Swiss Equities: Unveiling Sustainable Momentum in Financial Sector Leaders

The Swiss financial sector in 2025 is navigating a delicate balance between profitability and sustainability, with key players like Partners Group and UBS demonstrating divergent yet complementary approaches to embedding environmental, social, and governance (ESG) principles into their operations. As global investors increasingly prioritize long-term value creation over short-term gains, the question of whether these firms can sustain momentum in both financial performance and ESG alignment becomes critical.

Partners Group: A Model of ESG-Driven Growth

Partners Group, the private wealth manager, has emerged as a standout in 2025, with assets under management (AuM) surging to USD 174 billion-a 17% year-on-year increase, according to Partners Group's 2025 interim results (Partners Group's 2025 interim results). This growth is underpinned by a robust EBITDA margin of 62.7%, reflecting operational efficiency and strong client retention, as noted in the interim results. However, what sets Partners Group apart is its proactive ESG strategy. The firm conducted a double materiality assessment (DMA) in 2023, a rigorous process to evaluate how sustainability factors impact both its financial performance and societal outcomes, according to an Inrate analysis (an Inrate analysis).

Its net-zero targets-corporate operations by 2030 and portfolio companies by 2050-are ambitious, particularly for a firm managing complex private assets. This alignment with global decarbonization goals positions Partners Group to attract ESG-conscious capital, a trend that has gained urgency as institutional investors increasingly tie capital allocation to sustainability metrics, as discussed in the Inrate analysis.

UBS: Resilience Amid Integration Challenges

UBS Group AG, meanwhile, has demonstrated resilience in the wake of its Credit Suisse integration. For the first quarter of 2025, the bank reported a net profit of USD 1.7 billion, with underlying profit before tax (PBT) rising 15% year-over-year, according to EY's Banking Barometer 2025 (EY's Banking Barometer 2025). Its cost-cutting initiatives, which have yielded USD 8.4 billion in cumulative savings as of 1Q25, have bolstered returns on capital, with an underlying return on CET1 capital of 11.3%, as the EY report notes.

However, UBS's ESG trajectory has been more cautious. The bank recently delayed its operational net-zero target from 2025 to 2035, citing the complexities of integrating Credit Suisse's operations and adapting to the Corporate Sustainability Reporting Directive (CSRD), as reported in the Partners Group interim results. Despite this, UBS has maintained progress in key areas: it aims to source 100% of its electricity from renewables by 2026 and has reduced Scope 1 and 2 emissions by 57% from 2023 levels by 2030, according to the interim results. Its Asset Management division, while scaling back a prior net-zero AUM target, now manages USD 64.4 billion in assets with a net-zero ambition-3.6% of total AUM, as the same interim results indicate.

UBS's recalibration underscores the challenges of balancing regulatory compliance with ambitious sustainability goals. Yet, its membership in the Net-Zero Banking Alliance (NZBA) and continued focus on financed emissions decarbonization suggest a long-term commitment to ESG integration, as described in the Partners Group interim report.

Historical backtesting of UBS's earnings announcements from 2022 to 2025 reveals a pattern of underperformance relative to the benchmark, with a cumulative event return of -1.6% by day 30 (see the backtest results: backtest results). This contrasts with Partners Group, which, despite a smaller sample size (five annual results releases), shows a modest positive drift, finishing +1.1% above the starting level after 30 days while the benchmark remains flat; those backtest results highlight the nuanced relationship between earnings communication and market sentiment, particularly for firms navigating complex integration or strategic transitions.

Broader Sector Trends: ESG as a Strategic Imperative

The performance of Partners Group and UBS reflects broader trends in the Swiss financial sector. According to the EY Banking Barometer 2025, 67% of Swiss banks now incorporate ESG criteria into lending decisions, though this figure has slightly declined from previous years, as the EY report indicates. This suggests a maturation of ESG adoption, where initial enthusiasm is giving way to more nuanced, risk-adjusted strategies.

Swiss companies rank 8th in ESG impact performance among OECD nations, excelling in energy and materials sectors but lagging in real estate, according to the Inrate analysis. For financial institutions, this translates to both opportunities and vulnerabilities. The sector's emphasis on cost efficiency-39% of banks prioritizing cost reduction-highlights the need to balance ESG investments with profitability, a point underscored in the EY Barometer.

Regulatory pressures are also intensifying. The European Sustainability Reporting Standards (ESRS) have pushed 89% of Swiss-listed entities to conduct double materiality assessments, while 87% seek third-party assurance for sustainability reports, according to PwC sustainability insights (PwC sustainability insights). These measures, though costly, are fostering transparency-a critical factor for maintaining investor trust in an era of heightened ESG scrutiny, as the PwC insights explain.

Sustainable Momentum: A Path Forward

For Swiss equities to sustain momentum, firms must navigate a dual challenge: delivering financial returns while aligning with evolving ESG expectations. Partners Group's aggressive net-zero targets and UBS's adaptive strategy illustrate two viable paths. The former leverages ESG as a competitive differentiator, while the latter prioritizes operational stability amid integration complexities.

Investors should also consider the sector's broader resilience. Despite 74% of Swiss banks anticipating narrower profit margins over the next two years, 85% expect long-term revenue growth, as noted in the EY Banking Barometer 2025. This optimism is rooted in the sector's ability to innovate-whether through AI-driven risk management or ESG-themed products-to capture emerging market opportunities.

Conclusion

The Swiss financial sector's sustainable momentum hinges on its ability to harmonize profitability with ESG imperatives. Partners Group and UBS, though distinct in approach, exemplify the sector's capacity to adapt. For investors, the key takeaway is clear: firms that treat ESG not as a compliance burden but as a strategic lever-whether through aggressive decarbonization or measured, risk-aware integration-will outperform in the long run. As global markets continue to prioritize sustainability, Swiss equities, and their financial sector in particular, offer a compelling case for those seeking both returns and resilience.