“We realized that in order to scale up the group’s sustainability strategy, we had to get the ESG [environmental, social and governance] data right first,” says Christophe Tummers, ESG chief data officer (CDO) at UBS. “In an ideal case, I will be able to say that ESG data and technology has been fully integrated into the DNA of the firm in a few years and it wouldn’t need us anymore.”
This is a clear aspiration at a challenging time for the bank. But even during the turmoil of its Credit Suisse acquisition earlier this year, UBS successfully implemented a strong, group-wide and centrally managed ESG data and technology programme to act as the backbone of the group sustainability strategy.
The bank appointed Tummers in January 2022 and created an ESG data team with group-wide accountability to set and implement the strategy.
Shortlisted
- BNP Paribas
“We want to make sure that our shareholders, clients and regulators can trust the data we publish and report; and that is where my background as a classic [chief data officer] comes in,” says Tummers.
For him, building up that trust started with changing the approach to data sourcing. The process is traditionally lengthy because of complicated licensing processes, but UBS has managed to expedite this by forging stronger relationships with the suppliers themselves.
“The old way of licensing cannot work in an ESG context because things move too quickly and we are constantly in need of new data,” he explains.
In 2022, the bank reset the way it licenses and uses ESG data to reduce friction.
The data ranges from physical and transition risk assessment data to climate impact measurements; and UBS has added an operating model to conduct specific data-quality checks to assess tens of billions of ESG data points. Here, the tech platforms were an important selling point. UBS launched a cloud-based platform to work as the entry point for all ESG data, to scale consumption and avoid fragmentation.
This isn’t the only service that UBS clients will benefit from.
“We are offering our clients brand-new sustainable finance tech solutions to support them in achieving their sustainability goals,” says Tummers.
The bank has increased its arsenal of ESG technology tools with esg2go, which gives detailed insights into the sustainability performance of small and medium-sized enterprises. It provides a sustainability rating score for each SME and generates a report with details on the score that the company can pass on to investors and other stakeholders.
In addition, UBS is a co-founder of Carbonplace, a technology platform designed to give clients access to the voluntary carbon market through their banking partners.
And then there is UBS Sustainability Analytics, which helps investor clients monitor the sustainability profile of their portfolios. The analysis gives ratings, business activity checks and carbon emissions reporting.
In an ideal case, I will be able to say that ESG data and technology has been fully integrated into the DNA of the firm in a few years and it wouldn’t need us anymore
Christophe Tummers
Beyond sourcing, the ESG data strategy now includes a metrics hub to store and control the reliability of the 200 ESG metrics that the bank publishes in its sustainability reports and uses in personalized portfolios for private clients.
“We created more personalized portfolios for our private clients and family offices using ESG data to identify companies that manage critical sustainability opportunities and risks across selected sustainability topics, and let investors both state their preferences across one or several of these topics and define the type of activities they would like to avoid,” explains Tummers.
And the bank will be using this data to manage its own portfolios, in line with disclosure regulations.
The team designed an ESG disclosure data product to meet disclosure that is adapted to the still highly fragmented disclosure landscape. It is tailored to several frameworks, including the European Sustainable Finance Disclosure Regulation, the Task Force on Climate-related Financial Disclosures, the Swiss Climate Score and the European ESG Template.
Looking at its own operations, UBS is using data and technology to reduce the environmental footprint of its business. In 2022, the bank partnered with Microsoft to build the first cloud-based smart-building infrastructure using artificial intelligence sensors to make predictive decisions based on usage patterns and weather forecasts.
“Using this innovative solution, we reduced energy consumption of two of our Swiss buildings by about 10% last year,” says Tummers.
UBS also managed to reduce its tech platforms’ energy costs by up to 30% by moving workloads to the cloud and it created a tool to cut software carbon intensity by 15% across 16 regions.
