Go sustainable

18 September 2026, 12:07 UTC Chief Investment Office GWM Investment Research

Strategic: Go sustainable Go sustainable Author: Sagar Khandelwal, Strategist, UBS Switzerland AG

• Why? 1) Sustainable investing can deliver competitive returns and alignment with sustainability goals. 2) The current geopolitical environment has reinforced the strategic importance of the energy transition for both security of supply and affordability. 3) We favor diversification across asset classes and exposure to private impact investments (subject to their unique risks).

Electrification, energy security, climate adaptation, and infrastructure investment continue to create commercially durable opportunities across public and private markets. Source: Jason Leung_Unsplash

CIO identifies a number of transformational innovations that and climate resilience. look set to shape global equity markets in the years to come. Each is closely linked to sustainability. Artificial intelligence, We therefore believe the secular case for investing Power and resources, and Longevity, which represent CIO's in a sustainable portfolio approach—diversified across three Transformational Innovation Opportunities (TRIOs), are equities, bonds, hedge funds, and private markets— all themes that invest in companies addressing challenges remains firm, even if the recent experience of sustainable and opportunities across varied fields like resource efficiency, investment strategies has generally seen sustainable stocks food and water security, and rising clean energy demand. underperform global equities. We would note, however, that in fixed income, green bonds have benefited from These topics align with the priorities driving the global tightening credit spreads, and multilateral development sustainability transition, where investment momentum has bank bonds continue to enjoy their liquidity premium over been building. The International Energy Agency (IEA) has conventional government debt. reiterated that to remain on a net-zero pathway, annual clean energy investment must increase to USD 4.5tr by All major asset classes offer sustainable options, which 2030. A key theme from the 2026 Zurich Climate week historically have shown similar return characteristics to was the key role of physical enabling technologies— traditional investments, though risk characteristics differ particularly in power infrastructure—in supporting both particularly for alternatives. We believe that the longer-term decarbonization and adaptation. The electrification of performance of diversified sustainable investing strategies industry, transport, and heating is accelerating demand for will be driven more by investment fundamentals and the grid expansion and modernization. Investment is pouring economic environment than by politics. into high-voltage cables, advanced transformers, and grid optimization solutions, all of which are essential to integrate Sustainable investors can put money to work depending on renewables, manage distributed energy resources, and their intentions and objectives. enhance system resilience against extreme weather. Equity options include: We expect companies supplying cables, transformers, switchgear, and grid management software to see robust • Strategies that predominantly invest in equities of issuers growth, supported by regulatory tailwinds and public and assets providing solutions to sustainability or climate investment. These technologies are not only critical for transition challenges; emissions reduction, but also for ensuring energy security

This report has been prepared by UBS Switzerland AG. Please see important disclaimers and disclosures at the end of the document.

• Engagement equity strategies that predominantly invest opportunity. in equities of issuers demonstrating better operational sustainability or climate transition performance relative to Nonetheless, private market investors need to consider risk peers; factors like leverage, potential defaults, and concentration risks. Investing in private market vehicles also requires a • Strategies that look to generate progress by investing in tolerance for illiquidity and comes with limited disclosure equities of…