Two-thirds asset managers pursue sustainable investing – Morgan Stanley

18 Nov 2016, 12:00 am
Financial Nigeria

Summary

The surge in sustainable investment activity has been spurred by rising investor demand and media coverage.

Morgan Stanley headquarters, New York

A new survey by Morgan Stanley and Bloomberg has shown that asset management professionals have admitted to using sustainable investing strategies to achieve competitive market-rate financial return, alongside positive social or environmental impact.

The survey, tagged, Sustainable Signals: The Asset Managers Perspective, further states that 64 per cent of asset managers believe that the adoption of sustainable investing will grow. According to a statement released on Thursday, the survey results indicate that the surge in sustainable investment activity has been spurred by rising investor demand and media coverage, resulting in a proliferation of new products from both specialist and mainstream asset management firms.

“Sustainable investing continues to make significant inroads in the broader investment community, led by individual and institutional investor demand for products that effectively and credibly deliver both financial and social returns,” said Audrey Choi, CEO of the Morgan Stanley Institute for Sustainable Investing.  “However, as the market grows, it’s imperative we empower asset owners and asset managers with information and insights that enable them to combine the best of traditional investing practices with rigorous and material environmental, social and governance considerations.”

The report examined the practices and perspectives of 402 US-based asset managers on sustainable investing and offers insights and action steps for asset managers and asset owners interested in pursuing sustainable investing strategies.

Other key findings of the survey show that: 89 per cent of the respondents were familiar with sustainable investing, 65 per cent said they practiced sustainable investing, and 64 per cent believe its adoption will grow. However, the survey also revealed that 62 per cent of respondents said proof of financial performance by sustainable investment products would increase their firm’s commitment; 55 per cent said the field lacks credible data to inform decision making; and 51 per cent were confident they can explain the non-financial impacts of sustainable investing to clients.
 
“At Bloomberg, we see broader interest in sustainable investing approaches among asset managers, who are adopting new analytical approaches and differentiating their investment products,” said Curtis Ravenel, Global Head of Sustainable Business and Finance at Bloomberg LP.  “This shift is driven by both client demand and potential benefits for manager performance, both to manage ESG risk and identify sustainability-driven opportunities. As a result, managers and analysts are definitely starting to demand more transparent and actionable information to enable better investment decision-making.”


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