Public and private sectors are coming together with more coordination and innovation than ever before to help mitigate the world’s biggest sustainability problems
SOURCE: Morgan Stanley
DESCRIPTION:
By Audrey Choi
The past two years have been a clear and constant reminder that solving the world’s greatest sustainability challenges—climate change, the pandemic and racial injustice—will require public and private organizations embracing environmental and social responsibilities with greater coordination, commitment and innovation. And increasingly, we are seeing this happen as governments and businesses focus on issues such as climate-change mitigation, community access to public health and equitable socio-economic opportunities.
In 2009, we formed our Global Sustainable Finance Group to work across our core businesses and integrate sustainability into everything we do at the firm because we believed that there was a real business case to be made for sustainable investing. At the time, climate change was thought of by many as solely an environmental issue, but today it is beginning to be understood as far more wide-ranging and as something critical to business continuity and risk management. Our approach has allowed us to work hand in hand with our business partners on product innovation, operational sustainability, leading Morgan Stanley’s global sustainability reporting activities and integrating climate change and ESG (environmental, social and governance) considerations across the firm, and why in 2013, we took the step of launching the Morgan Stanley Institute for Sustainable Investing.
The Institute has been a leading force in mobilizing capital to sustainable enterprises via the global markets and the investors who drive them and has been key to disproving the tired myth that investing and having a positive impact requires a tradeoff. Over the past decade, there has also been a fundamental change in how investors and corporate leaders regard climate change. Today, sustainable investing accounts for more than $35 trillion in assets under management (AUM) globally1 and is on track to exceed $53 trillion in global AUM by 2025. This represents more than a third of the projected total assets under management globally.
The need to take a cross-sector approach to our greatest sustainability challenges is also why in 2020, we launched the Morgan Stanley Sustainable Solutions Collaborative to help scale early-stage sustainability initiatives that can benefit from partnerships across private and public industries. This year, we announced our first class of five winning teams—a diverse group of innovators who are tackling problems across the world, including e-commerce applications to the drug supply chain in Africa to improve health accessibility, refill stations and mobile delivery to reduce plastic waste in Indonesia and a systematic approach for U.S. farmers to use soil to capture carbon and help reduce greenhouse gas emissions.
And next week, in our continuing mission to advance thought leadership, the Institute will host our third annual Sustainable Investing Summit. The Summit will gather leading thinkers from across industries and from business, academia and government to share information and insights on sustainable investing. Participants will include CEOs, institutional investors and policymakers such as former Vice President and Nobel Peace Prize recipient Al Gore, Pfizer CEO Dr. Albert Bourla, former Governor of the Bank of England Mark Carney and former U.S. Securities and Exchange Commission Chair Mary Schapiro. The conversations will focus on cross-sector and cross-industry collaboration to help progress the impact that’s needed today and for the future.
As we focus on the transition to a low-carbon future, it is essential that leaders think about sustainability as a critical piece of their fundamental business strategy and recognize that in the future, sustainability will be of central importance across industries and geographies as the case is made that what’s good for society is also beneficial for business. Or, as IKEA CEO Jesper Brodin told me in a recent conversation, “Purpose and profit actually go hand in hand.”
1 http://www.gsi-alliance.org/wp-content/uploads/2021/08/GSIR-20201.pdf
DISCLOSURES
This material was published on October 20, 2021 has been prepared for informational purposes only, and is not a solicitation of any offer to buy or sell any security or other financial instrument, or to participate in any trading strategy. This material does not provide individually tailored investment advice. It has been prepared without regard to the individual financial circumstances and objectives of persons who receive it. Securities discussed in this material may not be appropriate for all investors. It should not be assumed that the securities transactions or holdings discussed were or will be profitable. Morgan Stanley recommends that investors independently evaluate particular investments and strategies, and encourages investors to seek the advice of a Financial Advisor.
This material contains forward-looking statements and there can be no guarantee that they will come to pass. Past performance is not a guarantee of future results or indicative of future performance.
Information contained in this material is based on data from multiple sources and Morgan Stanley makes no representation as to the accuracy or completeness of data from sources outside of Morgan Stanley.
Morgan Stanley makes every effort to use reliable, comprehensive information, but we make no guarantee that it is accurate or complete. We have no obligation to tell you when opinions or information in this material may change.
Because of their narrow focus, sector investments tend to be more volatile than investments that diversify across many sectors and companies.
The returns on a portfolio consisting primarily of Environmental, Social and Governance (“ESG”) aware investments may be lower or higher than a portfolio that is more diversified or where decisions are based solely on investment considerations. Because ESG criteria exclude some investments, investors may not be able to take advantage of the same opportunities or market trends as investors that do not use such criteria. Diversification does not guarantee a profit or protect against loss in a declining financial market.
The guest speakers at the Sustainable Investing Summit are neither employees nor affiliated with Morgan Stanley & Co. LLC or Morgan Stanley Smith Barney LLC (“Morgan Stanley”). Opinions expressed by the guest speakers are solely their own and do not necessarily reflect those of Morgan Stanley.
Information contained in the material is based on data from multiple sources and Morgan Stanley makes no representation as to the accuracy or completeness of data from sources outside of Morgan Stanley. References to third parties contained herein should not be considered a solicitation on behalf of or an endorsement of those entities by Morgan Stanley. Morgan Stanley is not responsible for the information contained on any third party web site or your use of or inability to use such site, nor do we guarantee its accuracy or completeness. The terms, conditions, and privacy policy of any third party web site may be different from those applicable to your use of any Morgan Stanley web site. The opinions expressed by the author of an article written by a third party are solely his/her own and do not necessarily reflect those of Morgan Stanley. The information and data provided by any third party web site or publication is as of the date of the article when it was written and is subject to change without notice.
© 2021 Morgan Stanley & Co. LLC and Morgan Stanley Smith Barney LLC. Members SIPC. CRC 3863627 10/2021
KEYWORDS: Morgan Stanley, NYSE: MS, Global Sustainable Finance Group, Institute for Sustainable Investing