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January 20, 2022

Daniel Simkowitz: Sustainability as Core to the Future of Investing

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January 20, 2022

Daniel Simkowitz: Sustainability as Core to the Future of Investing


Sustainable Investing

Daniel Simkowitz: Sustainability as Core to the Future of Investing

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January 20, 2022

 
 

Daniel Simkowitz , Head of Investment Management and Co-Head of Firm Strategy and Execution, recently joined the Shanghai Summit organized by the Global Asset Management Forum, where he spoke on the green transition and the sustainability role Morgan Stanley Investment Management can play as a member of the financial industry.

The Global Asset Management Forum (GAMF), is an influential non-governmental think tank co-founded by the School of Economics and Management of Tsinghua University, the Sun Yefang Economic Science Foundation, and the China Wealth Management 50 Forum, a leading non-profit academic think tank. GAMF is currently chaired by Lou Jiwei, former Finance Minister of China.

Joining the discussion virtually alongside a senior group of domestic and international industry players, Daniel Simkowitz kicked off his speech noting the Firm’s long history in China and diversified onshore platform that includes securities, a commercial bank, mutual funds, and private equity.

The core to the future of investing

On the theme of ESG, Daniel Simkowitz highlighted that Morgan Stanley is proud to have long been a market leader in sustainability referencing the launch of our Global Sustainable Finance group in 2009. He noted that skepticism around whether sustainable investing is an area that profit seeking investors should or would be interested in has now faded and that the data shows many market participants see it as core to the future of investing.

“It should be no surprise that there’s more than $35 trillion of sustainable assets under professional management globally which represents more than a third of global AUM”, said Simkowitz referencing the Morgan Stanley Institute for Sustainable Investing study, “Global assets are on track to exceed $53 trillion by 2025.”

Supporting clients in ESG transition

“Over the past decade, through collaboration with asset owners from around the world to define and advance their sustainable investing programs”, Simkowitz said, “we have learned that constructing a successful sustainable investing strategy is complex, and one size does not fit all.”

He added that the Firm’s sustainability research found that even though a large majority of global asset owners integrate ESG factors into the investment process, many struggle to formulate a successful long-term strategy and nearly a third lack adequate tools to assess investment against their ESG goals.

Another key factor in defining sustainability goals and strategies would be global norms around ESG data. Daniel Simkowitz referenced research from Calvert that identified the importance of global norms, expressed in agreements such as the United Nations Sustainable Development Goals, United Nations Principles for Responsible Investment (UN PRI) and the Paris Climate Accord. Together these norms can provide a framework for investors and businesses to create a more sustainable world, he highlighted.

In addition, what COP26 has shown us is that global stakeholders of all kinds will continue to push for action, and that firms like Morgan Stanley can play a critical role supporting clients in measuring sustainability and driving further adoption.

An early ESG practitioner in China market

Daniel Simkowitz also highlighted that our China fund management joint venture Morgan Stanley Huaxin Fund Management (MSHF) started ESG investment and research back in 2018 ahead of many of our peers. MSHF established its own proprietary ESG intelligent investment research platform called ESG DataLAB the next year and is one of eight mutual fund managers in China that joined United Nations Principles for Responsible Investment (UN PRI), Simkowitz said. In 2020, MSHF established its first ESG-themed fund, a product supported by ESG DataLAB, with a combination of sustainable investment and quantitative investment strategies.

The two-day GAMF Summit, held in Shanghai in mid-January, assembled industry leaders in wealth and asset management, scholars, and key policy-makers in China from the Ministry of Finance, People’s Bank of China, China Banking and Insurance Regulatory Commission and Shanghai municipal government.

 
daniel.simkowitz
Head of Investment Management, Co-Head of Firm Strategy and Execution
 
 
 
 

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