UBS joins lenders in setting fossil fuel emission reduction targets

The logo of Swiss bank UBS is seen in Zurich, Switzerland October 25, 2018. REUTERS/Arnd Wiegmann

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ZURICH, March 11 (Reuters) – UBS (UBSG.S) aims to cut its financing of fossil fuel emissions by more than two-thirds by 2030, Switzerland’s largest bank said on Friday, joining lenders setting targets for the first time this year.

More than 100 banks have pledged to reach net zero carbon emissions by 2050 and are under pressure to provide details of the deep, short-term cuts needed if they are to have any chance of meeting their target. Read more

UBS on Friday unveiled plans to cut its loan portfolio funding of emissions caused by the oil and gas sector by 71% through 2030 from a 2020 baseline of 3.781 million tonnes of CO2 equivalent. a bigger discount than those advertised by competitors, but on a relatively smaller loan book.

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The bank said its goal was absolute emissions reductions, as opposed to the more flexible “carbon intensity” measures used by some competitors, which tie emissions to the amount of oil or gas produced.

Its Swiss rival, Credit Suisse (CSGN.S), said on Thursday it plans to reduce its exposure to “funded issues” in the oil, gas and coal sectors by 49% by 2030 compared to a baseline of 37.1 million tonnes of CO2 equivalent in 2020. read More

UBS’s plan does not include coal, which it said was a fringe area for the bank.

HSBC (HSBA.L) announced in February its target to reduce emissions associated with loans to oil and gas customers by 34% this decade, while Citigroup (CN) pledged in January to reduce emissions from energy sector by 29% over the same period. Read more

Other lenders, including Goldman Sachs (GS.N), JPMorgan (JPM.N), Natwest (NWG.L) and Standard Chartered (STAN.L), have also set targets. Read more

UBS’s fossil fuel loan volume fell to $0.7 billion in 2021, it said on Friday. Its overall carbon asset lending exposure was $45.6 billion, or 9.9% of its total customer lending.

UBS also aims to reduce the emission intensity of its loans to power generation companies and residential and commercial real estate loans. Along with fossil fuels, these accounted for a significant share of funded emissions, UBS said, making these priority sectors.

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Reporting by Brenna Hughes Neghaiwi Additional reporting by Simon Jessop Editing by Mark Potter

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