UBS UBS Group AG

By Dieter Holger

UBS Group AG on Wednesday named Michael Baldinger as the Swiss bank's first chief sustainability officer, effective June 1, a role that will steer its goal to reach net-zero greenhouse-gas emissions by 2050 as big financiers re-align their portfolios to combat climate change.

Mr. Baldinger joined the bank in 2016 as head of sustainable and impact investing for UBS Asset Management and was previously the chief executive of sustainable-investment pioneer and research firm RobecoSAM. In his new role, reporting to UBS Asset Management President Suni Harford, he will have more power to oversee a number of challenges to boost sustainable investments and activities.

"We aim to extend the group's leadership in sustainability and take another step toward meeting our net-zero ambitions," Ms. Harford said.

Mr. Baldinger's promotion comes at a time when UBS and the financial sector is placing greater importance on sustainability and environmental, social and governance-based investing strategies, as governments, investors and the public call on banks to mobilize their finances to meet the Paris climate accords. The international agreement made in 2015 aims to keep global warming well-below 2 degrees Celsius and achieve a climate-neutral world by the mid-century.

Big U.S. banks Wells Fargo & Co., Bank of America Corp. and Citigroup Inc. pledged earlier this year to reach net-zero greenhouse-gas emissions across their finances by 2050. BlackRock Inc., the world's largest fund manager, has also said its investments would reach net-zero by 2050, which involves pressuring companies to change course.

UBS, which has more than $4 trillion in invested assets, is already one of the world's top managers of sustainability funds and publishers of ESG research, but it plans to move even more aggressively into the space. In September, UBS said it would recommend sustainable investments over traditional options to its clients around the world, including for retirement plans. More wealth managers could follow its lead, analysts say.

Later this year, Mr. Baldinger will likely be involved in unveiling the bank's climate action plan, which will set science-based emissions targets and intermediate goals on the road to net-zero. The most difficult area to cut emissions for UBS are its scope 3 emissions, which are contained in the products companies sell. For banks like UBS, that includes their financing.

Sustainable investments can also bring profit to fund managers. For instance, exchange-traded funds with sustainability mandates around environmental and social issues carry higher fees on average than standard ETFs, according to data from FactSet.

UBS's most recent first-quarter earnings topped Wall Street's expectations across all its divisions but were overshadowed by a surprise $774 million hit from the collapse of Archegos Capital Management. Operating profit from its asset-management business rose to $227 million from $157 million a year ago, buoyed by inflows.

Write to Dieter Holger at dieter.holger@wsj.com; @dieterholger

(END) Dow Jones Newswires

May 05, 2021 13:06 ET (17:06 GMT)

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