James Gorman, Chairman and CEO of Morgan Stanley, offers a framework for how corporate and financial industry leaders can help build a long-term sustainable economy that yields social benefit.
1. Ensure a sustainable, resilient business model that contributes to a sound global financial system:
This is a central tenet for any leader of a financial institution. Living up to this tenet demands a sound business, in all regards, from capital reserves to risk-management procedures, corporate culture, and a commitment to our communities and environment.
2. Integrate a long-term perspective in evaluating investment opportunities and partner with clients that do the same:
Information may cause markets to move rapidly, but prudent stewards of capital should also recognize long-term trends and their cumulative effects. We increasingly consider factors such as natural-resource scarcity and climate change in our daily processes of evaluation and review. Far from being just an exercise in risk mitigation, this represents a significant growth opportunity for companies that successfully anticipate the products, strategies, and services that the future will demand.
For example, our Institute for Sustainable Investing helps develop the next generation of long-term-oriented business leaders, in partnership with INSEAD and the Kellogg School of Management at Northwestern University, challenging teams of graduate students from around the world to demonstrate how investing can go hand-in-hand with positive social impact. We are also leaders in Green Bond underwriting, helping companies and governments fund their own sustainable investments. And, since 2010, we have invested more than $7 billion in high-impact programs, such as equitable transit-oriented development and the Healthy Futures Fund, innovative programs that connect people in affordable housing with work, and co-locate health-care facilities near their homes.
Read James Gorman’s full essay, “The Long-Term Imperative for Financial Institutions: Finding innovative solutions to the challenges of the future will require stable capital markets and intermediaries,” a chapter from Perspectives on the Long Term.