UBS An ESG View on Earnings Convergence 08 September 2026

ab Global Research 8 September 2026

Global Sustainability Equities

An ESG View on Earnings: Convergence Global Global Sustainability

Victoria Kalb We reviewed English-language earnings commentary and transcripts across a range Analyst of sectors, globally, to assess ESG drivers in earnings. We flagged >300 individual company comments (from P5). As we frequently discuss in our annual Outlooks, sustainability factors interconnect and multiply each other. This was particularly Alisa Dudchak evident in the latest quarter where environmental and infrastructure Analyst constraints are converging. Extreme heat, drought/water stress (also, flooding earlier in the year), grid constraints, power constraints, geopolitical impacts on supply chains, social license to operate effects; these are all being magnified by Shneur Z. Gershuni, CFA surging data centre growth and appearing as either binding constraints to Analyst growth, or as adaptation opportunities. Key discussions during the quarter: increasing grid constraints (acting as a Charles Fruitiere bottleneck on new capacity); extreme weather is impacting energy systems, supply Analyst chains, and crop yields; geopolitics + climate physical risk + record electricity demand + other disruptions are accelerating energy transition, especially in batteries, grid investment, electrification solutions, and also nuclear. Leigha Miyata Analyst Reference quotes are illustrative, companies will be referring to their own positioning with regards to any given factor. Luciana Carvalho ˜ Power demand: no surprise, remains extremely strong. “Exotic solutions” to Product Manager datacentre power needs continue to feature (ship engines, reciprocating engines, etc), as does Bring Your Own Power (BYOP). "Record" demand levels referenced frequently: Lydia Brunton Analyst ˜ Tenaga: “system peak demand scaled consecutive historical high,” including surpassing a record set only three days earlier. ˜ PSEG: “peak summer load of 10,446 MW...highest level in 14 years.” Jarvis Lam Analyst ˜ Engie: “ERCOT...all-time peak above 91 GW on July 22, driven by heat and datacenter load.” ˜ AI & datacentres: again, driving demand everywhere, including of course Kathryn Graves, PhD through power systems. References to “record backlogs” a common refrain across Analyst several sectors, particularly industrials. This is not limited to the US. ˜ Grids remain a critical constraint, globally. Grids face capacity limitations, aging infrastructure remains a material challenge, interconnections are constrained, and Miranda Zhang substantial upgrades, flexibility, and related measures are required to Associate Analyst accommodate new power transmission patterns and changing end-user demand, especially greater volatility in power demand. Extreme weather is also a consideration here. See our previous work on grids including Energy

˜ Security: Grids, the Real Bottleneck? ˜ Uniper: “the biggest...bottleneck facing the construction of new data centres is obtaining a grid connection.” Affordability: a frequent discussion point, particularly around electricity and datacentre demand, but also more widespread, including broader system effects M ESG Environmental Social Governance

of the Middle East conflict such as higher transportation costs. Links to social license concerns, as below. ˜ Extreme weather: heat, drought, wildfire, and El Niño notable for number of mentions, across sectors. Commentary was not always negative; upside potential visible in certain solutions providers (eg, building materials, cooling). We also

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found the number of sellside analysts asking specific questions about extreme weather impacts to be noteworthy. Negative impacts were particularly evident in power generation (especially nuclear and hydro), transportation & logistics (eg, Rhine, Panama Canal, others) and crop yields, with some mention of productivity impact from extreme heat. ˜ Middle East conflict disruption also, unsurprisingly, prominent. Discussion…