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A UBS branch office in Zurich, Switzerland, on June 22, 2020.Arnd Wiegmann/Reuters

UBS aims to cut its financing of fossil fuel emissions by more than two-thirds by 2030, Switzerland’s biggest bank said on Friday, joining lenders setting targets for the first time this year.

More than 100 banks have pledged to reach net zero carbon emissions by 2050 and are under pressure to provide details on the deep shorter-term cuts needed if they are to have any chance of meeting their goal.

UBS unveiled plans on Friday to cut its loan book financing of emissions caused by the oil and gas sector by 71 per cent through 2030 from a baseline of 3.781 million tonnes of CO2 equivalent in 2020. That amounted to a steeper cut than those announced by competitors, but off a comparatively smaller lending book.

The bank said its target was for a reduction in absolute emissions, as opposed to the more flexible ‘carbon intensity’ metrics used by some rivals, which links emissions to the quantity of oil or gas produced.

Swiss rival Credit Suisse said on Thursday it planned to cut its exposure to “financed emissions” in the oil, gas and coal sector by 49 per cent through 2030 from a baseline of 37.1 million tonnes of CO2 equivalent in 2020.

UBS’ plan does not include coal, which it said was a marginal area for the bank.

HSBC in February outlined aims to cut emissions associated with loans to oil and gas clients by 34 per cent this decade, while Citigroup in January vowed to reduce its energy-sector emissions by 29 per cent over the same period.

Other lenders, including Goldman Sachs, JPMorgan , Natwest and Standard Chartered, have also set goals.

UBS’ lending volume to fossil fuels dipped to $0.7-billion in 2021, it said on Friday. Its overall lending exposure to carbon-related assets was $45.6-billion, or 9.9 per cent of its total customer lending.

UBS also aims to reduce the emissions intensity of its lending to power generation firms and to residential and commercial real estate lending. Together with fossil fuels, these accounted for a sizeable share of the emissions it financed, UBS said, making these priority sectors.

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