist Mahesh Joshi, head of Asia private equity at Zurich-headquartered impact investor BlueOrchard. “From that perspective, it helps you stay away from the latest trends in the market. If you were investing in 2021, it was hard to ignore the noise around technology and everybody choosing technology at whatever valuation. But it is the focus on driving value for the end consumer, which should be the fundamental tenet of every business, that helps to make good investments, in my view.”
In a separate keynote address, Sir Alok Sharma, president of the 2021 United Nations Climate Change Conference (COP26) in Glasgow, outlined his expectations for the upcoming COP28, where world leaders will have to work “extra hard” to seek consensus on climate action.
Photo: UBS
