UBS has committed to no longer providing finance for new offshore oil projects in the Arctic, amid efforts to tackle climate change.
"The firm also committed to no longer provide financing where the stated use of proceeds is for new offshore oil projects in the Arctic, greenfield thermal coal mines or greenfield oil sands projects," the bank said in a statement, the Anchorage Daily News reported.
UBS invested about $300m into Arctic oil and gas projects between 2016 and 2018, according to an analysis of banks by the Rainforest Action Network, an environmental group.
The firm also committed to no longer provide financing where the stated use of proceeds is for new offshore oil projects in the Arctic, greenfield thermal coal mines or greenfield oil sands projects"
As part of its new climate strategy, the bank will also consider additional factors — like a company's past environment record and how well it manages methane leaks and oil spills — before investing in liquified natural gas plants and ultra-deepwater drilling projects.
UBS chairman Axel A. Weber said: "As the world's largest truly global wealth manager, we have a responsibility to take a leading role in shaping a positive future for everyone, including future generations. We aim to be the financial provider of choice for clients who want to engage toward the achievement of the United Nations Sustainable Development Goals (UN SDGs) while helping achieve an orderly transition to a low-carbon economy."
One expert told the Associated Press that major oil companies that drill in Alaska do not rely on banks to finance their projects, so divestment from Arctic drilling will mostly affect smaller operators.
The Swiss investment bank joined several other investment companies in pulling funding and support for new offshore projects in the region, the Anchorage Daily News reported.
Several US banks including Wells Fargo & Company, Goldman Sachs and JPMorgan Chase have also announced similar policy shifts stating they were no longer supporting new projects in the region.
More company investors have pulled support since the world's largest asset manager BlackRock urged companies in January to emphasize steps they are taking to combat climate change, the newspaper said.
UBS has already directed $3.9bn of client assets into impact investments related to the United Nations Sustainable Development Goals (SDGs), making substantial headway on a 2017 goal to mobilize $5bn by the end of 2021.