CDP. Module: Introduction. Page: Introduction. Climate Change 2016 Information Request CC0.1

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1 CDP Climate Change 2016 Information Request UBS Module: Introduction Page: Introduction CC0.1 Introduction Please give a general description and introduction to your organization. UBS draws on its over 150-year heritage to serve private, institutional and corporate clients worldwide, as well as retail clients in Switzerland. Its business strategy is centered on its pre-eminent global wealth management businesses and its leading universal bank in Switzerland, complemented by its Asset business and its Investment Bank, with a focus on capital efficiency and businesses that offer a superior structural growth and profitability outlook. Headquartered in Zurich, Switzerland, UBS is present in all major centers worldwide and employs about 60,000 people around the world. It has offices in more than 50 countries, with about 35% of its employees working in the Americas, 35% in Switzerland, 17% in the rest of Europe, the Middle East and Africa and 13% in Asia Pacific. Under Swiss company law, UBS Group AG is organized as an Aktiengesellschaft, a corporation that has issued shares of common stock to investors. UBS Group AG is the holding company of the UBS Group. The operational structure of the Group comprises the Corporate Center and five business divisions: Wealth, Wealth Americas, Personal & Corporate Banking, Asset and the Investment Bank. CC0.2 Reporting Year Please state the start and end date of the year for which you are reporting data. The current reporting year is the latest/most recent 12-month period for which data is reported. Enter the dates of this year first. We request data for more than one reporting period for some emission accounting questions. Please provide data for the three years prior to the current reporting year if you have not provided this information before, or if this is the first time you have answered a CDP information request. (This does not apply if you have been offered and selected the option of answering the shorter questionnaire). If you are going to provide additional years of data, please give the dates of those reporting periods here. Work backwards from the most recent reporting year.

2 Please enter dates in following format: day(dd)/month(mm)/year(yyyy) (i.e. 31/01/2001). Enter Periods that will be disclosed Thu 01 Jan Thu 31 Dec 2015 CC0.3 Country list configuration Please select the countries for which you will be supplying data. If you are responding to the Electric Utilities module, this selection will be carried forward to assist you in completing your response. Select country CC0.4 Currency selection Please select the currency in which you would like to submit your response. All information contained in the response should be in this currency. CHF CC0.6 Modules

3 As part of the request for information on behalf of investors, electric utilities, companies with electric utility activities or assets, companies in the automobile or auto component manufacture sub-industries, companies in the oil and gas sub-industries, companies in the information technology and telecommunications sectors and companies in the food, beverage and tobacco industry group should complete supplementary questions in addition to the main questionnaire. If you are in these sector groupings (according to the Global Industry Classification Standard (GICS)), the corresponding sector modules will not appear below but will automatically appear in the navigation bar when you save this page. If you want to query your classification, please If you have not been presented with a sector module that you consider would be appropriate for your company to answer, please select the module below. If you wish to view the questions first, please see Further Information Module: Page: CC1. Governance CC1.1 Where is the highest level of direct responsibility for climate change within your organization? Board or individual/sub-set of the Board or other committee appointed by the Board CC1.1a Please identify the position of the individual or name of the committee with this responsibility (i) Corporate Culture and Responsibility Committee (CCRC) (ii) (1) Responsibility for climate change (CC) is part of the overall corporate responsibility (CR) and environmental governance and processes. As such the highest level of responsibility for climate change within UBS is the Corporate Culture and Responsibility Committee (CCRC), a Board of Directors (BoD) committee, which, as part of its mandate (reviewing UBS CR policies and regulations, as well as the implementation of UBS's CR activities and commitments), has the responsibility to review and monitor the implementation of UBS and Society Policy, incl. the CC strategy. The CCRC was created in It supports the Board of Directors in fulfilling its duty to safeguard and advance the Group s reputation for responsible corporate conduct and to assess developments in stakeholder expectations (incl. CC) and their possible consequences for UBS. In 2015, Axel A. Weber, Chairman of the BoD, chaired the CCRC that consists of three additional members. The Group CEO and the Global Head of UBS and Society, are permanent guests of the Committee, while the regional presidents attend two of the meetings as guests. During 2015, five meetings were held with a participation rate of 95%. Various senior-level committees and boards are in charge of particular aspects of corporate responsibility. The CCRC is advised by a panel consisting of members of the Group Executive Board (GEB), including the Group CEO, and other senior managers. (2) At the executive level, the UBS and Society Operating Committee oversees the implementation of UBS and Society Policy. The committee consists of the GEB

