UBS has reduced its global sustainability workforce by almost 65%, and its Asia team has been cut in half. Following a 65% reduction in its Asia sustainability team, global banking giant UBS has substantially cut the environmental, social and governance (ESG) and sustainability workforce globally, cutting nearly half of its sustainability teams, particularly in Asia.

The cuts follow other planned reductions and reassessments as the bank restructures its cost base amidst changing market dynamics and cost constraints in critical business lines. The cuts have been particularly significant for ESG consulting, reporting and sustainability groups, which appeared to be well placed to support clients in addressing evolving regulatory requirements and investor demands for climate risk and sustainable finance, internal sources and industry reports indicate.

The bank's sustainability team in Asia was reduced by approximately 50%, resulting in a smaller organisational footprint in key regions across Asia. The contraction has raised concerns among ESG experts about the future of sustainability roles in the financial services sector especially given the growing focus on environmental regulations, climate risk disclosure, and a growing investor demand for sustainable investment opportunities.

These actions are similar to measures being adopted by other financial institutions that are more of a response to a more cautious approach to evaluating the size and structure of ESG teams in response to economic uncertainty and the varying levels of demand for sustainability services, according to analysts in the industry. Reduced capacity internally may make access to bespoke advice about sustainability more difficult for some clients, particularly where regulators are introducing more sophisticated requirements in sustainability reporting or compliance.

Some experts have warned that the loss of sustainability expertise could have negative impact on the larger goal of integrating environmental and social considerations into financial decision making, which is seen as vital in attaining global climate and development objectives. ESG advocates argue that strong sustainability teams on the premises are the key to banks' contribution to decarbonisation, researching the climate risk and guiding capital towards a low-carbon, sustainable infrastructure.

UBS has not been specific about the exact number of jobs that were cut but company sources state that the cut is part of a strategic "overall review" which involves looking at cost efficiency and business priorities in the bank's global operations. The sustainability sector is ever-changing and market watchers will gauge here if the cuts represent a larger trend or simply a rebalancing around economic concerns.