UBS: Transparency and the future of inclusive growth

The “S” of ESG and its impact

My fellow panelists were Laurie Spengler, Bonnie-Lyn de Bartok and Lynette Jefferson, all inclusive growth thought-leaders.

Our discussion was set against a challenging backdrop: economic repercussions from Covid-19, war in Ukraine and the energy crisis, plus inflation that’s rising at the fastest rate in decades. Furthermore, by 2050, the global population is predicted to reach 10 billion people. Feeding everyone demands innovation.

These challenges highlight systemic inequalities in our society. For an inclusive and sustainable future, we need to be more thoughtful about the distribution of resources and wealth. We need better transparency from all players in the capital markets. So, how do we drive more sustainable long term economic growth that is fair and inclusive? That reaches and empowers those who haven’t benefitted in the past?

Identifying solutions for inclusive growth

The “S” of ESG spans multiple dimensions: financial inclusion, health, education, DE&I, employment and decent working opportunities. I asked our specialists what the “S” means to them:

Laurie talked about an impact strategy based on inclusivity: “to fuel participation in society, from housing to employment to education. And the sense of positive opportunity”.

Bonnie-Lyn highlighted the impact and outcomes of corporate behavior and operations, the legacy impact that companies have on society and how they might feed certain systemic issues (labor, the environment).

Lynette focused on conversations around the “S” (especially in the US) that extend to the effects of extreme weather events, access to health care, etc. on diverse communities. She stressed the need for more exploratory work on these topics.

Increased reporting transparency and achieving scale

We know progress on ESG issues is supported, in part, by greater reporting transparency from public companies. Existing environmental frameworks continue to evolve, e.g. the Task Force for Climate Related Financial Disclosures (TCFD) is a widely accepted playbook. But what about “S” frameworks?

Lynette suggested that sustainability frameworks can serve as a blueprint to build out the inclusive taxonomy.

UBS has already signed the World Economic Forum’s Good Work Framework, which supports our guiding principles related to inclusive approaches. Our engagement is driven by UBS' purpose statement: Reimagining the power of investing and connecting people for a better world.

Focus on data

Ultimately, measuring progress comes back to the data question. Data is a challenge across the board for sustainable finance, not helped by the lack of common standards.

Laurie acknowledged the tremendous work being done across the field in harmonizing standards and encouraged we focus on taking action now, even in the face of imperfect data that we expect to continue to improve. At UBS, we support actions that ensure transparency in the public markets is extended to private markets. This is crucial to accessing consistent and reliable ESG data, which allows us to make informed decisions.

No time to waste

The concept of inclusive growth is receiving attention from capital markets, companies and investors as part of the growing focus on ESG. Now is the time for action. It’s up to all of us to be accountable and more transparent about how we support the future of inclusive growth.

Michael Baldinger

Chief Sustainability Officer at UBS

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