4 sponsors of the UBS and Society program, Global Head of UBS and Society, divisional and regional executive committee representatives, Chief Communication Officer, Group Human Resources representatives, Head of Group Governmental Affairs, Group Risk Control representative and is supported in its task by the environmental and social risk unit. The committee is chaired by the Wealth and Asia Pacific Presidents, who are also the GEB sponsors of the program. The committee, consisting of business area and regional representatives, focuses on implementing the UBS and Society agenda in their respective areas. (3) Primary responsibility for implementing the UBS and Society Policy lies within the business divisions, which have each appointed a representative. These representatives act as sponsors for UBS and Society (incl CC) related initiatives and are supported by coordinators who assist in overseeing measures implemented by respective units in their divisions. CC1.2 Do you provide incentives for the management of climate change issues, including the attainment of targets? Yes CC1.2a Please provide further details on the incentives provided for the management of climate change issues Who is entitled to benefit from these incentives? The type of incentives Incentivized performance indicator Comment Board chairman Monetary reward Emissions reduction target Of the Board of Directors committees, the Corporate Culture and Responsibility Committee (CCRC) shoulders the main undertaking for corporate responsibility, including our climate change strategy (e.g. meeting our emission reduction target: 75% CO2 reduction by 2020 on 2004 level). The CCRC and its members as a group, are expected to: (i) commit such time to the role as may be necessary for the proper discharge of their duties. An indication of the time expected for this purpose will be set out in each of the CCRC members' letter of appointment; and (ii) have good knowledge of corporate responsibility and relevant political issues and such other experiences in order to perform their duties. The CCRC's chairman (=board chairman Axel Weber) is expected to have good knowledge of the relevant committee's area of responsibility together with experiences that the Board considers desirable in the context of that committee's work. This is in addition to establishing and maintaining a close working relationship with the Group CEO and other GEB members, and providing advice and support when appropriate, including continuing to support the firm s

5 Who is entitled to benefit from these incentives? The type of incentives Incentivized performance indicator Comment Corporate executive team Energy managers Other nonmonetary reward Monetary reward Emissions reduction target Energy reduction target cultural change as a key priority on the basis of our Principles and Behaviors. The share component of the compensation (blocked for distribution for four years) ensures that the Chairman's pay is aligned with the longer-term performance of the firm. Additional information and compensation details of the Chairman of BoD is available in the '2015 compensation for the Board of Directors' section of UBS 2015 Annual Report (p. 361). UBS and Society Operating Committee oversees the operational execution of the UBS and Society Policy. Targets and performance indicators include, e.g. meeting our emission reduction objective (75% CO2 reduction by 2020 on 2004 level) Energy saving is part of the overall CO2 emission reduction strategy (75% CO2 reduction by 2020 on 2004 level) and is factored into targets and compensation. Environment/Sustainability managers Facility managers Risk managers Monetary reward Monetary reward Monetary reward Energy reduction project Energy reduction target Behaviour change related indicator Environmental managers contribute to the UBS climate change strategy to reduce emissions by 75% by 2020 on 2004 baseline. Meeting their individual annual targets within their area contributing to the overall target is factored into compensation/ bonus. Facility managers directly contribute to the UBS CO2 emission reduction strategy. Meeting their individual annual reduction targets within their area is factored into their compensation/ bonus. Environmental and social risk managers to integrate and assess climate change risks for the bank which is part of their annual objectives and factored into compensation. Business unit managers Monetary reward Behaviour change related indicator Performance indicators for business teams include sales / success of sustainable products (e.g. SRI products, SRI and climate change related research) which is factored into individual targets and compensation. Public affairs managers Monetary reward Behaviour change related indicator Communicating about climate change risks and opportunities for the bank is part of annual objectives and factored into compensation (e.g. disclosure according to GRI comprehensive standard). Further Information Page: CC2. Strategy

6 CC2.1 Please select the option that best describes your risk management procedures with regard to climate change risks and opportunities Integrated into multi-disciplinary company wide risk management processes CC2.1a Please provide further details on your risk management procedures with regard to climate change risks and opportunities Frequency of monitoring To whom are results reported? Geographical areas considered How far into the future are risks considered? Comment Annually Board or individual/sub-set of the Board or committee appointed by the Board Global (UBS is active in Europe, Middle East and Africa, the Americas and the Asia Pacific Region) where possible unless there are specific regional/national issues that require a specific consideration. > 6 years We are one of the leading wealth management firms worldwide, and the leading universal bank in Switzerland, backed by a top asset management business and a client-centered investment bank. Therefore, our climate change strategy focuses on the areas of risk management, investments, financing, research and in-house operations. It is in these areas that we believe we can make the greatest contribution to the transition towards a low-carbon economy. In risk management, we are seeking to protect our clients' and our own assets from climate change risks, within our sphere of influence. Outlined in the UBS and Society Policy, climate change risks and opportunities procedures are integrated in our Environmental System that follows and is certified against ISO standards. CC2.1b Please describe how your risk and opportunity identification processes are applied at both company and asset level

