After years of reticence to sustainable investing in Asia, adoption is beginning to pick up amongst wealth clients at UBS due to a myriad of drivers including growing awareness, product innovation and market volatility in China.

In the last six quarters, UBS Global Wealth Management has witnessed a sharp acceleration in the adoption of sustainable investing in the region.

As of the first half of this year, client assets in sustainable investments reached $4.5 billion in Asia Pacific – a 350 percent surge compared to the start of 2020. 

The number of clients that have invested in sustainable investment mandates or funds have also grown 140 percent over the last 12 months.

Growing Awareness

One key driver of demand is the growing awareness about sustainable investing and the key related areas of real-world impact.

«With everything that is going on around climate change, governance topics and so on, [clients in Asia] are reading about ESG which you didn’t read about three years ago,» said head of sustainable advisory APAC Mario Knoepfel in a recent media roundtable attended by finews.asia.

«For a lot of clients, it was the first time discussion but this is really not where we start today anymore. Clients are almost at the point where they are directly asking about what they can do rather than be told what this is all about.»

«MyWay»

Another strong tailwind is product innovation efforts at UBS, specifically the introduction of its «MyWay» offering – a discretionary mandate solution with a strong focus on digital interface and customization. 

Since launching in October last year, «MyWay» now has over $1 billion in assets under management, as of the first half of 2021, with 70 percent of its users selecting at least one of its nine sustainability-focused investment building blocks.

The bank continues to innovate the offering with fresh building blocks, including one focused on fixed income in emerging and frontier markets, as well as new modes like «MyFlex», a more flexible version of «MyWay» that allows flexible and unconstrained investing targeting more sophisticated users like family offices.

China Volatility

And a more recent driver of demand not only into sustainable investments but broadly to globally diversified and actively managed portfolios is continued market turbulence in China. 

According to head of global asset allocation & co-head of global investment management APAC Adrian Zuercher, there are three major elements that have caused poor market performance this year: an economic slowdown, credit concerns and an anti-monopoly push.

«We see that global diversification actually has delivered,» Zuercher said, adding that the bank is now undergoing a major initiative to strengthen the core of client portfolios to reap the benefits of diversification. «We always say: don’t be over-allocated to specific regions.»