Julius Bär Gruppe : Sustainability Report 2022

SUSTAINABILITY

REPORT 2022

JULIUS BAER GROUP

Julius Baer Sustainability Report 2022

CONTENT

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FOREWORD

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SELECTED HIGHLIGHTS OF THE YEAR

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A CONVERSATION WITH YVONNE SUTER, OUR HEAD OF SUSTAINABILITY

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SUSTAINABILITY AT JULIUS BAER

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MATERIALITY

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PROGRESS TOWARDS STRATEGIC PRIORITIES IN 2022

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STRATEGIC PRIORITIES IN 2023

AND BEYOND

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RESPONSIBLE WEALTH MANAGEMENT

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RESPONSIBLE CITIZENSHIP

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DATA AND DISCLOSURE

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Julius Baer Sustainability Report 2022

FOREWORD

A turbulent year for world affairs and finance has demonstrated the urgency of today's major challenges. The events of the past twelve months have strengthened our ambition to empower our clients, employees and broader stakeholder groups to have a positive impact, in line with our Group's strategy and our purpose to create value beyond wealth.

2022 was a challenging year for our industry and our clients. War broke out in Europe for the first time in decades, geopolitical tensions rose, and inflation spiralled in economies across the world, contributing to increasing cost of living for most. While 2022 felt like the first post-pandemic year in many regions, Covid-19 has left its mark in different sectors and across global supply chains. All these turbulences led to increasingly volatile markets, and we experienced the most difficult environment since the financial crisis. At the same time, extreme weather conditions were registered in many locations, illustrating existential issues for humanity such as climate change and inequalities, which have vital impacts not only on the environment but also on society.

To contribute to tackling these issues, Julius Baer follows a holistic approach to sustainability, which we continue to embed across our business. To understand current sustainability issues that may inform financial risks as well as our possible impact on society and the environment, we conducted

a new materiality assessment in 2022. The 16 issues identified as most material to our company, with 'climate change and low carbon' as the most important issue in particular, broadly confirmed our sustainability strategy and provided insights into how we can further develop it. Addressing the overuse of natural resources and the underuse of human resources, our global sustainability strategy is a key enabler of our strategy for the new 2023-2025 cycle. As we aim to create value beyond wealth for our clients through responsible wealth management, we want to fulfil our obligations as a responsible citizen at the same time.

As a wealth manager, it is crucial that we provide our clients with all the credible information they need to make their own educated decisions and align their financial choices with their personal values. Not only have we identified sustainability as a growth and business opportunity, but it is also an excellent conversation starter, particularly as we aim to build bridges across generations. When our clients begin their sustainability journey, the starting point for us is always to identify what matters to them personally.

Empowering our clients for positive impact goes through responsible wealth management. In 2022, we focused on providing more transparency to our clients, for example through enhancing our proprietary ESG investment rating methodology or distributing our first ESG client reports to eligible clients in Switzerland and Luxembourg. We aim to further roll out this initiative globally until 2025. To create connections, we bring together like-minded clients particularly interested in sustainability with thought leaders, entrepreneurs and innovators. Hence, we built up our Sustainability Circle client community, organising events based on our Next Generation research themes, such as the circular economy or low-carbon.

To support all these activities and to provide the best services to our clients, we are aware that we also have to give our employees access to education opportunities. As a part of these efforts, we created the Sustainability Ambassador community consisting of 200 senior relationship managers, investment advisors and portfolio managers, who were enrolled in a two-day specialist sustainability

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Julius Baer Sustainability Report 2022

training. We also conducted education sessions for client-facing employees dedicated to regulatory developments in sustainable finance.

Responsible wealth management is intertwined with our activities as a corporate citizen. While ethical business conduct and risk management lay the foundation for our business activities, we aim to be an employer of choice to attract the best talents and provide services to our clients with care, passion and excellence - our corporate values. A particular focus over the past twelve months has been on our climate strategy. To ensure our alignment with the Paris Agreement and the objective to cap global warming to 1.5°C above pre-industrial level, we defined net-zero emissions targets for our own operations as well as for our treasury, lending and mortgage books. Putting our words into action, this year, we considerably reduced greenhouse gas emissions from our

own operations in comparison to our base year

2019. Additionally, we defined a comprehensive stewardship strategy, encompassing voting and engagement, to enter into a structured dialogue on climate actions with companies that we and our clients are invested in.

While we look back at significant progress at Julius Baer in 2022, the developments of the last twelve months have shown that it is more important than ever to focus on proposing true responsible wealth management to our clients and act accordingly as a responsible citizen - we are committed to 'walking the talk' and hence, avoiding greenwashing. The implementation of sustainability and ESG across business, citizenship and reporting activities is complex. Nevertheless, by working together with our key stakeholders - be it clients, employees, investors, peers, legislators or NGOs - we are convinced that we can contribute to achieving our common goal of tackling climate change and inequalities.

Romeo Lacher	Philipp Rickenbacher
Chairman	Chief Executive Officer

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Julius Baer Sustainability Report 2022

SELECTED HIGHLIGHTS OF THE YEAR

We have continued our efforts to make a positive impact on society and the environment across our strategic priorities of responsible wealth management and responsible citizenship.

RESPONSIBLE				200	RESPONSIBLE
WEALTH		First distribution of	Sustainability	CITIZENSHIP
MANAGEMENT		ESG		Front
		client reports	Ambassadors
				received specialist
		Expanded			training
		Julius Baer			Implementation
		ESG				of internal
	investment rating		carbon pricing
	methodology	Empowering		on air travel
		32%	for positive
		impact	Issuance of environmental
	of AuM classified as
				and social
	responsible or
			reputational risk
		sustainable
				guidelines
	investments	Built up the
			Julius Baer
		Sustainability	More than tripled our
			Circle
				volunteering hours

since 2021

SUSTAINABILITY RATINGS AND INDICES
AA-rated,MSCI ESG1	20.5, Sustainalytics ESG Risk	Constituent, SIX ESG equity indices6
Constituent, SXI Sustainability Index2	Rating4	Constituent, Bloomberg Gender
'B', CDP rating for carbon disclosure3	Constituent, FTSE4GOOD5	Equality Index7

1. MSCI ESG ratings provide insight into ESG risks and opportunities within multi-asset class portfolios. Source: https://www.msci.com/esg-ratings
2. The SXI Switzerland Sustainability 25 Index® includes 25 stocks from the SMI® Expanded Index with the best sustainability scores.
3. CDP is a not-for-profit charity that runs a global disclosure system for investors, companies, cities, states and regions to manage their environmental impacts. Source: www.cdp.net
4. 12th percentile. Sustainalytics' ESG Risk Rating measures a company's exposure to industry-specific material ESG risks and how well a company is managing those risks, with a lower percentile indicating low risk. Julius Baer is rated in the category of asset management and custody services.
   Source:https://www.sustainalytics.com/esg-data
5. The FTSE4Good Index Series is designed to measure the performance of companies demonstrating strong ESG practices. Source:https://www.ftse.com/products/indices/ftse4good
6. ESG Indices from SIX are sustainable benchmarks for the Swiss Capital Market. The goal of SIX is to establish solid, sustainable and independent benchmarks for the Swiss bond and equity markets. We are constituents of the SPI ESG and SPI ESG Weighted indices.
7. The Bloomberg Gender Equality Index (GEI) tracks the performance of public companies committed to disclosing their efforts to support gender equality through policy development, representation and transparency. Source:https://www.bloomberg.com/gei

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