Institute for Sustainable Investing

Sustainability Through the Eye of the Investor

Investing in businesses that seek positive environmental or social impact has grown in both moral imperative and market value. We decided to find out who these investors are, how they view opportunities in sustainability, and what the future holds.

Morgan Stanley's Institute for Sustainable Investing surveyed active individual investors and uncovered four key themes:

1. Perception Gap: Most investors believe in sustainability’s financial advantages.
2. Millenial Movement: The Next Generation can drive demand.
3. Women Leading the Way: Female investors overwhelmingly support sustainability.
4. Bright Future: Sustainable investing has climbed sharply and is gaining momentum.


71
%
of individual investors are interested in sustainable investing

1. Perception Gap

THE MAJORITY OF INVESTORS BELIEVE THERE IS A TRADE-OFF BETWEEN PROFITABLE AND SUSTAINABLE INVESTMENTS.

50
%
is a
trade off
50
%
is not a
trade off
but
0
%
of INDIVIDUAL INVESTORS believe that companies benefit when they focus on sustainability.

2. Millenial Movement

MILLENIAL INVESTORS ARE MORE FOCUSED ON SUSTAINABILITY IN THEIR CONSUMER BEHAVIOR AND DEMONSTRATE A GREATER COMMITMENT TO SUSTAINABLE INVESTING.

COMPARED TO THE OVERALL INVESTOR POPULATION, MILLENNIAL INVESTORS ARE:


3X
MORE LIKELY TO SEEK EMPLOYMENT WITH A COMPANY BECAUSE OF ITS STANCE ON SOCIAL AND/OR ENVIRONMENTAL ISSUES
2X
MORE LIKELY TO INVEST IN COMPANIES OR FUNDS THAT TARGET SPECIFIC SOCIAL OR ENVIRONMENTAL OUTCOMES
2X
MORE LIKELY TO INVEST IN COMPANIES OR FUNDS THAT AIM TO USE ESG PRACTICES TO CREATE A VALUE DIFFERENTIATOR
2X
more likely to purchase from a brand BECAUSE of the company's social and/or environmental impact
2X
more likely to exit an investment position because of objectionable corporate activity
2X
more likely to check product packaging to ensure sustainability

3. WOMEN LEADING THE WAY

FEMALE INVESTORS EXHIBIT GREATER FOCUS ON SUSTAINABLE INVESTING THAN MALE INVESTORS

vs
0
%
0
%
SEEK TO ACHIEVE A BALANCE BETWEEN RATE OF RETURN AND IMPACT WHEN MAKING AN INVESTMENT
and

FEMALE INVESTORS ARE MORE LIKELY TO SEE ENVIRONMENTAL, SOCIAL AND/OR GOVERNANCE (ESG) PRACTICES AS IMPORTANT INVESTMENT CONSIDERATIONS THAT COULD LEAD TO GREATER LONG-TERM VALUE POTENTIAL.

0
%
0
%
BELIEVE ESG FACTORS ARE IMPORTANT ASPECTS TO CONSIDER WHEN MAKING AN INVESTMENT (% AGREE)

4. bright future

A GROWING TREND: TOTAL VOLUME OF US SUSTAINABLE INVESTMENTS HAS NEARLY DOUBLED OVER THE PAST TWO YEARS

Source: US Forum for Sustainable and Responsible Investment “US Sustainable, Responsible, and Impact Investing Trends 2014,” November, 2014

EXPECTATIONS ARE HIGH THAT SUSTAINABLE INVESTING WILL BECOME MORE PREVALENT IN THE NEAR FUTURE

65
%
TWO IN THREE INVESTORS INVESTORS EXPECT SUSTAINABLE INVESTING TO BECOME MORE PREVALENT IN THE NEXT FIVE YEARS.
46
%
INVESTORS BELIEVE THAT 46% OF THEIR INVESTMENT PORTFOLIO SHOULD BE INVESTED SUSTAINABLY

Find out more about Morgan Stanley’s Institute for Sustainable Investing, its Investing with Impact Platform, Thought Leadership, and more.

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