UBS : Sustainability Report 2023 – Supplement

Sustainability Report 2023

Supplement

Table of contents

Page

Introduction .................................................................................................................................................................................... 4

About this supplement .............................................................................................................................................................. 4

Strategy ........................................................................................................................................................................................... 5

Evolving and informing our strategy ........................................................................................................................................... 5

GRI-based materiality assessment ............................................................................................................................................... 8

Supporting our approach to climate - our climate-related materiality assessment ..................................................................... 13

Information supporting our approach to climate and nature .................................................................................................... 20

Sustainable finance at UBS - additional information ................................................................................................................ 22

Supporting our strategy through stakeholder engagement ...................................................................................................... 23

Supporting our strategic goals - our engagement in partnerships ............................................................................................ 27

Assessing the progress of our strategy - our ratings and recognition ....................................................................................... 31

Governance ................................................................................................................................................................................... 33

Our sustainability governance - additional information ............................................................................................................ 33

Controlling risks and metrics .................................................................................................................................................... 38

Sustainability and climate risk policy framework ....................................................................................................................... 39

Case studies on the management of sustainability and climate risks ......................................................................................... 48

Key policies and principles ....................................................................................................................................................... 52

Charter of the Corporate Culture and Responsibility Committee .............................................................................................. 54

Our Code of Conduct and Ethics ............................................................................................................................................. 55

Health and safety statement .................................................................................................................................................... 59

How we ensure suitability ........................................................................................................................................................ 61

Group sustainability and impact management indicators .......................................................................................................... 63

Information on management approaches for material topics .................................................................................................... 64

Environment .................................................................................................................................................................................. 67

Key climate- and nature-related achievements ......................................................................................................................... 67

Our approach to climate .......................................................................................................................................................... 68

Supporting our approach to climate: key enablers ................................................................................................................... 69

Climate-related methodologies - decarbonization approach for our financing activities ........................................................... 71

Climate-related methodologies - defining investment portfolios with net-zero ambition .......................................................... 93

Climate-related methodologies - our own operations .............................................................................................................. 94

Climate-related methodologies - identifying GHG key vendors in our supply chain .................................................................. 95

Reducing our environmental footprint - additional information ............................................................................................... 96

UK Climate Disclosures .......................................................................................................................................................... 105

Social ............................................................................................................................................................................................ 109

Workforce by the numbers .................................................................................................................................................... 109

Charitable contributions ........................................................................................................................................................ 123

Supporting opportunities .......................................................................................................................................................... 124

Additional information on business divisions .......................................................................................................................... 124

Expanding insights ................................................................................................................................................................. 127

Managing sustainability and climate risks ............................................................................................................................... 128

Climate- and nature-related risk methodologies and scenarios ............................................................................................... 128

Additional UBS Europe SE considerations for sustainability and climate risk management ...................................................... 135

Information pertaining to environmental / climate-related risk management regulations in Asia Pacific .................................. 144

Information on UBS Group AG pursuant to the Swiss Ordinance on Due Diligence and Transparency in relation to Minerals and

Metals from Conflict-Affected Areas and Child Labor ............................................................................................................ 146

Other supplemental information .............................................................................................................................................. 148

UBS Sustainability objectives and achievements 2023 and objectives 2024 ............................................................................. 148

Direct economic value generated and distributed by UBS Group AG consolidated in 2023 .................................................... 158

Information on UBS Group AG pursuant to the Swiss Ordinance on Due Diligence and Transparency in relation to Minerals and Metals from Conflict-Affected Areas and Child Labor ............................................................................................................ 146

Other supplemental information .............................................................................................................................................. 148

UBS Sustainability objectives and achievements 2023 and objectives 2024 ............................................................................. 148

Direct economic value generated and distributed by UBS Group AG consolidated in 2023 .................................................... 158

Basis of Reporting .................................................................................................................................................................. 159

Financial literacy .................................................................................................................................................................... 183

Assurance and certification .................................................................................................................................................... 184

Introduction

About this supplement

This Supplement provides further details about the content set out in the UBS Group Sustainability Report 2023. It should therefore be read in conjunction with the Sustainability Report. Climate- and nature-related content of this Supplement has also been extracted and published separately in the UBS Group Climate and Nature Report 2023.

