Morgan Stanley has decided to get into sustainable investments in a big way, announcing the Morgan Stanley Institute for Sustainable Investing.
The goal is to advance market-based solutions to economic, social and environmental challenges by bringing sustainable investments to significant scale.
“Our clients are increasingly turning their attention to what it takes to secure the lasting and safe supplies of food, energy, water and shelter necessary for sustainable prosperity,” says James Gorman, CEO of Morgan Stanley.
“As the world’s population grows toward 9 billion and beyond, meeting the exponentially growing needs for quality education, healthcare, housing and security will far outstrip current models of business, government or philanthropy. We are committed to playing a catalytic role in forging innovative cross-sector partnerships that develop solutions to mobilize capital efficiently and effectively to meet these challenges at scale,” says Audrey Choi, who heads Morgan Stanley’s Global Sustainable Finance group and will serve as CEO of the Institute for Sustainable Investing.
There are three areas of focus: financial products that make it possible for clients to invest in sustainability-focused strategies while getting strong risk-adjusted financial returns; thought leadership that helps mobilize significant capital; and strategic partnerships that build capacity and best practices in scalable sustainable investing.
The Institute’s first major commitments are:
- A goal of $10 billion in client assets through Morgan Stanley’s Investing with Impact Platform in the next five years.
By developing new products, innovative thematic portfolios and sustainable investing thought leadership, they hope to meet the rapidly rising demand for opportunities to invest for positive environmental and social impact in addition to financial returns.
- An annual Sustainable Investing Fellowship at Columbia Business School coupled with a hands-on internship at Morgan Stanley will develop thought leadership and investment strategy for the effort.
- A $1 billion investment in a sustainable communities initiative that provides rapid access to capital to preserve and enhance quality affordable housing that’s either deteriorating into uninhabitable conditions or becoming unaffordable to low- and moderate-income households.
The goal is to integrate affordable housing with access to health care, healthy foods and other vital services through partnerships with leaders such as the Local Initiatives Support Corporation (LISC) and NCB Capital Impact.
“This program takes our long partnership with Morgan Stanley to a new level,” says Michael Rubinger, LISC CEO. “It doesn’t just finance buildings; it fuels opportunity and focuses on quality of life. Together, we will be able to help low-income families live better and make their communities stronger and healthier.”