Morgan Stanley says sustainable investing is mainstream and here to stay
Individual investors are overwhelmingly backing sustainable investing.
A survey published last week by the Morgan Stanley Institute for Sustainable Investing shows that 85% of individual investors expressed an interest in sustainable investing and half take part in at least one sustainable investing activity.
The survey also shows that sustainable investing has grown steadily since 2015 with Millennials almost universally interested (95%) and with a higher-than-average adoption (67%).
Digging deeper into why investors want sustainable investments, 84% say they want to be able to tailor their investments to their impact goals with a similar share wanting to track their impact through regular reports.
More than 8 in 10 investors say they companies can potentially boost their performance through their ESG practices and 88% believe it is possible to balance financial gains with a focus on social and environmental impact.
However, almost two thirds think that investors must choose between financial gains and sustainability.
“These findings reaffirm that sustainable investing has entered the mainstream and is here to stay,” said Audrey Choi, Chief Sustainability Officer and Chief Marketing Officer at Morgan Stanley. “Increasingly, investors want to know what they own and want those holdings to reflect their values.”
The poll discovered that 65% of investors say a lack of sustainable investment products is a barrier to including sustainable investments in their portfolios.
Wealthy families load up on ESG
Meanwhile, super-rich families are also focused on ESG according to the global head of wealth management at Deutsche Bank.
“Family offices are now putting ESG in their investment charters,” Fabrizio Campelli told Bloomberg. “There are some family offices in California that can’t invest less than 40% of their assets in ESG,” he said.
The strong drive for ESG-focused investments is being driven by a generational shift, as millennial heirs inherit family fortunes and decide on a new direction for investments.
Deutsche says it’s responding to increased client demand for an impact-investing strategy by adding ESG ratings to assets and having more funds focused on ESG.
“We’re doing this because clients are asking for it,” said Campelli. “You don’t need to compromise the performance of investments. You’re just helping to add purpose.”
Today’s #Sustainable Investing Conference in London addresses hedge funds’ record interest as “investors ask alternative funds about it; hedge funds believe in it; and stocks may trade at new premiums because of #ESG,” says Head of Global Sustainability Research Jessica Alsford. pic.twitter.com/hqcxiNvvsX— Morgan Stanley (@MorganStanley) September 10, 2019