7 As outlined in the UBS and Society Policy, UBS manages CC risks and opportunities via its environmental management system (EMS), established according to the international standard ISO for EMS (detailed in UBS ISO manual). UBS developed its first CC strategy in So far, the strategy has been updated twice, in 2012 and UBS monitors implementation on an ongoing basis. The framework helps UBS to systematically reduce risks related to environmental/ CC issues, seize environmental related market opportunities and continuously improve UBS s general environmental/cc performance and resource efficiency. The EMS, structured in an annual cycle consisting of planning, implementation, controlling and review including corrective actions, applies world-wide to all transactions, services and activities involving environmental/cc issues entered into by or on behalf of UBS in the course of business, and includes quarterly reporting. Banking activities and in-house operations are subject to and must be conducted in compliance with this policy. All types of material risks and opportunities (including regulatory, customer behavior changes, reputational and weather-related risk and opportunities) are taken into account. CC risks and opportunities are identified on company and on asset level across the principles of "how we do business" and "how we support clients" of the UBS and Society program. At company level, CC risks and opportunities are brought to the UBS and Society Operating Committee that oversees the implementation of UBS and Society Policy and climate change strategy and defines company level objectives to be submitted to the CCRC, a Board of Directors Committee, for approval. At asset level, CC risks and opportunities are identified and managed within business divisions and business areas using existing processes (risk matrix, transaction frameworks and processes, portfolio reviews, etc). CC2.1c How do you prioritize the risks and opportunities identified? On company level, we identify where and if climate change (CC) has a material impact on UBS as a whole. The critical factor determining materiality is whether any impact from CC on UBS has to be of concern for our shareholders or clients or, in other words, whether CC is a "factor that would make an investment in [UBS] speculative or risky" (as described by the US Securities and Exchange Commission Guidance Regarding Disclosure Related to CC; Final Rule, p. 6294). In this sense, we currently do not see that CC has a material impact on UBS as a whole. We continue to better understand climate change impact on the sector and engage in international efforts to develop reporting guidance and carbon risk management frameworks. On an asset level (certain products and services, client portfolios, transactions, etc.), we seek to protect our clients', and our own, assets from climate change risks, within our sphere of influence. Recognizing that the transition to a low carbon economy will take time and that fossil fuels will continue to dominate energy production for decades to come, we are determined to understand the risks that our clients', and our own, assets are exposed to in the context of uncertain policy and technology developments addressing climate change. We prioritize risks and opportunities by focusing on the impact of climate change and on our exposure to the risk, considering factors such as the product, service, client base, etc. The process to prioritize environmental/cc risks and opportunities is defined within our environmental management system. Each business division assesses and rates the potential for risks/ opportunities arising in the products and services offered according to a step-by-step procedure of evaluation and ranking, review and approval, and documentation. CC2.1d Please explain why you do not have a process in place for assessing and managing risks and opportunities from climate change, and whether you plan to introduce such a process in future

8 Main reason for not having a process Do you plan to introduce a process? Comment CC2.2 Is climate change integrated into your business strategy? Yes CC2.2a Please describe the process of how climate change is integrated into your business strategy and any outcomes of this process i) How the business strategy has been influenced: UBS's first climate change (CC) strategy was developed in 2006 (40% reduction of our greenhouse gas footprint by 2012 on 2004 level). In 2012, with the achievement of our initial CO2 reduction commitment we defined a new CO2 reduction target (-50% by 2016 on 2004 level, early overachieved on 2014). In 2015, we again defined a new CO2 reduction target and business priorities for the coming years. Currently, our goal is to achieve a 75% reduction in our own greenhouse gas footprint by 2020 compared to 2004 levels. Internal environmental experts conducted the review of our strategy, presented it to the UBS and Society Operating Committee, which shaped the strategy and suggested priorities to the Group Executive Board and Corporate Culture and Responsibility Committee (CCRC) for approval (with subsequent regular updates). Influence factors included the long-term science about CC, stakeholder expectations (clients, investors, shareholders, governments/regulators, NGOs, etc), CC-related societal challenges and our business model and how UBS can best contribute to these challenges. (ii) Example of how the business strategy has been influenced: The Swiss Federal and Zurich Cantonal Government expect and honor the private sector to contribute to enhancing energy efficiency. In considering these expectations, we commit to actively optimizing energy efficiency (a further 10% reduction by 2016). We are also determined to support our clients in preparing for success in an increasingly carbon constrained world. As a result, we commit to (1) only supporting transactions of companies operating coal-fired power plants if they have a strategy to reduce coal exposure or adhere to the strict greenhouse gas emission standards recommended by leading international agencies; and (2) not supporting certain coal mining companies and significantly limiting lending and capital raising provided to the sector. iii) Aspects of CC that have influenced the strategy: We consider risks and opportunities we face as a bank directly and indirectly through our clients. Influence factors of the CC strategy are regulatory uncertainty, physical climate change factors and market uncertainty all regarded by their direct impact on us and indirect impact through our clients. Our CC strategy, outlined in our Climate Change Commitment, focuses on five main areas: risk management, investments, financing, research and in-house operations, which includes in-house environmental management and supply chain. The most influencing factor in our CC strategy is the impact of the vital transition to a low-carbon economy on the firm.

