Robust demand for sustainable investment solutions has seen UBS Asset Management's climate aware strategy surpass US$2 billion in assets under management (AUM).

Launched in February 2017, the Swiss asset manager’s climate aware portfolio of funds reached US$2.07 billion in AUM as of June 30 2019. According to the Zurich-based firm, this milestone reflects strong client demand for sustainable investment solutions.

Rather than solely reducing exposure to companies with higher greenhouse gas emissions through an exclusion strategy, the fund manager claims to have calibrated its strategy to companies better prepared for a low carbon outlook and the two-degree reduction scenario.

"Faced with the serious environmental and financial challenges posed by climate change, it is simply no longer an option for policymakers, companies or investors to ignore climate risk,” says Michael Baldinger, global head of Sustainable and Impact Investing, UBS Asset Management.

“We believe that the financial industry plays a key role in the transition to a world less dependent on carbon. Clients are increasingly seeking out opportunities to align their investment targets, with their obligations to incorporate sustainable investment factors within their asset allocations,” Baldinger adds.

While the UBS climate aware funds are not available in Asia, the demand from the region from both institutional and private clients for investment solutions that embrace environmental, social, and governance (ESG) as well as sustainable investment is substantial.

According to the 2019 Asia Sustainable Investing Review conducted by Standard Chartered Private Bank, high-net-worth investors in Asia are expected to increase their allocation in sustainable investments to almost 20%, bolstered by a growing desire to create a better future through their investment dollars.