› Refer to the UBS Group Sustainability Report 2023, available atubs.com/sustainability-reporting

Cautionary Statement | This Supplement may contain statements that constitute "forward-looking statements." Refer to the Cautionary Statement Regarding Forward-Looking Statements in UBS's Annual Report 2023, available atubs.com/investors, for further details.

Notice to investors | This Supplement and the information contained herein are provided solely for information purposes, and are not to be construed as solicitation of an offer to buy or sell any securities or other financial instruments in Switzerland, the United States or any other jurisdiction. No investment decision relating to securities of or relating to UBS Group AG, UBS AG or their affiliates should be made on the basis of this Supplement to the UBS Group Sustainability Report 2023. Refer to UBS's Annual Report 2023, available atubs.com/investors, for additional information.

Rounding | Numbers presented throughout this Supplement to the UBS Group Sustainability Report 2023 may not add up precisely to the totals provided in the tables and text. Percentages and percent changes are calculated on the basis of unrounded figures. Information about absolute changes between reporting periods, which is provided in text and which can be derived from figures displayed in the tables, is calculated on a rounded basis

Tables | Within tables, blank fields generally indicate that the field is not applicable or not meaningful, or that information is not available as of the relevant date or for the relevant period. Zero values generally indicate that the respective figure is zero on an actual or rounded basis. Percentage changes are presented as a mathematical calculation of the change between periods.

UBS Group Sustainability Report 2023 | Supplement | Introduction

Strategy

Evolving and informing our strategy

Our contributions to the advancement of sustainability and culture

We recognize that we have an important role to play in leading debates on key societal topics and, in collaboration with other firms and industry bodies, in setting high standards for these topics in and beyond our industry.

Our key activities in 2023 in this regard are set out in the table below.

Initiative

Focus topicRole / activity of UBS

Key outcome or updates in 2023

Capitals Coalition

Impact

Member of the Advisory Board

Worked towards the ambition that business, finance and governments include holistic capitals (including e.g., natural, social and human capital) in decision-making.

Accounting for Sustainability/ CFO Leadership Network

Sustainable financeMember of working groups

Continued to work with finance leaders to drive a shift towards resilient business models and a sustainable economy.

Glasgow Financial Alliance for Net Zero (GFANZ)

Climate changeFounding member

Active involvement in working groups, and participation in public consultations to support the development of various resources, including those on transition finance, net-zero alignment for financial institutions and public policy.

Institute of International Finance (IIF)

Sustainable FinanceWorking Group members and Chair of the Sustainable Finance Policy Working Group

Active involvement in several sustainable finance-related working groups (Sustainable Finance Policy Expert Group, Nature Expert Group, Disclosure, Data, and Classification Practitioners Group, Risk and Alignment Methodologies Practitioners Group, Blended Finance Working Group) to shape, drive and support industry views on those topics.

Swiss Climate Scores (the SCS)

Climate changeContributed to the introduction of the SCS and is committed to their voluntary use

The Swiss Federal Council launched a new version of the Swiss Climate Scores in December 2023 and announced that it intended to further improve climate transparency for financial products and to further develop the SCS, originally introduced in 2022.

Wolfsberg Forum for Sustainable Finance (WFSF)

Sustainable financeCo-convenor with Institute of International Finance

Host of the WFSF at UBS Center for Education and Dialogue, WolfsbergHeld annual conference for international financial institutions to come together with stakeholders in the public and civic sectors to discuss key sustainability issues relevant for financial sector strategy and engagement.

Asia Transition Finance Study Group

Sustainable financeMember

Asia Transition Finance Study Group Annual Report 2023.

Swiss Sustainable Finance (SSF)

Sustainable financeMember of the board

With over 200 members, SFF continued to support the Swiss financial center in achieving a leading position in sustainable finance, with its Annual Conference and various industry events, such as the Financial Innovation Conference in collaboration with the Swiss Finance Institute and Building Bridges.

Recent publications cover the role of derivatives in sustainable investing, insights for direct real estate investors, as well as the Swiss Stewardship Code which provides asset managers with guidance to encourage active exercising of shareholder rights.

