PROFILE
Rui De Figueiredo
Co-Head and CIO of the Solutions & Multi-Asset Group
PROFILE
Ted Eliopoulos
CEO and President, Calvert Research and Management
PROFILE
Navindu Katugampola
Global Head of Sustainability, Investment Management
PROFILE
Mona Benisi
Executive Director, Head of Sustainability for Global Real Assets
PROFILE
Barbara Calvi
Executive Director, EMEA Head of Fixed Income ESG Strategy
PROFILE
Emily Chew
Managing Director, Chief Responsible Investing Officer
PROFILE
Vladimir A. Demine
Head of ESG Research
PROFILE
Thomas Kamei
Executive Director
PROFILE
Jade Huang
Managing Director, Applied Responsible Investment Solutions
PROFILE
John Streur
Chairman
PROFILE
Li Zhang, CFA
Head of ESG, Global Balanced Risk Control team
Rui De Figueiredo
Rui De Figueiredo
Co-Head and CIO of the Solutions & Multi-Asset Group
26 years industry experience
Ted Eliopoulos
Ted Eliopoulos
CEO and President, Calvert Research and Management
26 years industry experience
Navindu Katugampola
Navindu Katugampola
Global Head of Sustainability, Investment Management
18 years industry experience
Mona Benisi
Mona Benisi
Executive Director, Head of Sustainability for Global Real Assets
16 years industry experience
Barbara Calvi
Barbara Calvi
Executive Director, EMEA Head of Fixed Income ESG Strategy
13 years industry experience
Emily Chew
Emily Chew
Managing Director, Chief Responsible Investing Officer
12 years industry experience
Vladimir Demine
Vladimir A. Demine
Head of ESG Research
21 years industry experience
Thomas Kamei
Thomas Kamei
Executive Director
11 years industry experience
Jade Huang
Jade Huang
Managing Director, Applied Responsible Investment Solutions
18 years industry experience
John Streur
John Streur
Chairman
36 years industry experience
Li Zhang
Li Zhang, CFA
Head of ESG, Global Balanced Risk Control team
15 years industry experience

Sustainable Investing

Our Philosophy

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.

SUSTAINABILITY FOCUS AREAS

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.

DECARBONIZATION &
CLIMATE RISK

Supporting the transition to a low carbon economy and net zero alignment

CIRCULAR ECONOMY &
WASTE REDUCTION

Supporting business models that reduce impact on natural resources and that reduce waste generation

DIVERSE & INCLUSIVE
BUSINESS

Supporting businesses and business practices that create a more just, equitable and inclusive society

DECENT WORK &
RESILIENT JOBS

Supporting decent work across the entire value chain and helping to create resilient workforces in the face of innovation and change

MSIM Sustainable Investing Approach Overview

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.

HIGHLIGHTS

Our PRI** Score

A+

in Strategy & Governance; Listed Equity Incorporation and Active Ownership; Corporate Fixed Income; and Securitized Fixed Income

A

in Property, Infrastructure, and Sovereign Fixed Income

GRESB Score

Green Star recognition for Core and Value-add/Opportunistic Real Estate funds

Our Partnerships

Signatory of:

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.

HIGHLIGHTS*

670

company engagements covering sustainability topics

7,000+

meetings voted across 74 different markets

73%

percentage of shareholder proposals for enhanced climate change reporting from companies supported

55%

percentage of proposals urging companies to adopt GHG emission reduction targets supported

23%

votes against say-on-pay proposals

9%

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.

HIGHLIGHT

8

Investment strategies which strive to align with the Paris Agreement on climate change

Leadership in Sustainability

Investment Management Sustainability Council

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.

Investment Management Sustainability Team

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.

Sustainable Investing Team Leads

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.

Morgan Stanley Institute1 for Sustainable Investing

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.

OUR SUSTAINABLE INVESTING FRAMEWORK

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.

Capabilities

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.

