Sustainable Investing Goes Mainstream: Morgan Stanley and Bloomberg Survey Finds Sustainable Investing a Business Imperative Among U.S. Asset Managers

  • New survey shows that 75% of U.S. asset managers say their firms now
    offer sustainable investing strategies, up from 65% in 2016.
  • Most asset managers are embracing sustainable investing as a business
    building approach and believe that financial returns and impact
    outcomes can go hand in hand.
  • Expertise, better data and impact reporting identified as factors to
    support customization and drive future success in the space.

NEW YORK–(BUSINESS WIRE)–A majority of U.S. asset managers are now practicing sustainable
investing, viewing it as a strategic business imperative. In a new
survey entitled Sustainable Signals: Growth and Opportunity in Asset
Management
, from the Morgan Stanley Institute for Sustainable
Investing and Bloomberg, 75% of respondents reported that their firms
have adopted sustainable investing, up from 65% in 2016.

“The survey results demonstrate that sustainable investment strategies
are now a strategic imperative,” said Matthew Slovik, Head of Global
Sustainable Finance at Morgan Stanley. “It is clear that asset managers
will continue to invest new resources and expand their product
portfolios in the coming years.”

Respondents cited several key drivers of success in sustainable
investing, including increased investment stability, high client
satisfaction, product popularity and possible high financial returns.
Despite the recognition of the strategy as a business imperative, almost
all asset managers highlighted the need for increased expertise, better
data and impact reporting to drive future success in the space.

“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,” noted Curtis Ravenel, Global
Head of Sustainable Business & Finance at Bloomberg. “This will increase
credibility and improve measurement of impact across portfolios.”

The survey polled 300 respondents at U.S. asset management firms with at
least $50 million in client assets. The survey gathered insights about
the growth, direction and future outlook of sustainable investing among
asset managers, which builds on a previous Morgan Stanley and Bloomberg
survey and interview series first conducted in 2016 titled, Sustainable
Signals: The Asset Manager Perspective
.

Results from the 2018 survey identify sustainable investing as a
mainstream strategy that will continue to grow as an investing strategy
in years to come. Key findings include:

Sustainable Investing Goes Mainstream

  • Three in four U.S. asset managers say their firms now offer
    sustainable investing strategies, up from 65% in 2016.
  • Asset managers overwhelmingly agree that sustainable investing is no
    longer a fad, with nine in 10 (89%) saying it is here to stay and 63%
    expecting it to continue to grow in the next five years.

A Financial Case for Sustainable Investing

  • As sustainable investing matures, asset managers are putting financial
    considerations at the forefront of their sustainable investment
    strategies.
  • 82% think strong ESG practices can lead to higher profitability and
    that companies with such practices may be better long-term investments.
  • Almost two thirds of asset managers (62%) believe that it’s possible
    to maximize financial returns while investing sustainably.

Product Types Proliferate, Expanding Investor Choice

  • As more firms embrace sustainable investing strategies, they are
    offering more ESG-tailored investment vehicles and expanding investor
    choice.
  • Many employ a full spectrum of sustainable investing approaches, with
    63% employing more than one strategy across shareholder engagement,
    restriction screening, ESG integration, thematic investing and impact
    investing.

Expertise, Better Data and Impact Reporting Will Support
Customization and Drive Future Success

  • Nearly all (89%) respondents report their firms will devote more
    resources to sustainable investing in the next two years. Common
    strategies for developing in-house skills and capacity include
    employee training (41%), dedicating more employee time (36%) and
    specialist hires (34%).
  • Seven in 10 asset managers agree that the industry lacks standard
    metrics to measure nonfinancial performance of sustainable
    investments. The field is wide open for better data and the
    development of impact measurement tools.

For more information, please see https://www.morganstanley.com/ideas/sustainable-investing-asset-managers.

About The Morgan Stanley Institute for Sustainable Investing

The Morgan Stanley Institute for Sustainable Investing builds scalable
finance solutions that seek to deliver competitive financial returns
while driving positive environmental and social impact. The Institute
creates innovative financial products, thoughtful insights and capacity
building programs that help maximize capital to create a more
sustainable future. For more information about the Morgan Stanley
Institute for Sustainable Investing, visit www.morganstanley.com/sustainableinvesting.

About Morgan Stanley

Morgan Stanley (NYSE: MS) is a leading global financial services firm
providing investment banking, securities, wealth management and
investment management services. With offices in more than 41 countries,
the Firm’s employees serve clients worldwide including corporations,
governments, institutions and individuals. For more information about
Morgan Stanley, please visit www.morganstanley.com.

About Bloomberg

Bloomberg, the global business and financial information and news
leader, gives influential decision makers a critical edge by connecting
them to a dynamic network of information, people and ideas. The
company’s strength – delivering data, news and analytics through
innovative technology, quickly and accurately – is at the core of the
Bloomberg Terminal. Bloomberg’s enterprise solutions build on the
company’s core strength: leveraging technology to allow customers to
access, integrate, distribute and manage data and information across
organizations more efficiently and effectively. For more information,
visit www.bloomberg.com/company
or request
a demo
.

Acknowledgements

The Morgan Stanley Institute for Sustainable Investing and Bloomberg
would like to thank the Initiative for Responsible Investment at the
Hauser Institute for Civil Society at the Harvard Kennedy School and
Edelman Intelligence for their contributions to this work.

Disclosures

This material was published on February 21, 2019 and 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
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