Global Financial Markets Association (GFMA)

Sustainable financeMember of the working groupincluding the sustainable finance working groups of their local Alliance members, i.e.,

Continued regulatory dialogue and consultation responses with focus on international convergence of environmental, social, governance (ESG) disclosures rules, climate risk management, transition planning, and investment practices.

Securities Industry and Financial Markets Association (SIFMA)

Association for Financial Markets in Europe (AFME)Asia Securities Industry & Financial Markets Association (ASIFMA)Swiss Bankers Association (SBA) expert commission sustainable finance

Sustainable financeChair of the expert commission

Regulatory dialogue, consultation responses, policy papers, self-regulation. The SBA's "Guidelines for financial service providers on the integration of ESG preferences and ESG risks into investment advice and portfolio management", and "Guidelines for mortgage providers on the promotion of energy efficiency" came into force on 1 January 2023.

Economiesuisse sustainable finance advisory group

Sustainable financeMember of the advisory group

The "Business guidelines - financial flows and a sustainable economy" publication set six guidelines for the Swiss economy in order to take advantage of sustainable finance while addressing relevant challenges.

UK Finance sustainable finance working group

Sustainable financeMember of the working group

Continued regulatory dialogue, consultation responses, and thought leadership with focus on international convergence of ESG disclosures rules.

Principles for Responsible Investment (PRI)

Sustainable investmentMember of various groups, including the Stewardship Advisory Committee, Stewardship Resourcing Technical Working Group, Spring Advisory Committee (PRI Stewardship initiative for nature) and Real Estate Advisory Committee.

Participation in dialogue on stewardship resourcing practices, the role of investors in addressing the systemic risk of nature loss and guidance on responsible investment practices for real estate.

Participation in consultation on the evolving mission of PRI and multiple working groups including active ownership, the role of investors to halt and reverse global biodiversity loss and ESG practice for real estate.

UBS conferences, e.g., sustainable finance conferences, the European conference, the Greater China conference

Sustainable financeOrganizer

Variety of thematic keynotes and panels on sustainable finance, ESG, climate risk, energy transition, etc.

Singapore Green Finance Centre

Sustainable financeFounding partner

Regular dialogue on how to pursue sustainable finance agenda in the region.

NZZ Impact Finance Forum / Sustainable Switzerland

Sustainable finance and sustainability

Main partner

Increase awareness of, and shape the public dialogue on, sustainability and sustainable finance.

Several events including the NZZ Impact Finance Forum, emphasizing cross-industry networking and partnerships.

Global Impact Investing Network (GIIN)

Impact

Member of the Investors' CouncilActive participation in the leadership group for the GIIN and in various working groups and events.

Operating Principles for Impact Management (the Impact Principles)

Impact

Founding signatory, advisory board member

Active contribution to continued growth of signatory base; integration of the Secretariat for the Impact Principles into the GIIN as host.

Principles for Responsible Banking (the PRB)

Impact

Founding signatory

First external assurance of our PRB reporting

Continued implementation of PRB with combined reporting for UBS and CS.

Financial Stability Board Task Force on Climate-related Financial Disclosures (the TCFD)

Climate changeMember of the TCFD and aligning UBS disclosure with TCFD recommendationsAnnouncement by the Financial Stability Board of the completion of the work of the TCFD, with the International Sustainability Standards Board (ISSB)'s Standards fully incorporating the TCFD recommendations.

Net Zero Asset Managers initiative (the NZAMi)

Climate changeFounding signatory

In 2023, continued implementation of UBS AG Asset Management's target to align 20% of its total assets under management (AuM) with net zero. In 2024, this Pre-acquisition UBS aspiration will be reassessed.

Net-Zero Banking Alliance (NZBA)

Climate changeFounding member

Active involvement in working groups and participation in public consultations to support the development of various resources, including those on climate target setting, transition financing, data and methodologies, etc.

UN Environment Programme Finance Initiative (the UNEP FI)

Climate changeMember

Co-chaired the UNEP FI Principles for Responsible Banking Nature working group that developed initial guidance on nature target setting for financial institutions.

