ESG (Sustainable Investing) and Investment Strategy
Student’s Name
Course Name: Course Code
University Name
Professor’s Name
September 12, 2020
Environmental, Social, and Governance (ESG) and Investment Strategy
Slide 1: ESG
Morgan Stanley Investment Management’s capabilities are crucial in establishing proactive measures that can be used to mitigate sustainable challenges associated with individual investors and large institutions. ESG should be tailored to conform to the needs of the customers and other stakeholders (Morgan Stanley, 2020). Collective ESG efforts require being customer-centered, identification of relevant issues, good capital stewardship, and good governance (Syed, 2014). Leadership sustainability is achieved through the integration of governance, social, and environmental standards to product development, investment processes, reporting, and engagement (Morgan Stanley, 2020). For example, Germany is a winner in the face of the COVID-19 pandemic due to the efficacy of its governance structures to coordinate local and national governments that led to reduced levels of debt. Thus, its masses will not be affected during the post-pandemic era. The phenomenon resonated with the current ESG trends in reserve management, where assets are managed with regards to ESG principles.
Slide 2: Global Sustainability
Morgan Stanley Global Sustain Strategy focuses on global equity by investing in high-quality companies at considerable valuations to maintain its profit margin on operating capital in the long-term. The portfolio as helped create a low carbon score based on optimal ESG management. The company believes in investing in attractive prospects that provide massive long-term returns; thus, ensuring proper utilization of shareholders’ capital contribution. The firm carries out the high-risk investments in the face of material and environmental risks and technological transformation (Morgan Stanley, 2020). In doing so, returns become sustainable by creating powerful intangible assets and improvable material opportunities (Clementino & Perkins, 2020). The management should also be committed to ensuring sustained outcome through capital discipline, emphasis on capital returns, innovation, and management incentives.
References
Clementino, E., & Perkins, R. (2020). How Do Companies Respond to Environmental, Social and Governance (ESG) ratings? Evidence from Italy. Journal of Business Ethics, 2(1). https://doi.org/10.1007/s10551-020-04441-4
Morgan Stanely. (2020a). Sustainable Investing. Morgan Stanley Investment Management. https://www.morganstanley.com/im/en-us/institutional-investor/about-us/sustainable- investing.desktop.html
Morgan Stanley. (2020b). ESG and Trends in Reserves Management. Morgan Stanley Investment Management. https://www.morganstanley.com/im/en-us/institutional- investor/insights/articles/esg-and-trends-in-reserves-management.html
Morgan Stanley. (2020c). Global Sustain Strategy. Morgan Stanley Investment Management. https://www.morganstanley.com/im/en-us/institutional-investor/strategies/active- fundamental-equity/global-sustain.html
Syed, A. M. (2014). “Environment, Social and Governance (ESG) criteria and preference of Managers.” Academy of Management Proceedings, 2014(1), 12048. https://doi.org/10.5465/ambpp.2014.12048abstract