In this Q&A, Eugene Qian, President of UBS Securities, discusses the bank's role in promoting sustainable growth, following his participation at the WFE’s recent Fostering Growth in Global Capital Markets symposium in China.
In your view, how can financial institutions play their part in green finance and sustainable economic growth?
There is a US$5-7 trillion annual funding gap for the world to meet the United Nations Sustainable Development Goals (SDGs). However, the landscape could fundamentally change by commercialising sustainable investment. Financial firms need to work together to standardise sustainable and impact investing conventions, to develop innovative solutions, and to educate investors on the misconception that sustainable investment compromises returns.
UBS is the world’s largest wealth manager, and a leading investment bank and asset manager. We aim to make a difference in sustainable investment by offering innovative products and solutions, building thought leadership and expertise, and partnering with other banks, institutions, social enterprises, and other stakeholders.
Today, 35% of UBS's total invested assets are sustainable investment (SI) assets (over CHF1.1 trillion since 2017). UBS is committed to directing at least US$5 billion of client assets to support the UN SDGs by 2021, and each business division is committed to integrating sustainability. For example, UBS Asset Management is the largest SI Exchange Traded Funds (ETF) provider in Europe, and manages the largest sustainable mandate in the world.
UBS works with various international organisations, NGOs, think tanks, and peer-related network groups, to promote ESG and sustainable investment, and drive actions to support the SDGs. UBS has formed over 30 partnerships since 2016 to support SI investment. We also have an exclusive partnership with the World Bank on its debt allocation instruments. To drive thought leadership and share expertise, we currently have 50 employees dedicated to SI investment, and have published over 60 reports, research studies, and whitepapers, on sustainable investment across the bank’s business divisions.
Please can you tell us how your business is helping to foster growth in global, and Chinese, capital markets?
UBS has a truly global network with offices in over 50 key financial centres, and while entering China early, we have built a multi-entity domestic platform that has a broad range of licenses. This has put us in a unique position to bridge the global and China capital markets for growth. China is a key market for UBS and the company will continue to invest in the country. Group CEO, Sergio Ermotti, announced in early 2016 that the bank's head-count would double over the following five years. At that time, we employed over 600 people in China, and now this has risen to over 1,000 employees. Our hiring plans are still on track to increase this figure further.
We’re helping China open up to the global markets by bringing international investment solutions to Chinese clients, and by giving China exposure to our clients from across the world. UBS actively participates in the opening-up of China’s financial sector and we’ve seen massive progress in recent years. For example, the Stock Connect programme provides an additional channel for foreign investment into the Chinese A-share market (and vice versa), and it allows Chinese investment abroad. Bond Connect currently allows north-bound trading, and south-bound trading is expected to come in due course. Global fund managers are now able to offer private funds in China, and most recently, foreign companies can have 51% securities in joint ventures.
We’re fully engaged in providing clients with holistic products and services from our wealth management, investment banking and asset management businesses. UBS also continues to work towards increasing its stake in UBS Securities Co., Ltd to 51%.