According to media reports, UBS is reframing the decarbonization targets of the merged major bank. The Credit Suisse plan of phasing out coal financing altogether is to be scrapped.
Credit Suisse (CS) had pledged to lower the revenue threshold for its lending activities and capital market business for coal extraction and coal-fired power generation. Its proportion of coal-related business was to be reduced from 25 percent in 2020 to 15 percent in 2025, and then to just 5 percent in 2030.
By then, the bank’s aim was to have no remaining credit exposure to thermal coal whatsoever.
Now, however, it looks like UBS wishes to stick to its own timetable after the CS takeover. CS’s planned phaseout is to be dropped, and the bank will not give an end date for financing coal projects, as news agency «Bloomberg» reported, citing anonymous sources.
Decision Due This Month
There are to be more decisions made this month with regard to the climate issue, the article went on to say. Given the complexity of merging the two banks’ different sustainability strategies, the position on coal could still change, the source continued.
UBS allows the financing of coal-fired power plants and mines, provided production is not being expanded and provided the company in question does not generate more than one-fifth of its revenue from coal.
Targets Reviewed
A UBS spokesperson highlighted to the news agency that the bank is sticking with its aim of being a global leading company in terms of sustainability. «We have a clear plan, which received the full support of our shareholders at our annual general meeting in 2023,» they were quoted. «As part of the integration of Credit Suisse, we have undertaken an extensive review of the decarbonization goals considering the profile of the combined organization and inherited client relationships and activities.»
The upcoming sustainability report will contain details about the climate approach and the targets for the combined bank.
Hot Topic on April 24
The topic might also play a role at UBS’ upcoming annual general meeting on April 24. Climate activists see the meeting of shareholders as an excellent occasion to draw attention to the bank’s supposed sins against the climate.
The climate strategy defined by both banks shows differences in some areas. UBS wishes to reduce loans to fossil fuel companies by 71 percent by 2030. For the same period, CS had planned a reduction of the absolute financed oil, gas, and coal emissions by 49 percent.
Net-Zero Alliance Member
There are also differences when it comes to financing sustainability projects. CS’s pledge to provide around 300 billion Swiss francs ($342 billion) by 2030 was retracted. UBS had said that it would make around $400 billion available for sustainable investments by 2025.
Non-profit organization Carbon Disclosure Project (CDP) gives UBS a score of «A-» and recognizes its «environmental leadership» as a company. The bank was a founding member of the Net-Zero Banking Alliance. Members of the alliance commit to eliminating financed emissions by 2050 or before.
