Morgan Stanley’s sustainability strategy by the numbers
As you may expect from a leading financial services firm, Morgan Stanley’s sustainability credentials are all about the numbers – both large and small.
There is zero (which is good when it comes to net emissions) and there is a trillion (which is great when that equates to dollars being mobilised for sustainable solutions that support the UN Sustainable Development Goals).
There are also firsts. In 2020, Morgan Stanley was the first major US-headquartered global financial services firm to commit to achieving net zero in financed emissions by 2050.
In 2022, the company achieved carbon neutrality across direct Scope 1 emissions, indirect Scope 2 from energy purchasing, and Scope 3 from business travel and owned assets that are leased.
Morgan Stanley’s latest ESG Report was published in August 2023, and it highlights some of the key achievements. Unsurprisingly, it was the significant numbers that garnered the most attention.
Through 2022, Morgan Stanley mobilised US$700 billion in capital, including US$550 billion in low-carbon and green solutions. That is already some serious headway in the stated ambition of a trillion dollars by 2030, with US$750 billion for low-carbon initiatives. It would not surprise Sustainability magazine if Morgan Stanley were to first to reach and then increase that commitment.
The 2022 ESG Report highlighted the firm’s resilience in the face of high inflation, war in Europe, and geopolitical tensions globally – while still delivering on environmental, social and governance.
“At Morgan Stanley, our D&I, climate and sustainability efforts go hand in hand,” said Chairman and CEO James P Gorman in his summary.
“We have made progress across our business, with our firm’s culture guiding our activities. As we continue to deliver long-term value for our shareholders, we remain focused on ESG objectives for our clients, employees and the communities in which we live and work.”
Morgan Stanley employs more than 82,000 people in 41 countries, so that is a significant footprint and responsibility. The firm works across three business segments – Institutional Securities, Wealth Management, and Investment Management, and business activities and stakeholder relationships are guided by the following core values:
Put Clients First
Do the Right Thing
Lead With Exceptional Ideas
Commit to D&I
Give Back
Morgan Stanley has an integrated approach to ESG that combines diversity & inclusion, climate, and sustainability.
Morgan Stanley’s D&I Strategy
Morgan Stanley launched the Institute For Inclusion (IFI) in 2020 to support investments in underserved communities and accelerate its own diversity efforts. The IFI brings employees, communities and clients together in a shared commitment to creating a more equitable society.
Morgan Stanley’s Climate Strategy
Jessica Alsford is Chief Sustainability Officer and CEO of the Morgan Stanley Institute for Sustainable Investing, and she says the firm recognises how important it is to balance the need to rapidly decarbonise the global economy with the real-world circumstances affecting individuals and communities.
To achieve net-zero financed emissions by 2050, Morgan Stanley has a four-pillar strategy:
- Support the transition to a low-carbon and green economy
- Manage climate risk
- Provide relevant, transparent and useful climate-related disclosures
- Enhance the climate resilience of operations
The approach to achieving net zero financed emissions by 2050 ‘will not be a straight line’, according to the ESG Report, with clients at different stages in their own journeys.
The report states while the firm appreciates the need to decarbonise quickly, the need for an orderly transition may mean financed emissions actually increase in the short term – but it is important to consider the destination and accept a few speed bumps along the way.
Morgan Stanley’s Sustainability Strategy
Established by James Gorman in 2013, the Morgan Stanley Institute for Sustainable Investing (ISI) aims to accelerate sustainable finance and is guided by an advisory board of business leaders, academics and NGOs to drive internal sustainability initiatives.
In 2022, grants of US$250,000 were provided to five startups as part of the Sustainable Solutions Collaborative. One of those was UK-based sustainable packaging company Notpla which went on to win the £1 million Earthshot Prize that same year.
READ the Morgan Stanley 2022 ESG Report.
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