9 iv) Components of the short term strategy that have been influenced by CC: The strategy renewed in 2015 (CO2 reduction target -75% by 2020 on 2004 level) consists of the following areas where we believe we can make the greatest contribution to the transition towards a low-carbon economy: a) Investments: helping to mobilize private and institutional capital towards investments facilitating climate change mitigation and adaptation. Our clients will continue to look for investment opportunities and some will increasingly focus on investments facilitating climate change mitigation and adaptation. b) Financing: supporting this transition as corporate advisor, and/or with our lending capacity. We are helping corporate clients raise capital on domestic/international capital markets in order to meet the high investment levels required for the transition to a low-carbon economy. In Switzerland, we are also supporting private clients in renovating their private homes sustainably and innovative small and medium-sized enterprises (SMEs) in providing solutions for climate change mitigation and adaptation. c) Research: offering world-class research capacity to our clients on climate change issues. Building on our renowned expertise, we act as a thought leader and expert advisor to our clients on impacts of, and solutions for, climate change. d) In-house operations: reducing our own greenhouse gas footprint. We are positioning our inhouse operations in support of a low-carbon economy by further investing in sustainable real estate and efficient IT infrastructure and limiting business travel-related CO2 emissions. e) Engagement & disclosure: reporting and communicating transparently about the progress of our strategy. We are engaging with our stakeholders on climate change issues and continue to raise awareness among our employees. In addition, we are disclosing the progress we make in executing our climate strategy through established standards, such as the Global Reporting Initiative and CDP. v) Components of long term strategy that have been influenced by CC: We recognize that institutions are increasingly expected to play a key role in the transition to a low-carbon economy and, we are determined to support our clients in preparing for success in an increasingly carbon-constrained world. As one of the leading wealth management firms worldwide, and the leading universal bank in Switzerland backed by a top asset management business and a client-centered investment bank, our short and long term climate change strategy focuses on the above-mentioned areas. The long-term timeframe spans over the next 30 years, by which some countries, for example Switzerland, intend to having transformed into a low carbon economy (Switzerland Energy Strategy 2050). The components are the same as of our short-term strategy with a focus on risk management, investments, financing, and research. vi) How we are gaining strategic advantage: By including environmental and social considerations in our strategic thinking, risk management and control framework, and in the products and services we offer our clients, we gain and retain business and position ourselves for future growth. vii) Most substantial business decisions that have been influenced by CC driven aspects of strategy: In 2015, we executed our CC strategy which was reviewed during the year and focuses on risk management, investments, financing, research, in-house operations. Our targets for 2015 included executing our 2020 greenhouse gas reduction target and operational environmental targets for energy, water, paper and waste; refining our sustainable real estate and IT infrastructure strategy; establishing a dedicated industry-leading platform offering comprehensive research, advisory and product capabilities in sustainable investments and philanthropy, and proactively managing environmental/ CC and social risks. As a concrete example, during 2015 our Investment Bank provided equity or debt capital market services that provide a positive contribution to climate change mitigation and adaptation, either by supporting equity and debt capital market transactions (total deal value CHF 10 billion) or acted as advisor (total deal value CHF 35 billion). CC2.2b Please explain why climate change is not integrated into your business strategy

10 CC2.2c Does your company use an internal price of carbon? No, and we currently don't anticipate doing so in the next 2 years CC2.2d Please provide details and examples of how your company uses an internal price of carbon CC2.3 Do you engage in activities that could either directly or indirectly influence public policy on climate change through any of the following? (tick all that apply) Direct engagement with policy makers Trade associations CC2.3a On what issues have you been engaging directly with policy makers? Focus of legislation Corporate Position Details of engagement Proposed legislative solution Other: Implicit or explicit prices on carbon Support In 2015, in support of international efforts leading into the Paris Climate Change conference, UBS signed the World Economic Forum s open letter from CEOs to world leaders urging climate action. We believe that effective climate policies have to include explicit or implicit prices on carbon achieved via market mechanisms or coherent legislative measures according to national preferences, which will trigger low-carbon investment and transform current emission patterns at a significant scale. We support global mitigation approaches that promote cost effective incentives for cutting emissions, while respecting level playing fields and preventing carbon leakage. We urge a strategic action agenda supported by clear and consistent policies and robust monitoring, reporting and verification (MRV) that will complement business efforts to stimulate innovation as well as