Climate Action 100+ (CA100+)

Climate changeParticipation in 21 company engagements, co-leading six of them

Co-chair European diversified mining engagements working group

The initiative grew to encompass more than 700 investors managing more than USD 68 trillion in assets under management, engaging with 170 companies.

Launch of CA100+ Phase 2.0 with core goals through to 2030, enhanced lead engagement model and strengthened engagement strategies.

Publication of net-zero diversified mining standard.

Institutional Investor Group on Climate Change (the IIGCC)

Climate changeMember of the European regional network

Participating in the Net Zero Engagement Initiative

Contributor to the Bondholder Stewardship Working GroupThe initiative comprises more than 400 members managing more than USD 68 trillion in assets under management.

Launch of the Net Zero Engagement Initiative to build on and extend the reach of investor engagement beyond the Climate Action 100+ focus list.

World Energy Council (the WEC)

Climate changeBoard member of the regional Swiss WEC

Global platform debating clean, affordable and reliable energy sourcing and developments.

Swiss Center of Excellence on Net Zero Emissions (SCENE)

Climate changeAdvisory Member

Newly established in 2023, with integrative and transdisciplinary approach of the ETH domains (PSI, Empa, WSL & Eawag) to pursue holistic research in six action areas (Biomass, Carbon Capture, Efficient Technical Cycles, Low Carbon Energy Systems, GHG, Net Zero Institute Roadmap).

Taskforce on Nature-related Disclosures (the TFND)

BiodiversityMember of Taskforce

Contributed to the development of a framework for organizations to report and act on evolving nature-related risks.

FAIRR

Biodiversity / climate changeInvestor participant in collaborative engagement initiative on working conditions in global meat supply chains. Leading on two of the seven companies engaged through the program

Encompasses 93 investors with more than USD 21 trillion in assets under management.

Roundtable on Sustainable Palm Oil (the RSPO)

BiodiversityMember

Participation in the Financial Institutions Consultative GroupCompleted review of its 2018 RSPO Principles and Criteria and 2019 RSPO Independent Smallholder Standard. It will commence its consultative technical revision process to produce revised standards in 2024.

Thun Group of Banks

Human rightsConvener

Continued exchange of learning pertaining to the implementation of the UNGPs in banks.

Wolfsberg Group

Financial crime preventionFounding partner

Wolfsberg papers published in 2023 included a key paper on Payment Transparency standards, a joint response with the IIF on the FATF public consultation on Risk Based Guidance on Recommendation 25, and consultation responses for the UK's HMT Consultation on the AML/CTF Supervisory Regime, on the EBA CP202311 (revised Guidelines on money laundering and terrorist financing (ML/TF) risk factors), and on the FATF paper on non-profit organizations. Updated FAQs and Standards for Correspondent Banking Due Diligence was also published.

SEIF Tech for Impact Awards

Sustainable innovationMain partner

Social Innovation Award sponsor and jury member

Supported the Social Innovation Award winner with prize money and a strategy workshop with our team of experts. Additionally, SEIF provides an opportunity for early-stage impact tech entrepreneurs to increase international awareness, build a reputation, connect with impact investors, corporate partners and a broader network of impact driven stakeholders.

Green Fintech Network

Sustainable innovationMember of Board

As the first bank to join the network, UBS wants to actively support the development of innovative and scalable solutionsAims to foster the Swiss green digital finance ecosystem and support the development of Switzerland into a global leader in green fintech innovation.

International Sustainability Standards Board (ISSB) Investor Advisory Group

Sustainable financeMember of the ISSB Investor Advisory Group

Publicly endorsed the adoption of ISSB IFRS S2 climate-related disclosure standards in support of establishing market infrastructure to enable consistent, comparable climate-related disclosures at a global level.

GRI-based materiality assessment

Our GRI-based materiality assessment helps us to ensure that our sustainability disclosures reflect our stakeholders' expectations and concerns. It also informs our firm's discussions as we evolve our approach to sustainability. Our approach is grounded in recognizing the importance of engaging with subject-matter experts and listening to key stakeholders to inform and evolve our sustainability strategy.

