UBS Issues First Green Bonds

UBS has issued its first green bonds which it will use to finance mortgages for low-energy buildings.

Major Swiss bank UBS Tuesday issued its first «green bonds»

They are in two tranches, one of 500 million euros ($595 million) with a five-year maturity and a seven-year one of 250 million francs ($272 million), the bank said in a press release.

UBS said the bonds were issued under its Green Funding Framework which is based on international rules. The framework defines green investments in the form of mortgages on Swiss buildings which meet the Minergie standard for low-energy buildings. The bank intends to expand the pool of suitable assets continually.

The bonds will help UBS kill several birds with one stone. It will be keeping its promise to achieve net-zero greenhouse gas emissions across its entire business by 2050 as well as helping its clients with sustainability.

The «green bonds» will also bolster its balance sheet by helping refinance its mortgage book on a broader basis.

Environmental Balance Sheet

They will also help its environmental balance sheet. A recent study showed 35 percent, or $13.4 billion, of UBS’ loans book’s exposure to what the bank terms climate-sensitive industries was in real estate.

Reducing high-carbon positions on the balance sheet is more important than simply cutting exposure to climate-sensitive sectors such as real estate. We don’t serve the community better by reducing real estate lending, rather, by making real estate lending greener.