UBS (UBS) soon plans to push further into sustainable investing with a series of indexes that can be used to create ETFs and other investment products for retail investors, annuities and retirement funds. The indexes will include a global sustainability index and indexes aligned with the UN’s Sustainable Development Goals, like eliminating hunger.
The global bank, which has more than $1 trillion in assets invested in sustainable strategies — a third of global assets under management — plans to amplify the impact of the indexes by channeling a yet-to-be-determined percentage of revenues that they generate to the Optimus Foundation, UBS’s philanthropy arm, according to Michael Nelskyla, head of investor solutions Americas, UBS Investment Bank.
If dollars are generated from an index tied to assisting veterans, say, Optimus will research and fund charitable causes that assist veterans, Nelskyla said Thursday at a global UBS event on its sustainable and impact investing efforts.
This one-two-punch strategy turns an ETF investment into something more akin to an impact investment — strategies used by institutional investors and high-net-worth individuals to have direct bearing on social and environmental causes. One reason for taking this unusual approach is many larger investors evaluate sustainable investment products “on the basis of a verifiable link and measure of impact in a particular space,” he said in a later interview. “Optimizing impact is key.”
Nelskyla also says the Optimus donations will boost engagement with distributors, advisors, charitable partners and clients, who “may in addition choose to match or add to the donations.”
While securities regulations prevent UBS from revealing details of the indexes, Nelskyla says they are likely to include a global sustainability index as well as themed indexes such as a veterans impact index, a social quality LGBTQ investment as well as indexes linked to the environment and clean energy.