UBS has delayed its target to achieve net zero greenhouse gas emissions by a decade, now aiming for 2035 instead of the previously set 2025. The Swiss bank attributed this delay to the impact of its 2023 acquisition of Credit Suisse, which has significantly enlarged its corporate real estate portfolio. The bank’s revised target was disclosed in its latest sustainability report published on Monday, where it also revealed that the acquisition would lead to a $400 million cost associated with the real estate adjustments.
The decision follows a broader trend among major financial institutions reassessing their climate commitments. Last month, HSBC also revised its timeline, pushing its decarbonisation goal from 2030 to 2050. The delay by UBS, one of Switzerland’s largest banks, comes amid a climate-policy shift within the banking sector. In particular, several US banks, including JPMorgan, Goldman Sachs, and Citigroup, have recently exited the world’s largest climate alliance for financial institutions, the Net-Zero Banking Alliance (NZBA), amidst changing political and regulatory landscapes, particularly after the election of Donald Trump as US president.
Despite the delay, UBS remains a member of the NZBA, which mandates that banks align their goals with the target of limiting global warming to 1.5°C above pre-industrial levels. However, members of the alliance are set to vote soon on whether to relax this commitment and allow for a warming of up to 2°C. UBS’s latest sustainability report reveals that its climate goals are now based on a global scenario where the long-term temperature rise could reach 2°C.
Sergio Ermotti, CEO of UBS, previously stated that the bank was evaluating whether to follow the example of US banks and leave the NZBA, citing concerns about the feasibility of achieving the same climate goals in every region of the world. Ermotti stressed at the World Economic Forum in Davos in January that different countries and regions would face varied challenges in meeting ambitious decarbonisation targets.
In its most recent report, UBS also removed a section related to the integration of environmental, social, and governance (ESG) objectives in the compensation process for executives, a feature that had appeared in previous years. The bank clarified that there was no direct link between senior management compensation and specific climate goals, although executives are still evaluated on their environmental and sustainability-related activities, including supporting clients’ environmental initiatives.
The delay in UBS’s net-zero goal is also partially attributed to “latest regulatory guidance,” which could impact the bank’s long-term strategy. UBS is currently in the midst of a three-year integration process following its acquisition of Credit Suisse, which includes migrating clients and integrating IT systems. This process is expected to be completed by 2026.
