By Lauren DeMates-
November 1st, 2013 a massive player in the investment world, Morgan Stanley, put out a press release outlining the creation of the Institute for Sustainable Investing to further goals of addressing social and environmental issues through finance. Most important details of the Institute include:
- Goal of $10B in total client assets through Morgan Stanley’s Investing with Impact Platform in the next 5 years. Platform launched last year.
- Creation of new products that seek positive environmental and social benefits in coordination with other arms of the firm
- Investment of $1B in a sustainable communities initiative to provide rapid access to capital for low- and-moderate-income households to address need for affordable housing, healthcare, and healthy food. Firm is partnering with Local Initiatives Support Corporation (LISC) and NCB Capital Impact for this initiative.
President and CEO, James Gorman, recognizes the unique position that Morgan Stanley is in to further sustainable investing and the increasing attention from investors.
“Our philosophy is clear — the most effective solutions to sustainability challenges are those that can be brought to 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.”
The development of the Institute for Sustainable Investing is a huge step. Some may be skeptical of these efforts, but as we recognized in our post titled SMEs and Energy Efficiency Projects Illustrate Limits of Traditional Financing Models, there is great potential in exploring and developing new ways to invest to address the social and environmental challenges we face. Through resource availability, market share, and overall influence in the industry Morgan Stanley can integrate sustainable investing into the mainstream and provide the option to invest in this manner to a large number of investors. Although we need to keep an eye on the continued development of metrics to gauge social and environmental impact, this and any effort to further sustainable investing is positive.