Green targets: A shareholder arrives for a meeting at UBS bank in Basel, Switzerland. The bank’s executives now intend to stick with their own policy on coal funding. — AFP
LONDON: UBS Group AG is set to scrap a planned phaseout of coal financing that Credit Suisse had backed, as the global wealth manager prepares to unveil how the merged bank will tackle climate change.
After months of internal debate on how to treat Credit Suisse’s climate strategy, UBS executives now intend to stick with their own policy on coal funding, meaning the bank will have no end date for financing the dirtiest fossil fuel, people familiar with the matter said.
The example is just one in a list of climate finance decisions due to be made public later this month, according to the people, who asked not to be named discussing private details.
UBS will also retire a string of Credit Suisse green targets, even if that means the combined Swiss bank will have no stance in the areas for which policies have been scratched, the people said.
Given the complexity of merging two separate sustainability strategies, UBS’ position on coal could still change once the integration is complete, one of the people said.
The historic rescue of Credit Suisse by UBS in March 2023 represents the first major bank merger of the net-zero era, as climate change forces the sector to grapple with a new layer of risk.
And though UBS is primarily focused on serving the ultra-wealthy rather than on traditional lending, it has “one of the weakest fossil fuel policies in Europe,” according to Jeanne Martin, head of the banking program at climate nonprofit ShareAction.
A spokesperson for UBS declined to comment on the details of its planned update on coal.
In general, however, the bank’s “ambition remains unchanged; to be a global leader in sustainability”.
“We have a clear plan, which received the full support of our shareholders at our annual general meeting in 2023,” the spokesperson said.
“As part of the integration of Credit Suisse, we have undertaken an extensive review of the decarbonisation goals considering the profile of the combined organisation and inherited client relationships and activities.
“Our upcoming sustainability report will contain details about our climate approach as well as an overview of decarbonisation targets for the combined bank.”
UBS’s existing policy allows the bank to finance coal-fired power companies and miners, as long as production isn’t being expanded and no more than a fifth of revenue comes from coal. Credit Suisse had a coal revenue threshold for lending, as well as for capital markets underwriting for coal extraction and power generation. It had pledged to reduce the threshold from 25% in 2020, to 15% in 2025 and 5% in 2030, by which time it aimed to have no remaining credit exposure to thermal coal. — Bloomberg