11 Focus of legislation Corporate Position Details of engagement Proposed legislative solution Other: Voluntary standards for climate-related disclosure Support In 2015, UBS signed the European Financial Services Round Table statement in support of a strong, ambitious response to climate change collaborative actions across value chains, and to develop and scale up alternative and renewable energy sources, promote energy efficiency, end deforestation and accelerate other low-carbon options and technologies such as ICT. We welcome transparency and disclosure regarding investments and policies in relation to all energy-related activities including fossil-based and alternative. We support assessments of resilience to climate risks and call for new instruments to stimulate alternative energy and efficiency projects as well as green bonds. This will enable climate action to be integrated with reporting and instruments. We encourage governments to set science-based global and national targets for the reduction of GHG emissions and the development of alternative energy sources. We will work with policy-makers and regulators to incentivise and leverage further private climate finance, co-operating closely with national and international development banks. There is further scope for expanding the activity of these existing and emerging institutions to fulfil their potential in driving private investment flows into low carbon and renewable energy projects. It is equally important that they both take emissions positively into account when assessing a project and ensure their wider investments do not undermine climate change objectives. We will work with policy-makers and companies on consistent voluntary standards for disclosure by companies. A consistent and comparable mechanism for disclosing information on carbon emissions and climate change strategy will assist sustainable investor decisions and allow stress testing of climate change risk within a portfolio. We will work with policymakers, regulators and companies to develop methods for assessing forwardlooking exposure to climate-related risks, providing greater transparency of preparedness and sensitivity to climate risk of investee companies and issuers. CC2.3b Are you on the Board of any trade associations or provide funding beyond membership? Yes CC2.3c

12 Please enter the details of those trade associations that are likely to take a position on climate change legislation Trade association Is your position on climate change consistent with theirs? Please explain the trade association's position How have you, or are you attempting to, influence the position? Swiss Bankers Association Verein für Umweltmanagement und Nachhaltigkeit in Finanzinstituten (VfU) Consistent Consistent Position on Switzerland's energy strategy (which is linked to climate change as it directs a transition to renewable energy sources) is supportive, with some reservations on the impact on the Swiss economy and energy security which is a high priority for banks. VfU has a position statement on the financing of the energy transition. The six core aspects are: 1) security of energy service, 2) security of planning, 3) currently continued support of renewable energy investments, 4) energy transition is more than renewable energy development, 5) supporting cap and trade schemes, 6) regulating market may impede the financing of the energy transition. This position was mainly developed with the energy transition in Germany in mind. As a member of the Swiss Bankers Association (SBA), UBS took part in the consultation process for the Swiss Energy Strategy We worked on influencing the position in line with our climate change commitment and the role of banks in the transition towards a low-carbon economy. We have influenced the position as a member of the board and have participated in the discussions to shape a position paper that would be in line with our climate change strategy. CC2.3d Do you publicly disclose a list of all the research organizations that you fund? CC2.3e Please provide details of the other engagement activities that you undertake CC2.3f

13 What processes do you have in place to ensure that all of your direct and indirect activities that influence policy are consistent with your overall climate change strategy? UBS also chairs the joint CSR working group of major Swiss trade associations economiesuisse and SwissHoldings, which consider sustainability topics, including climate change. It is also a member of economiesuisse's working group on energy, which also considers the climate change topic, including how it pertains to policymaking in Switzerland. UBS's governance of sustainability ensures that relevant functions are involved and informed about UBS's climate change strategy. The Board of Directors' Corporate Culture and Responsibility Committee (CCRC), chaired by the UBS Chairman, and with the Group CEO and the Global Head UBS and Society as permanent guests, meets six times a year. Two of these meetings are also attended by UBS's business regions presidents as guests. The CCRC regularly considers UBS's strategy on climate change, including also external activities that influence policy. The UBS and Society Operating Committee, chaired by the regional president for APAC and the president for Wealth (both members of the UBS Group Executive Board), ensures that relevant aspects are communicated to and discussed with the CCRC and relevant functions within the firm, including Group Governmental Affairs. UBS also has a cross-region and cross-business sustainability think tank in place, the Sustainability Council, in which sustainability topics, including climate change, are discussed with relevant functions (including Group Governmental Affairs and Group Regulatory Relations). Conclusions from the Council are also relayed to the Chairman and the CCRC. Internal communication of the climate change strategy ensures all employees are informed about the climate change strategy. For example, several intranet articles in the context of our annual environmental awareness raising campaign informed all employees about our CC strategy and the economic impact of CC on the economy and the sector. CC2.3g Please explain why you do not engage with policy makers Further Information Page: CC3. Targets and Initiatives CC3.1 Did you have an emissions reduction or renewable energy consumption or production target that was active (ongoing or reached completion) in the reporting year?

