UBS White Paper at Building Bridges

Staying on track

To remain on track with decarbonization, more electrification is required, coupled with a rise in the generating capacity from 27 gigawatts (GW) today to over 60 GW by 2050. This comes at a time when 32% of current generating capacity is set to go offline, with the four remaining nuclear reactors scheduled for shutdown by 2034. Filling the gap requires a major build-out of renewables. This will bring increased challenges of seasonality in demand and supply. Maintaining grid stability will require innovations in demand management and a material increase in energy storage capabilities. Political and societal support must be secured, and competitive electricity prices maintained. Furthermore, attention must be paid to those sectors, which might not achieve full decarbonisation on time. In addition to their abatement efforts, carbon removal technologies need to be scaled, if net-zero is to be reached.

Michael Baldinger, UBS Chief Sustainability Officer, says: “Significant carbon capture and storage capacity, equivalent to around a quarter of current Swiss emissions, will be required for those sectors who cannot eliminate their emissions completely. This is a technological, logistical, and financial challenge, but one that offers Switzerland the opportunity to lead in new green markets.”

Focus on implementation and addressing increasing regulatory demands

The transition holds commercial opportunities for some sectors while others face more challenges and will require deeper reforms, sustained investment, and widespread collaboration to stay on track. Essential in this process is the implementation of the increasing regulatory demands which will define the legislative guardrails of Switzerland’s transition to a net-zero economy. In 2025, three major changes are incoming, such as the Electricity Law, the CO₂ Act, and the Climate and Innovation Act. Furthermore, the Swiss government intends to broadly align with EU regulations in certain key areas, such as reporting, which will tenfold the scope from 300 to 3,500 Swiss companies.

Swiss financial sector well positioned to support

An estimated CHF 13bn per year until 2050, according to the Swiss Banking Association (SBA), will be required to achieve net-zero, which is equivalent to around 2% of annual Swiss GDP. The financial sector offers various capabilities to support the Swiss economy in its transition. This includes providing instruments for funding this capital-intensive undertaking such as bank loans, capital market financing through bond and equity investments, blended finance solutions or public-private partnerships to support the market entrance and scaling of new technologies. The Swiss economy can also be supported in their transition efforts through the financial sector’s capabilities in advisory, connecting investors and companies, engagement and active stewardship.

About UBS
UBS is a leading and truly global wealth manager and the leading universal bank in Switzerland. It also provides diversified asset management solutions and focused investment banking capabilities. With the acquisition of Credit Suisse, UBS manages 6.2 trillion dollars of invested assets as per third quarter 2024. UBS helps clients achieve their financial goals through personalized advice, solutions and products. Headquartered in Zurich, Switzerland, the firm is operating in more than 50 markets around the globe. UBS Group shares are listed on the SIX Swiss Exchange and the New York Stock Exchange (NYSE).

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