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Sustainability principles for managing financial investments

LUKB also applies sustainability principles when managing financial assets. Besides liquidity, profitability and security objectives, the investment process considers ecological and social aspects as well as environmental, social and governance (ESG) criteria. This is based on the internal sustainability ratings of LUKB's financial analysis, which takes account of the ESG rating, exclusion criteria, business conduct, climate and effect factors for individual securities. The sustainability criteria of the LUKB financial analysis also apply to collective financial investments. Further information on how that is done can be found in the ‘Investment business’ section.

Investments in individual securities or collective investments with an unsatisfactory sustainability rating must be justified internally by the CFO (reported to the Risk Function and the Sustainability Office) and reported regularly to the Executive Board. In addition, such investments are strictly limited under the risk policy.

Issue of sustainability-related bonds in the capital market sector

In 2025, LUKB supported joint lead mandates for the issue of green bonds totalling 395 million Swiss francs:

• 0.74 % Crédit Agricole next bank (Suisse) S.A., tenor until 24 January 2028, volume 100 million Swiss francs (ISIN CH1383924722)
• 1.35 % Mobimo Holding AG, tenor until 28 March 2031, volume 120 million Swiss francs (ISIN CH1405472056)
• 1.10 % Mobimo Holding AG, tenor until 27 August 2032, volume 175 million Swiss francs (ISIN CH1471403787)

In the previous year, LUKB participated in issuing five green bonds in the amount of 817 million Swiss francs and one sustainable bond in the amount of 145 million Swiss francs. The year-on-year decline is attributable to the drop in the general issuing of green and sustainable bonds on the Swiss capital market in 2025.

Procurement and waste disposal

LUKB aims for lasting improvements in the environment-related aspects of banking operations, such as energy, paper and water consumption, and waste generation. It attaches particular importance to a sustainable procurement and waste disposal policy, the aim being to conserve resources:

• Primary aim: avoid consumption
• Secondary aim: reduce consumption

By observing sustainability requirements when procuring products and services, LUKB aims to directly and indirectly promote environmentally friendly and socially responsible value chains.

The following overarching principles apply to all LUKB procurement processes:

• Cost-effectiveness
• Social compatibility, including respect for human rights
• Environmental compatibility
• Transparency and partnership
• Business integrity and ethics
• Product-specific requirements

The product-specific requirements (i.e. the specific procurement criteria for the relevant product groups) are laid out in the directive on sustainable procurement. A key component of this directive is the Supplier Code¹⁾. Further information can be found in the ‘Relations with suppliers and partners’ section.

Consumption of supplies

LUKB focuses primarily on providing banking services and products to its clients. Procurement of physical goods is therefore of minor importance. LUKB's regular purchases are primarily paper and office supplies. After energy consumption, LUKB's use of paper is of second-greatest relevance environmentally. LUKB aims to help employees and clients to steadily reduce the consumption of paper. It also makes an effort to use ‘clean’ paper (chlorine-free with the FSC label) as often as possible and to keep printing carbon-neutral.

At the start of 2021, LUKB set itself the goal of reducing paper consumption to 50 tonnes by 2025 and reducing keeping envelope use to 2 million.

The paper consumption target of 50 metric tons was reached in the 2024 financial year. In 2025, however, consumption – measured in terms of the volume of paper purchased – was above the target, as the inventories built up during the COVID pandemic had been depleted by 2024 and additional amounts had to be purchased during the reporting year.

The target of keeping envelope consumption to 2 million units was nevertheless reached. LUKB was able to further reduce its consumption significantly in the past financial year, supported by the decision to no longer send annual reports by post.

Despite a marked increase in business volume, LUKB now uses 66 % less paper and 64 % fewer envelopes than in 2010.

LUKB will set new targets for paper and envelope consumption in the course of the 2026 financial year.

Total consumption, including paper and envelopes for publications, is shown in the table below. The decision to stop printing annual reports as of 2025 has significantly reduced paper consumption (under ‘Other consumption‘).

The proportion of recycled paper used is 74 % for paper and 87 % for envelopes.

Waste

Digitalisation has enabled LUKB to significantly reduce its volume of waste, particularly since 2018. Waste paper consists mainly of newspapers, printed material that is no longer required, and internal printer paper. The highest security standards apply during waste disposal. LUKB aims to recycle a large proportion of its waste (e.g. paper, cardboard, PET, electronic waste) and keep the volume of waste low. Since 2010, the volume of waste per employee has decreased by 51 % or 107 kilograms. The target of 100 kg of waste per employee by 2025 set at the start of 2021 could not be fully met.

In the course of the 2026 financial year, LUKB will analyse the trend in waste generation, introduce further measures as needed and set new targets for waste generation for the coming years.

Water

LUKB uses water primarily for sanitary facilities, cleaning and irrigating plants and lawns. Water is also required for heat pumps. Some locations use energy from lakes for heating and cooling. This takes place in a closed loop, and heat and cold extraction takes place by means of heat exchangers. LUKB obtains the water from the municipality in which the building is located. Its operational effluents are discharged to the wastewater treatment plants (WTPs) via the municipal drainage system. Apart from the water used in the buildings, LUKB does not discharge any other effluents.

Water consumption per full-time equivalent remained virtually unchanged compared to the previous year.

Energy

Details on the purchase and consumption of energy can be found in the ‘Greenhouse gas emissions and climate protection’ section.

Transparency on minerals and metals from conflict-affected areas and child labour

Under Article 964j para. 1 CO, companies whose head office or principal place of business is in Switzerland must comply with and report on their due diligence obligations in their supply chains if they:

1. Process or place in free circulation in Switzerland minerals containing tin, tantalum, tungsten or gold or metals from conflict-affected and high-risk areas; or

2. Offer products or services that can reasonably be suspected to have been made or procured using child labour.

Minerals and metals from conflict-affected areas (Art. 964j para. 1 no. 1 CO)

The corresponding requirements under the CO do not apply to LUKB because it does not import or process minerals or metals from conflict-affected or high-risk areas. LUKB purchases precious metals such as gold and silver exclusively from domestic, FINMA-regulated financial institutions which themselves comply with the regulatory requirements. For more information, please refer to ‘Responsible and traceable gold’ in the ‘Investment business’ section.

Child labour (Art. 964j para. 1 no. 2 CO)

The Swiss Code of Obligations requires companies to assess, as part of the procurement process, whether child labour might have played a part in supply chains. LUKB has defined procurement criteria for more sustainable products, in particular for promotional items and client gifts, which its local suppliers must comply with. When selecting products, LUKB usually chooses a manufacturer from Switzerland, the EU or the EEA. This enables it to theoretically reduce the risk of a breach of the ban on child labour in a product's supply chain. For all items produced in a country on the list of the Bureau of International Labor Affairs (United States Department of Labor), LUKB confirms annually during purchasing that such items were not made using child labour. The most recent review for 2025 revealed that no such items were purchased.

For more information on working with suppliers and partners, see the ‘Relations with suppliers and partners’ section.