14 Absolute target Renewable energy consumption and/or production target CC3.1a Please provide details of your absolute target ID Scope % of emissions in scope % reduction from base year Base year Base year emissions covered by target (metric tonnes CO2e) Target year Is this a sciencebased target? Comment Abs1 Scope 1+2 (marketbased)+3 (upstream) 100% 75% Yes Abs2 Scope 1 100% 100% Yes UBS's first climate change strategy was developed in So far, the strategy has been updated twice, in 2012 and In 2012, our reduction target was updated with the guidance of Sir David King and his team from the Smith School of Enterprise and the Environment at Oxford University. Sir David King was the Chief Scientific Adviser to H.M. Government under both Tony Blair and Gordon Brown and Head of the Government Office for Science. Replacement of all fossil-fuel heating systems in owned real estate at end of life. CC3.1b Please provide details of your intensity target

15 ID Scope % of emissions in scope % reduction from base year Metric Base year Normalized base year emissions covered by target Target year Is this a sciencebased target? Comment CC3.1c Please also indicate what change in absolute emissions this intensity target reflects ID Direction of change anticipated in absolute Scope 1+2 emissions at target completion? % change anticipated in absolute Scope 1+2 emissions Direction of change anticipated in absolute Scope 3 emissions at target completion? % change anticipated in absolute Scope 3 emissions Comment CC3.1d Please provide details of your renewable energy consumption and/or production target ID Energy types covered by target Base year Base year energy for energy type covered (MWh) % renewable energy in base year Target year % renewable energy in target year Comment RE1 Electricity consumption % %

16 CC3.1e For all of your targets, please provide details on the progress made in the reporting year ID % complete (time) % complete (emissions or renewable energy) Comment Abs1 75% 71% RE1 75% 53% Abs2 31% 68% CC3.1f Please explain (i) why you do not have a target; and (ii) forecast how your emissions will change over the next five years CC3.2 Do you classify any of your existing goods and/or services as low carbon products or do they enable a third party to avoid GHG emissions? No CC3.2a Please provide details of your products and/or services that you classify as low carbon products or that enable a third party to avoid GHG emissions

17 Level of aggregation Description of product/group of products Are you reporting low carbon product/s or avoided emissions? Taxonomy, project or methodology used to classify product/s as low carbon or to calculate avoided emissions % revenue from low carbon product/s in the reporting year % R&D in low carbon product/s in the reporting year Comment CC3.3 Did you have emissions reduction initiatives that were active within the reporting year (this can include those in the planning and/or implementation phases) Yes CC3.3a Please identify the total number of projects at each stage of development, and for those in the implementation stages, the estimated CO2e savings Stage of development Number of projects Total estimated annual CO2e savings in metric tonnes CO2e (only for rows marked *) Under investigation 5 17 To be implemented* 3 46 Implementation commenced* Implemented* Not to be implemented 0 0 CC3.3b

18 For those initiatives implemented in the reporting year, please provide details in the table below Activity type Description of activity Estimated annual CO2e savings (metric tonnes CO2e) Scope Voluntary/ Mandatory Annual monetary savings (unit currency - as specified in CC0.4) Investment required (unit currency - as specified in CC0.4) Payback period Estimated lifetime of the initiative Comment Energy efficiency: Building services Summary of 14 measures in buildings accross global real estate portfolio: Change lights to LED; reduction of scope 2 emissions, voluntary measures 920 Scope 2 (locationbased) Scope 2 (marketbased) Voluntary years years Energy efficiency: Building fabric Energy efficiency: Processes Summary of 4 measures in buildings across the global building portfolio: smaller refurbishments (facade, roof, glazing) Replacement of UPS Systems in Datacenter in London (UK) Scope 1 Scope 2 (locationbased) Voluntary Voluntary years 4-10 years years years Energy efficiency: Processes Installation in Datacenter in Connecticut (US): Data Hall Static Pressure Control Systems 506 Scope 2 (locationbased) Scope 2 (marketbased) Voluntary years 6-10 years Low carbon energy purchase Switch to 100% renewable electricity product in Luxembourg (annual consumption: 5200 MWh) - backed by Guarantee of Origin 1200 Scope 2 (marketbased) Voluntary >25 years <1 year

19 Activity type Description of activity Estimated annual CO2e savings (metric tonnes CO2e) Scope Voluntary/ Mandatory Annual monetary savings (unit currency - as specified in CC0.4) Investment required (unit currency - as specified in CC0.4) Payback period Estimated lifetime of the initiative Comment (50% Wind, 50% Hydro) CC3.3c What methods do you use to drive investment in emissions reduction activities? Method Comment Compliance with regulatory requirements/standards Dedicated budget for energy efficiency Dedicated budget for other emissions reduction activities Employee engagement Financial optimization calculations Lower return on investment The Zurich Energy Model is a capacity building project established in 1987 by twelve major energy consumers - among them UBS - in the city of Zurich. The objective of the firms involved in the Zurich Energy Model is a joint increase in energy efficiency, to optimize investments and corporate costs, and to communicate innovative solutions to the general public. In 2013, the group agreed with canton Zurich to set a revised target of increasing energy efficiency by 40% until 2020 based on 2000 (old target 16.5% between 2000 and 2012). In 2007, UBS was awarded the Zurich Energy Model trophy for its achievements and successes in the field of energy efficiency and energy management. As part of the climate change strategy, a dedicated budget for energy efficiency measures has been established. As part of the climate change strategy, a dedicated budget for other emission reductions (such as offsetting) has been established. By providing incentives, education and awareness on environmental matters to its employees and suppliers, we encourage people to make the right choices and promote sustainable behavior both at work and in their domestic situations. In 2015 UBS provided training and awareness raising to some 2000 employees. Financial optimization calculations are a standard method to identify and assess projects to reduce energy consumtion and as a result reduce carbon emissions. UBS has adopted a technical standard supporting worldwide oversight of measures taken to improve energy efficiency in