To address the complexity that arises from (differing) materiality assessment requirements and expectations by bodies relevant to our sustainability disclosures, we have taken several actions on both the existing and forthcoming (notably EU CSRD-ESRS) requirements. Specifically on the double materiality concept, we have taken several steps to, on the one hand, already advance towards it in our Sustainability Report 2023 (SR2023) and, on the other, ready UBS for the requirements pertaining to financial year 2024. These actions included:

• - establishing a double materiality working group to develop a methodology leveraging existing assessments;

• - reviewing Materiality Assessment Team (MAT, see below) membership to align with the sustainability matters outlined in the ESRS, including nature-related; and

• - seeking external guidance pertaining to double materiality.

Credit Suisse is reflected in our GRI-based materiality assessment, which we managed by firstly integrating the Credit Suisse materiality assessment from 2022, before conducting a new group assessment for 2023.

› Refer to the "Supporting our approach to climate - our climate-related materiality assessment" section in this

Supplement for our climate-related materiality assessment

Methodology

Definitions

We aligned our assessment methodology to GRI Standards, which are focused on impact reporting for a multi-stakeholder audience. To assess our impact, we rely on the GRI Universal Standards 2021 revised definitions for the following:

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The "impact" is the effect the organization has or could have on the economy, the environment and people, including on their human rights, which in turn can indicate its contribution (negative or positive) to sustainable development. Note: impacts can be actual or potential, negative or positive, short-term or long-term, intended or unintended, and reversible or irreversible.

- The "material topics" represent the organization's most significant impacts on the economy, the environment and people, including impacts on their human rights. The definition was revised to focus on impact, engagement with relevant stakeholders to form part of identifying and assessing an organization's impacts and informs the process for determining material topics.

The degree of materiality ("very high," "high" or "medium") was qualitatively assessed with the help of internal subject-matter experts. Their inputs considered the scale and scope of actual or potential impact (to the economy, the environment or society), the likelihood and irremediability.

Process

Our process consolidates both past material topics that remain relevant and newly identified topics. In 2023, we refreshed our assessment, starting with a review of our organizational context (i.e., activities, business relationships, sustainability context, stakeholders), before completing the three main process steps: desk research, integration of the Credit Suisse materiality assessment, stakeholder consultation and final review. We manage the materiality assessment process through our internal, cross-business divisional and cross-regional MAT.

Step 1: Desk research

Step 2: Stakeholder consultation

Step 3: Final review

• - We developed an initial list of material topics and subtopics based on internal and external sources.

• - Integrated Credit Suisse impact.

We consulted internal subject-matter experts, including those interacting with stakeholders directly, to add, refine and prioritize our self-assessed materiality list of topics.

-

We had the outcome of the materiality assessment and final list of topics verified by senior management and reviewed for external assurance purposes, prior to public disclosure in the UBS Group Sustainability Report.

Organizational context

Before identifying our actual or potential impacts, we considered the sustainability context across our activities and business relationships, including:

• - our purpose and strategy;

• - our sustainable finance products and services, business relationships and stakeholders; and

• - new products or services (for the climate materiality assessment only, pertaining to risks and opportunities).

In this context, we identified which stakeholders and experts should inform the determining of our material topics. Internal subject-matter experts were consulted via group discussions.

Integration of Credit Suisse

Credit Suisse's impact was integrated in the 2023 UBS materiality assessment as part of the first (desk research) step. Credit Suisse has conducted GRI-based materiality assessments since 2013, taking a similar approach to UBS.

The GRI-based materiality assessment of Credit Suisse in 2022 took into account industry-relevant sources, such as international standards, policy trends, and other developments and also included feedback from selected internal experts and external stakeholders to validate the list and prioritize issues based on perceived associated potential and/or actual impacts. In addition, through regular engagement with stakeholders, perspectives from investors, analysts, policymakers, non-governmental organizations (NGOs) and sustainability experts were considered.

Credit Suisse material topics were integrated into the 2023 GRI-based materiality assessment by comparing the two material topics list from 2022 to identify possible gaps and differences. The comparison showed that Credit Suisse had more material topics identified (16 in total) than UBS (9 in total). However, further analysis of the definition of the topics showed that both banks had identified the same topics as material. As a result, no material differences have been identified between the two GRI-based materiality assessments.

