Tom, Douglas, welcome.
Tom, If I could start with you, just tell me if you would, the
work that you're doing at UBS, because it's pretty unique.
Thank you, and great to to be here today.
UBS is the world's largest wealth manager.
We have about $5 trillion worth of capital under management,
about a million high-net-worth individuals.
And 95% of our clients around the world say that they want to
use their wealth to try and solve some of the pressing
social,
and obviously, we're here at COP, so environmental problems
the world's facing. My team is a response to that, really.
And this is not a new thing, this is something that's been
happening for the last two decades.
We have about 150 people dedicated to supporting our
clients to maximize their impact, to really think about
how they can do that in a measurable way that really does
drive change.
So clearly the appetite is there. Doug, last time we spoke
on BCG's podcast, you spoke about how banks can be more than
just intermediaries, they can actually be agents of change.
Explain that it was a bit more, if you would.
Yeah.
I think banks have, probably more than any other industry, an
opportunity to create positive social impact.
I mean, Tom was talking about wealth management.
But, in addition to that, in a retail bank, the opportunity for
financial inclusion. In the corporate bank, the opportunity
to integrate social considerations into bonds and
into loans. Just like there's a Scope 1, 2, and 3 for climate,
we think of Scope 1, 2, or 3 for social.
Scope 1, what you can do with your employees.
Scope 2, what you can do with your direct clients, and Scope
3, what you can do with the customers of your clients.
And you have opportunities across all three areas.
One of the issues in this space is measurement, especially
social.
Yours is a very data-led approach, isn't it?
Look, at the end of the day, you're not going to achieve net
zero or (my SDG pin here),
meet the Sustainable Development Goals, unless you prove that you
are, which requires impact transparency.
And what do we mean by that?
We mean, when you make a donation or an investment to
drive impact in an attributed way, can you prove it?
Is it causal?
The best example is probably we're all back here at COP
because vaccines went through a clinical trial like nobody would
take those things if we didn't believe in that efficacy and
proof.
We then need to measure who is being impacted.
And I think particularly in relation to the social impacts,
we just had a a fantastic roundtable talking about just
transition, what are the social impacts of climate change going
to be for communities of disadvantage?
And if we're not driving capital into those communities, at
scale, then we're not going to see the kinds of sustainable
change towards both the Sustainable Development Goals
and net zero that we all want to see.
Ultimately, that's about really clear impact measurement and one
of the things that me and my team are working on is using our
global footprint and the fact that we are one of the largest
global banks, with the wealth management industry at $103
trillion worth of capital. 81% of which says it wants to have
impact alongside that.
That's not happening today.
And one of the reasons that's not happening is because people
don't fully trust the data.
But if we could have a simple, almost a bond rating for impact,
that was like, this is definitely causal, this is
definitely targeting inequality, this is definitely at-scale, or
here's the work that needs to be done.
We think one of the killer apps that will really start to move
capital at scale.
Because as I said earlier, we know investors care.
Yeah, you know, investors care.
Look, Doug, you've been doing a lot of research into this space.
You've surveyed hundreds of leaders and what have you found?
So I think a few key outcomes of this survey that we did.
I think one is: we asked about the relative importance of the
focus of a bank on climate versus social.
And I think historically, they've thought of social being
very important.
I think more recently, there's been more emphasis on climate.
But looking forward, again the bankers are saying that we need
to redouble focus on social.
I think the second point is that what is driving the focus on
social is a little bit different than it is on climate.
We surveyed them and they said the number one factor driving
their climate programs is about regulation,
and particularly in Europe. The number one factor in the social
side of things is the other stakeholder.
So it's about the employees and it's about the clients, right.
And I think the third thing is that more and more bankers are
saying we are going to be addressing social issues, not as
part of a traditional CSR or DEI program, but integrating into
the core of our business and integrating into the core of our
business model.
Does that resonate?
At the end of the day, trying to solve these huge social issues
with a few donations off the side as part of your CSR program
isn't going to cut it.
We have to integrate them into the way the entire economy
works.
Ultimately, that's what we've been talking about is the need
to transition to an impact economy which actually includes
net zero, that properly prices not just the negative
externalities of the planet in investment decisions, which is
what COP is all about, but also the social and economic
contribution of people.
I believe that there will be no net zero without it being
community-led.
You have to take communities with you.
And we see that both in terms of you know, the potential
political backlash against some of these things.
If communities elect governments and they're not happy with
what's happening and understanding the upsides and
the opportunities for them, then you'll get backlash there.
But also, just at a practical level, you know, avoided
deforestation is one of the most important parts to net zero.
It's communities trying to feed themselves that are deforesting
more mangroves and rainforests than anything else.
And unless we find ways for them to prosper in those landscapes,
then we are not going to achieve the goals we want to achieve.
So, social and community is inextricably linked with the
pathway to net zero.
Tom, Douglas, thank you so much.
Thanks, Georgie.