20 Method Comment (ROI) specification fields such as building operation, replacement investments and rehabilitations. The standard sets energy efficiency target values, for example for heating boilers, chillers and heat pump systems as well as for glazing, facades and lighting. It also includes a specification to assess projects according to their live-cycle costs. CC3.3d If you do not have any emissions reduction initiatives, please explain why not Further Information Comment for question CC3.2: We do believe that some of our products and services are low carbon products or enable a third party to avoid GHG emissions. However, requested data (e.g. % of revenue, % of R&D and taxonomy) is not readily available. Below is a list of some of our sustainable products and services that support the reduction of GHG emissions: (i) UBS Clean Energy Infrastructure Switzerland offers institutional investors unprecedented access to a diversified portfolio of Swiss infrastructure facilities and companies in the field of renewable energies and energy efficiency. Capital commitments reached approximately CHF 400 million as of December 31, Overall, such climate change-related investments account for approximately 5.75% of our sustainable investments (at end of 2015). (ii) We supported Swiss small and medium-sized enterprises (SME) in saving energy, as promoted by the Swiss Energy Agency s SME Model. Clients benefited from the agency's energy check-up for SME at a discount, and were granted cash premiums for committing to an energy reduction plan within this scheme. Until the end of 2014, the Swiss Energy Agency recorded double the target for UBS SME in their overall energy savings which is equivalent to the energy consumption of approximately 400 single-family homes. UBS clients saved more than 1,800 t/co2 per annum by the end of (iii) In 2015, we launched UBS environmental bonus that support corporate clients when upgrading to more environmentally friendly commercial vehicles. (iv) Swiss private clients benefited from the UBS eco mortgage when building energy-efficient homes. In support of our commitment as a financing partner to the energy transition in Switzerland, we have been a Premium Partner of the Swiss Energy and Climate Summit since (v) In 2015, the Investment Bank supported clients that provide a positive contribution to climate change mitigation and adaptation, either in equity and debt capital market transactions (total deal value CHF 10 billion) or as advisor (total deal value CHF 35 billion). Page: CC4. Communication CC4.1 Have you published information about your organization s response to climate change and GHG emissions performance for this reporting year in places other than in your CDP response? If so, please attach the publication(s)

21 Publication Status Page/Section reference Attach the document Comment In mainstream reports (including an integrated report) but have not used the CDSB Framework In voluntary communications In voluntary communications In voluntary communications Complete Complete Complete Complete UBS and Society p. 325; emissions performance p. 328 Entire document attached, section 'Our climate change commitment' from the UBS and Society webpage Info Center 'Environment and human rights, In-house environmental management - statistics' section p.5 Entire document attached, section '4.3 Environment and human rights' Change 2016/Shared Documents/Attachments/CC4.1/UBS Group and UBS AG 2015 Annual Report.pdf Change 2016/Shared Documents/Attachments/CC4.1/UBS Climate change commitment.pdf Change 2016/Shared Documents/Attachments/CC4.1/UBS Info center - Environment and human rights.pdf Change 2016/Shared Documents/Attachments/CC4.1/UBS UNGC COP 2015.pdf Further Information Module: Risks and Opportunities Page: CC5. Climate Change Risks CC5.1 Have you identified any inherent climate change risks that have the potential to generate a substantive change in your business operations, revenue or expenditure? Tick all that apply Risks driven by changes in regulation Risks driven by changes in physical climate parameters Risks driven by changes in other climate-related developments