Insights

View all Sustainable Insights

Questions & Answers

WHAT IS THE DIFFERENCE BETWEEN ESG, SRI AND SUSTAINABLE INVESTING?
ESG (environmental, social and governance), SRI (socially responsible investing) and sustainable investing are all different terms used to describe the general concept of the use of sustainability factors or information to either define or inform investment decision making. Historically ‘SRI’ has been used to describe values and ethics based approach to investing, typically focused on exclusionary screens. The acronym ‘ESG’ later emerged around the same time as the launch of the Principles for Responsible Investment, as a shorthand way to refer to the universe of environmental, social and corporate governance issues faced by companies that are not easily captured in traditional financial statements. As the field has grown, and more financially oriented ways of using sustainability information in investing have developed along with the proliferation of ESG data, we find that these terms are often used interchangeably. MSIM prefers the term sustainable investing as we believe this is becoming a catch-all term for the range of approaches deployed across the investment industry today. The graphic above, ‘Our Sustainable Investing Framework’, best describes how we view and implement the spectrum of approaches across our investment vehicles or products.
We believe that material ESG factors are an important driver of long-term financial returns from both an opportunity and risk mitigation perspective and have developed an internal framework to implement sustainable investing. In 2019, Morgan Stanley’s Institute for Sustainable Investing conducted a a study of the performance of nearly 11,000 mutual funds between 2004 and 2018 and found that there was no financial trade-off in the returns of sustainable funds compared to traditional funds and sustainable funds demonstrated lower downside risk. In 2020, the Institute released an update to this study, which found that sustainable equity and taxable bond funds outperformed traditional peers during the 2019 market boom and weathered the unprecedented global shock triggered by the COVID-19 pandemic in the first half of 2020 better than traditional funds. Specifically, U.S.-based sustainable equity funds outperformed their traditional peers by a median of 2.8% in 2019 and 3.9% in the first half of 2020. Sustainable taxable bond funds outperformed traditional peers by a median of 0.8% in 2019 and 2.3% in the first half of 2020.

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.

Have another question for us? Please email msim_sustainability@morganstanley.com

** PRI Assessment Report for Morgan Stanley Investment Management, 2020. Signatories report on their responsible investment activities by responding to asset-specificmodules in the Reporting Framework. Each module houses a variety of indicators that address specific topics of responsible investment. Signatories’ answers are then assessed andresults are compiled into an Assessment Report. The Assessment Report includes: indicator scores – summarizing the individual scores achieved and comparing them to the median;section scores – grouping similar indicator scores together into categories (e.g. policy, assurance, governance) and comparing them to the median; module scores – aggregating all the indicator scores within a module to assign one of six performance bands (from E to A+). More information is available on PRI website at https://www.unpri.org/signatories/aboutpri-assessment/3066.article. *"Top scoring brackets" refers to scoring brackets (A+ or A) which are above the scores obtained by a majority of peers. The study measured performance using Morningstar’s 'total return' measure, which accounts for the expense ratio, management, administrative, 12b-1 fees and other costs that are taken out of assets. The PRI scorecard refers to Legacy MSIM only. ‘Legacy MSIM’ means Morgan Stanley Investment Management, excluding those businesses that were wholly owned by Eaton Vance Corp. prior to the acquisition of Eaton Vance Corp. by Morgan Stanley on March 1, 2021.

1 Morgan Stanley is the parent company of Morgan Stanley Investment Management Inc. and its affiliates. References to "Morgan Stanley" in this document refer to the parent company, not to Morgan Stanley Investment Management Inc. In some instances, Morgan Stanley Investment Management Inc. may leverage or be a part of Morgan Stanley's processes and/or initiatives related to sustainable investing.

Eaton Vance and Calvert are part of Morgan Stanley Investment Management. Morgan Stanley Investment Management is the asset management division of Morgan Stanley.

This is a Marketing Communication.

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