Despite political pushback in US, Wall Street bank report highlights strong support
For some, talk of ESG, climate change mitigation, or sustainable investing has become toxic, but for the global corporate world, the commitment remains strong.
A new report from Morgan Stanley reveals that 88% of respondents from global companies say that sustainability is a route to long-term value creation (55% said it is primarily so) and this has increased over the past year. Just 12% of corporates see sustainability through a risk management lens.
High investment needs and political and economic uncertainty are the biggest challenges cited, although 83% say that they can quantify returns on their sustainability-related investments, including both new projects and risk reduction activities, just as they do for other initiatives.
The importance of a strong sustainability focus is highlighted by the more than half of companies that have experienced an impact on operations from physical climate-related events in the past year, led by extreme heat, weather or storms. This most typically increases costs, disrupts workers, or negatively impacts revenue.
Although most respondents (66%) expect higher incidences of climate related negative impact over the next five years, 80% say they are at least somewhat prepared to increase resilience.
“The data suggest that sustainability remains central to long-term value creation,” said Jessica Alsford, Chief Sustainability Officer and Chair of the Institute for Sustainable Investing at Morgan Stanley. “Companies around the world report an alignment between corporate strategies and sustainability priorities as they seek to build resilient, future-ready businesses.”
Rival Wall Street bank JPMorgan recently said that it would continue to play a key role in climate transition financing, despite the toning down of ESG initiatives by many corporates since the Trump administration re-entered the White House.
However, elsewhere in the world, climate change remains a key focus and lenders cannot ignore it.
“We are an American bank, but especially being a highly regulated industry, we have to assess and evaluate what’s coming at us from all parts of the world,” Taylor Wright, head of operational sustainability at JPMorgan, said in an interview. “We see pressures on both sides.”
