Morgan Stanley Chairman and CEO James Gorman announced the establishment of the Morgan Stanley Institute for Sustainable Investing. The Institute will build on Morgan Stanley’s ongoing work to advance market-based solutions to economic, social and environmental challenges, operating from the foundational principle that sustainable investment can only achieve significant scale by attracting a broad range of private sector capital. Through product innovation, thought leadership and scholarship aimed at expanding opportunities for sustainable investing, the Institute will seek to drive capital toward investments promoting sustainable economic growth.
The Institute for Sustainable Investing will pursue three focus areas: financial products and solutions that enable clients to invest in sustainability-focused strategies seeking risk-adjusted financial returns; groundbreaking thought leadership that will help mobilize capital toward sustainable investing opportunities; and strategic partnerships with the public, private and nonprofit sectors designed to build capacity and best practices within the field of scalable sustainable investing.
The Institute’s first major commitments include:
- Setting a goal of $10 billion in total 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, this platform will meet rapidly increasing client demand for opportunities to invest for positive environmental and social impact in addition to the goal of achieving risk-adjusted financial returns.
- Creating new products − in coordination with Morgan Stanley Investment Management’s Long-Only and Alternative Investment Partners businesses − in which positive social and/or environmental impact is a core part of the underlying investment strategy.
- Establishing an annual Sustainable Investing Fellowship program at Columbia Business School that will enable a select group of graduate students to pursue thought leadership in sustainable investing, coupled with an internship at Morgan Stanley to gain hands-on experience in product innovation, thought leadership and investment strategy.
- Investing $1 billion in a sustainable communities initiative to provide rapid access to capital for the preservation and enhancement of quality affordable housing units that are at risk of deteriorating into uninhabitable conditions or becoming unaffordable to low- and moderate-income households. The initiative will also seek to drive the integration of affordable housing with access to health care, healthy foods and other vital services. Morgan Stanley is partnering with leading community groups, including the Local Initiatives Support Corporation (LISC) and NCB Capital Impact, on the sustainable communities initiative. “This program takes our long partnership with Morgan Stanley to a new level,” said Michael Rubinger, LISC President and 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.” Terry Simonette, President and CEO of NCB Capital Impact, said, “The sustainable communities initiative is the type of transformative investment that will help ensure the financing so desperately needed to provide access to healthy foods and other critical resources in our poorest communities. We are proud to partner with Morgan Stanley on this effort.”
Through these and future initiatives, the Institute for Sustainable Investing will further Morgan Stanley’s commitment to providing individual and institutional investors with products and strategies that address sustainability challenges at scale.
Morgan Stanley Chairman and CEO James Gorman launched the Institute in a speech at Columbia Business School today. Mr. Gorman said: “Morgan Stanley is in a unique position to harness the capital markets to help address the most pressing challenges facing society today, connecting governments, investors and businesses with the capital to execute at scale. 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.”
Mr. Gorman will chair the Institute’s Advisory Board, which will include individuals from the private and nonprofit sectors with expertise in various aspects of sustainable investing including finance, policy and management (for a list of members, see the note to editors below).
Audrey Choi, who leads Morgan Stanley’s Global Sustainable Finance group, will be CEO of the Institute for Sustainable Investing. “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,” said Ms. Choi. “The Morgan Stanley Institute for Sustainable Investing is 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.”