After taking a look at Morgan Stanley’s new index for inclusive investment opportunities, we wondered to what extent the bank itself uses such tools. More than you might expect, Audrey Choi, Morgan Stanley’s chief sustainability officer and chief marketing officer, told ImpactAlpha.
“When you say the word inequality and investment in the same sentence, people have hard time reconciling them,” says Choi. But she sees “tremendous growth opportunities” in tech-driven solutions in healthcare or financial services that promote gender equity and access to credit for low-income people.
“Then you get into a virtuous cycle, where the benefit to the community is a benefit to the business,” she says.
Those kind of insights are spreading inside the bank. Morgan Stanley recently raised $125 million for its Integro fund of funds, which among other opportunities is targeting financial inclusion in the Andean region and sustainable food production in Africa.
Morgan Stanley’s equity analysts have downgraded stock ratings on ESG (for environmental, social and governance) factors, such as rising concerns over access to water, which could slow permitting for plant expansion. “The water issue is actually a cap-ex (capital expenditure) consideration,” Choi says.
Morgan Stanley underwrote the first-of-its-kind bond offering by the Local Initiatives Support Corp., which raised $100 million for the community development financial institution, as well as last year’s corporate sustainability bond from Starbucks.
Choi reports that Morgan Stanley’s wealth management division has $6.5 billion in client assets in “sustainable” strategies, putting it on track toward the goal of $10 billion by the end of next year.
To help get there, the bank recently launched an online sustainable investing course for its 16,000 financial advisors.