MSIM's sustainable investing philosophy is anchored on the belief that there is a spectrum of approaches to utilize material environmental, social and governance (ESG) information and criteria to deliver strong returns for clients.
We are committed to ESG-informed investment decision making and we seek to leverage our influence to drive better investment performance alongside improved sustainability practices and outcomes through thoughtful, value-added investee engagement. MSIM offers a variety of sustainable investing options, from funds that integrate ESG factors as an intrinsic part of the investment process, to thematic Sustainable Funds that seek to achieve attractive financial returns alongside positive impact.
MSIM has identified four focus areas that are of strategic importance to our thematic research and company engagement/asset stewardship work that are both potentially material to our investment goals and vitally important from a systemic perspective. These themes touch all our investment teams to varying degrees depending on asset class, geography, and investment style and strategy.
Supporting the transition to a low carbon economy and net zero alignment
Supporting business models that reduce impact on natural resources and that reduce waste generation
Supporting businesses and business practices that create a more just, equitable and inclusive society
Supporting decent work across the entire value chain and helping to create resilient workforces in the face of innovation and change
Our investment teams are committed to ESG integration as a tool to deliver strong returns and manage risk. Their efforts are supported by world-class specialist resources, and guided by the MSIM-wide Sustainable Investing Policy.
in Strategy & Governance; Listed Equity Incorporation and Active Ownership; Corporate Fixed Income; and Securitized Fixed Income
in Property, Infrastructure, and Sovereign Fixed Income
Green Star recognition for Core and Value-add/Opportunistic Real Estate funds
As active managers and long-term investors, we believe we have both a duty and an opportunity to steward the capital we manage. Our investment teams embrace this opportunity by engaging directly with their portfolio companies and by effectively exercising our proxy voting and other rights as shareholders.
company engagements covering sustainability topics
meetings voted across 74 different markets
percentage of shareholder proposals for enhanced climate change reporting from companies supported
percentage of proposals urging companies to adopt GHG emission reduction targets supported
votes against say-on-pay proposals
votes against management
Our sustainable investing expertise is delivered through flexible solutions designed to help clients achieve their sustainable investing and impact goals. Please refer to our capabilities section below.
Investment strategies which strive to align with the Paris Agreement on climate change
MSIM's Sustainability Council comprises senior, cross-functional business and investment leaders who oversee and guide MSIM's support for the sustainable investment strategies of each business. This includes promoting definitions and frameworks for Sustainable Investing; supporting the continued innovation of ESG products and solutions; championing Sustainable Investing across MSIM's staff and culture; and ensuring business readiness for evolving client/regulator demands.
The Sustainability Team is responsible for developing MSIM's ESG investment integration standards, helping to launch thematic Sustainable Funds, advising clients on sustainability matters, and producing sustainability data, tools and research in support of our investment teams. The Sustainability Team also comprises the Global Stewardship function, which coordinates our stewardship and investee engagement agenda.
Our portfolio management teams are ultimately responsible for evaluating the ESG risks and opportunities of each investment decision or asset, and the portfolio as a whole. In doing so, they leverage ESG information and insights in a way that is aligned with their existing investment philosophy and strategy. Our largest teams or asset class platforms have appointed at least one dedicated ESG research specialist to lead this work for the relevant group.
The Institute is dedicated to accelerating the adoption of sustainable investing by partnering across the firm to foster innovation, help develop the next generation of sustainable investing leaders and generate insights that inform and empower investors.
ESG Strategies that incorporate impact investing and/or Environmental, Social and Governance (ESG) factors could result in relative investment performance deviating from other strategies or broad market benchmarks, depending on whether such sectors or investments are in or out of favor in the market. As a result, there is no assurance ESG strategies could result in more favorable investment performance.
MSIM offers a range of customized and dedicated sustainable investing capabilities spanning multi-asset and private markets. For example, within customized multi-asset portfolios, we may customize a basket of securities or funds according to the particular sustainability preferences of the client. On the private markets side, we offer thematic impact investing opportunities across a range of focus areas, including climate and social impact.
The performance is provided for illustrative purposes only and is not meant to depict the performance of a specific investment. Past performance is no guarantee of future results.
We believe that macro sustainability trends, such as climate change, pollution and waste and human capital development, pose a growing set of risks and opportunities to all investors, and leveraging ESG information can assist to better identify the materiality of those risks and opportunities. While the macro trends are universal and often science-based, their implementation in investing needs to be done thoughtfully as the materiality of these factors will depend on asset class, investment strategy, geography, industry, and time horizon. Accordingly, our investors adopt a bottom-up approach to ESG integration, actively seeking to identify the most material sustainability risks and opportunities relevant to their investment universe, and incorporating those considerations into buy/sell decisions, portfolio construction, and ongoing investment monitoring.
As described in our Sustainable Investing Framework above, MSIM’s Sustainable Objective and Impact funds seek to achieve positive social and/or environmental objectives alongside a market-rate financial return.
In addition to dedicated impact investing solutions many of our Sustainable Core funds have adopted or are moving towards adoption of net zero emissions targets in line with the 1.5°C goal of economic decarbonization by 2050. By investing in net zero aligned funds, investors have the opportunity to contribute to positive impact by supporting the transition to a low carbon economy.
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