A debt product that is backed by the World Bank was launched by the UBS. The product is aimed at ethical investors.
The Swiss bank has entered into a partnership with Sustainalytics, a corporate governance research firm, in order to introduce the global sustainability signatories index. Sustainable development notes are issued by the World Bank through its International Bank for Reconstruction and Development that are direcly linked to the said index that is composed of 100 firms that have signed up to a corporate sustainability initiative called the United Nations global compact that emulates the social, governance, and environmental goals of the United Nations. The notes are being underwritten by the UBS.
The signatories of the said compact is required to comply with its 10 principles on labour, human rights, anti-corruption, and the environment.
Tobacco and energy firms, companies that are involved in controversies and firms that have a severe effect on the society and the environment will be excluded from consideration.
The members of the said index will then be selected for inclusion based on an evaluation of their policies on significant sustainability issues
The product aims to attract ultra-wealthy family offices and clients. The investors will now be given six weeks to sign up to the dollar-denominated notes. It will pay no coupon, however, it will return the initial payout plus any positive return of the index after a period of seven years. The top index components include Kimberly-Clark, HP, and Johnson & Johnson.
Michael Nelskyla, the head of investor solutions at UBS Investment Bank, stated: “We are privileged to work with the World Bank and the UN systems to offer new innovations to support the sustainable development goals.”
He added: “This effort reflects our commitment to be the leading provider of products that help align our client’s financial objectives with their priorities to support sustainability.”