The integrated list was submitted to the MAT, which includes employees involved in the Credit Suisse 2022 GRI-based materiality assessment.

Governance

Reviewed by the UBS Group BoD' Corporate Culture and Responsibility Committee (the CCRC), UBS's GRI-based materiality assessment process is managed by our MAT. The MAT consists of a group of employees who deal with stakeholder expectations and concerns in their respective roles. Their regular engagement with clients, employees, investors, suppliers, regulators and governments, communities, and civil society ensures that the views of these stakeholders are adequately considered. The MAT is responsible for delivering the outcome of the materiality assessment to the CCRC and permanent guests on an annual basis and oversees the aggregation process, following three principles.

• - Completeness: the MAT reviews the long and short lists and their aggregation into a prioritized list.

• - Accuracy: the MAT challenges the approach, provides access to relevant resources, and helps to overcome hurdles throughout the process.

• - Relevance: the MAT reviews all decisions in terms of relevance for the stakeholders they represent.

Execution

Desk research - identifying impact

We conducted initial desk research to identify general areas where negative or positive impacts are mostly likely to be present relative to our own activities, business relationships and stakeholders. During this scoping exercise we considered the internal and external stakeholder sources listed below.

Internal sources

External sources

• - UBS climate risk materiality assessment

• - UBS climate-related opportunities materiality assessment

• - UBS's 2022 materiality topics list

• - Credit Suisse's 2022 materiality topics list

• - G7 Communiqué

• - G20 Communiqué

• - WEF Global Risk Report

• - ECOFACT's Top 5 Trending Topics

• - FINMA Risk Monitor

• - Peers' material topics disclosed

• - ECB's climate-related risks to financial stability May 2022

• - PRI's Strategic Plan 2021-2024

Stakeholder consultation

During the materiality assessment process, we considered feedback from clients, investors, NGOs, media, policymakers and employees via polls and open discussions. Our Corporate Responsibility team also regularly gathers feedback on emerging issues and the quality of our reporting and impact from various sources, including other experts at our firm, stakeholder inquiries, questionnaires and rating firms. We also built on the findings derived from stakeholder roundtables conducted in 2022.

› Refer to the GRI-based materiality assessment in the Supplementary Information to the UBS Sustainability Report 2022 available atubs.com/sustainability-reporting for more details on the stakeholder consultation › Refer to the GRI-based materiality assessment in the Credit Suisse Sustainability Report 2022 for more details on the Credit Suisse 2022 assessment process

Outcome

The topics considered as material for UBS are very similar to those identified in previous years and fall into three GRI impact categories: the economy, the environment and society. Our 2023 list of material topics accounted for those assessed in our 2022 materiality assessment and were compatible, with limited changes, notably:

We made sure to reflect potential positive and potential negative impact in the description of the topics, where considered appropriate.

Sustainable finance: Sub-topics "sustainable investing" and "impact investing" were combined and "sustainable financing" was added to reflect the sustainable products offering (together with "ESG research"), and reflect UBS's progress.

Regulatory compliance: "Tax authorities" was added because it was not explicitly included before (with "GRI 207: Tax" listed as a GRI topic). In addition, "responsible marketing" was added as sub-topic to highlight UBS's efforts.

Climate and nature: In the description of the topic, the term "own emissions" was renamed to "environmental footprint" to reflect the broad range of measurements.

Technology: "Technology" has replaced the term "Digitalization" as the latter was deemed too narrow. The new topic name will be able to cover all related subtopics, including; "data security and protection" and "ESG data management and governance", which were added to reflect UBS's progress. Moreover, the environmental icon was added to emphasize our commitment to improve energy efficiency.

Employees: The language of the GRI-based materiality assessment was aligned with the language in the overall report and "employee representation" was added as a sub-topic.

Social impact and human rights: The environmental icon was added to reflect the impact on the environment.

The 2023 GRI-based materiality assessment was reviewed by Ernst & Young (EY) in line with the revised GRI 3 Material Topics 2021 Standards. The assurance report can be downloaded fromubs.com/gri.

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