22 CC5.1a Please describe your inherent risks that are driven by changes in regulation Risk driver Description Potential impact Timeframe Direct/ Indirect Likelihood Magnitude of impact Estimated implications method Cost of management Fuel/energy taxes and regulations Various regulatory drivers targeting energy efficiency or reducing CO2 emissions affect us directly. Such regulation may include, fuel or energy taxes and regulation, mandatory carbon tax schemes and regulation of buildings in terms of energy efficiency, affecting our costs for energy incurred by our buildings (i.e. heating, cooling, lighting, IT, etc). Energy consumption for our buildings is the largest contributor to our CO2 emissions which we reduced by 53.1% between 2004 and 2015, an early overachievement of our original target of a 50% reduction by Since 2012, we Increased operational cost 3 to 6 years Direct Virtually certain Low (Increasing) Taxes applied to energy use and CO2 emissions from commercial buildings may present (increasing) operational costs. For example, under the Carbon Reduction Commitment (CRC) scheme in the UK, UBS bought carbon certificates for emitting 33,580 tonnes in the reporting year 2014/2015 which mounted to paying approx. CHF 770k (GBP 550k 16 /CHF 23 per tonne in 2015). All CO2 emissions UBS seizes the opportunity to save energy by energy efficiency initiatives. UBS ISO certified EMS prioritizes energy efficiency. (1) Building control: steering groups sanction changes in building operations, incl. operational run times for central building plant & equipment/ data center Zero marginal cost for existing building infrastructure control. Costs are related to investments in energy efficiency measures and potentially higher costs for new (sustainable) buildings and equipment. In 2015, UBS purchased property and equipment for a total of CHF 382m (own used properties, leasehold improvements, IT hardware and

23 Risk driver Description Potential impact Timeframe Direct/ Indirect Likelihood Magnitude of impact Estimated implications method Cost of management reduced our energy consumption by 13.7%, overachieving our target of a 10% reduction by As UBS operates (and occupies buildings) in many countries, regulation directly affects our operational costs. (and initiated reduction efforts in the UK) directly affect these costs. facilities. (2) Improvements in building design/ investment in infrastructure: we seek opportunities to invest in infrastructure with the purpose of reducing operating cost. (3) UBS applies a Responsible Supply Chain (RSCM) framework: incl. environmental criteria for the procurement of goods and services. UBS sourcing and procurement is done by Chain IQ, which performs supplier due diligence and establishes communication) including energy efficiency investments.

24 Risk driver Description Potential impact Timeframe Direct/ Indirect Likelihood Magnitude of impact Estimated implications method Cost of management Air pollution limits Air pollution regulations limits contribute to climate change (CC) mitigation by limiting Increased capital cost Unknown Indirect (Client) Virtually certain Unknown The implications of not taking into account remediation measures, supported by experts within UBS. In 2015, remediation measures were requested for 44% of suppliers of newlysourced goods or services with potentially high impacts to improve their adherence to UBS RSCM standards. Evaluation of energy efficiency and carbon emissions are included in the RSCM background checks. To better understand the risks that our clients' No additional costs of management but done within

25 Risk driver Description Potential impact Timeframe Direct/ Indirect Likelihood Magnitude of impact Estimated implications method Cost of management GHG emissions, in particular CO2. Notable regional examples are the EU, having committed to a 20% reduction of CO2 emissions by 2020 on 1990-levels and as a forerunner, the UK has committed to a 80% reduction by 2050 on 1990 levels. As a global services firm active in wealth management (WM), asset management (AM) and investment banking (IB), UBS can be affected indirectly by such limits as they may impact business operations of our clients. E.g., air pollution limits could present a risk for UBS clients in GHG intensive industries, e.g. utilities/energy generation, or basic materials. During 2015, in the run up to COP21, we noted that discussions around fossil fuel reserves and carbon intensive infrastructure attracted regulatory risks in our investment or lending decisions involves reduced performance of our investments and inefficient allocation of our clients' assets which could ultimately lead to reduced demand for our services. No direct costs are associated with reduced demand for products/services. Measurement frameworks for carbon risk are currently under development in the industry. and our own assets are exposed to in the context of uncertain policy and technology developments addressing climate change, UBS has worked on internal solutions as well as on industry-wide projects. During 2015 we contributed to the development of the Carbon Asset Risk Framework led by the UN Environment Programme Finance Initiative, and the World Resources Institute, and the Natural Capital Declaration s standard processes. Hence employees are the main cost driver for UBS to manage risks resulting from climate change regulation (e.g. UBS employed 90.5 full-time specialists by the end of The 2015 indicators cover the "UBS and Society" scope, which is not comparable with previous years scope.

26 Risk driver Description Potential impact Timeframe Direct/ Indirect Likelihood Magnitude of impact Estimated implications method Cost of management a significant amount of attention suggesting that fossil fuel reserves and other assets in the fossil fuel value chain of listed companies could become unburnable thus turning into stranded assets (with significant consequences), in the event of stringent regulation. Last year, we noted that Carbon Tracker continued to attract a significant amount of attention in suggesting that the fossil fuel reserves of listed companies could become unburnable thus turning into stranded assets (with significant consequences), in the event of stringent regulation. There is also increasing investor awareness about the topic as demonstrated bv the growing number of members of initiatives such as "The Montreal Pledge" and the "Portfolio Decarboniztion Corporate Bonds Water Credit Risk Tool and Report. We are also striving to consolidate research, investing and financing activities around climate change. (a) Regarding our clients' investments, UBS sees climate change as an issue that is almost mainstream in the sense that it may affect industry s through revenue effects, cost and capex effects or capital allocation effects. UBS