Morgan Stanley Research Important Takeaway: Sustainable Investing Approaches Now Clearly Mainstream For Institutional and Retail Asset Owners

A 2018 survey by Morgan Stanley took the pulse of U.S. asset managers (with in-depth telephone interviews) to determine the level of adoption of sustainable investing approaches by asset managers in the United States. 

Results:  in the report “Sustainable Signals: Growth and Opportunity in Asset Management” a majority of managers said they now see sustainable investing strategies as a strategic imperative, explains Matthew Slovik, head of Global Sustainable Finance at Morgan Stanley.

Morgan Stanley Institute for Sustainable Investing and Bloomberg had 300 asset management firms with at least US$50 million in Assets Under Management polled and the results built on a prior Morgan Stanley and Bloomberg survey in 2016 (“Sustainable Signals: The Asset Manager Perspective”). In that year’s pulse-taking, 65% of survey respondents said their firms adopted sustainable investing; the 2018 response was that 75% of asset management firms surveyed had done so.

Reasons cited:  increased investment stability; high client satisfaction; product popularity; possible high finance returns.

Explains Bloomberg Global Head of Sustainable Business & Finance, Curtis Ravenel:  “As investors increasingly consider sustainability factors across asset classes and investment products, we expect to see a shift toward better data tracking and reporting mechanisms…this will increase credibility and improve measurements of impact across portfolios.”

Survey Highlights:  Three-in-four U.S. asset managers now offer sustainable investing strategies. Nine-in-ten say sustainable investing is not a fad, it’s here to stay. Eight-in-ten say strong ESG practices can lead to higher profitability and companies [with ESG practices] may be better long-term investments. Two-out-of-three asset managers believe that it is possible to maximize financial return while investing sustainability.

Consider that according to the most recent survey of U.S. asset owners and managers by the U.S. Forum for Sustainable & Responsible Investing (US SIF), $13 trillion (or one-in-four dollars) of professionally-managed assets now consider sustainability principles, a clear signal that ESG factors are now widely incorporated into investment processes.

The new Morgan Stanley / Bloomberg survey results make the financial case for sustainable investing with both institutional and retail investors demanding an increasingly sophisticated range of investment approaches and impact outcomes.

The Initiative for Responsible Investment at the Hauser Institute for Civil Society at the Harvard Kennedy School and Edelman Intelligence contributed to the work.

The Top Story this week has highlights of the survey; click here to access the 16-page report.

The US SIF’s comprehensive “Report on U.S. Sustainable, Responsible and Impact Investing Trends 2018” is also available. 

This is just the introduction of G&A's Sustainability Highlights newsletter this week. Click here to view full issue.