March 6, 2020 - UBS Group AG said Thursday that it would no longer finance new offshore-oil projects in the Arctic, thermal coal mines or oil sands on undeveloped land as banks tighten their restrictions on fossil fuels amid pressure from environmentalists and investors.

The Swiss bank declined to provide figures on previous projects it financed, but pointed to how its investments in carbon-related industries are falling. Assets on the bank’s $972 billion balance sheet tied to the energy and utilities sectors, excluding renewables, water and nuclear, shrunk more than 40% last year to $1.9 billion, representing 0.8% of the bank’s product exposure. It added that it would take a closer look at the environmental impact of liquefied natural gas and ultra-deepwater drilling projects before committing financing.

The bank also hit its three-year sustainable-investment goal one year ahead of schedule, as measured by supporting the United Nations Sustainable Development Goals. Core sustainable investments rose to $488 billion last year, more than doubling from 2017 to reach 13.5% of its invested assets.

UBS is among banks that are ramping up their environmental pledges as governments and corporations seek to meet the Paris Agreement on climate change. Last month, Royal Bank of Scotland Group PLC said it would end financing for coal by 2030 and halt lending to oil-and-gas majors by 2021 unless they have a transition plan in line with the Paris Agreement.

The bank already pledged to ban financing for any new coal-fired power plants last year. There are some 115 banks and insurers that have placed restrictions on thermal coal, according to the Institute for Energy Economics and Financial Analysis.

Estimates from the nonprofit Rainforest Action Network also showed that other European financiers have outranked UBS when it comes to funding controversial fossil-fuel projects between 2016 and 2018. UBS was Europe’s fourth-biggest coal-mining financier with $320 million in lending and underwriting, while it was the fifth-largest lender for Arctic oil-and-gas with $300 million, followed by $170 million in financing for tar sands production and pipeline companies that made them the ninth-biggest European lender in the area.