Sustainability: Capital Seeker

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Our Approach

Our Approach
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Our Approach

As a client-centric organization, MSIM’s approach is premised on delivering investment and risk management solutions tailored to a wide range of clients’ preferences, including any relevant sustainability preferences. We believe that environmental, social and governance (“ESG”) factors can present investment risks and opportunities. Understanding and managing these risks and opportunities may therefore contribute to both risk mitigation and long-term investment returns. Engagement and stewardship are a key part of this understanding, where investment teams seek to engage with the assets or companies they own, seeking to deliver long-term value and align with our objective to be responsible stewards of our clients’ capital.

MSIM investment teams act as responsible long-term investors and our collective purpose in delivering long-term value for our clients therefore guides our sustainability business agenda, investment and stewardship activities. We seek to deliver on this approach in three main areas:

Deliver Global Depth and Breadth in Sustainable Investing Expertise
Offer Clients a Spectrum of Flexible and Innovative Sustainable Investing Solutions
Maintain High Standards of Governance and Stewardship

Individual strategies may have specific ESG related goals and restrictions.

Please refer to governing documents of individual vehicles to understand their binding ESG criteria. There is no assurance strategies that incorporate ESG factors will result in more favorable investment performance.

As active investors and active owners, MSIM has a duty to be good stewards of our clients’ capital. We fulfil this duty by seeking to engage with selected companies in which we invest, and by exercising our proxy voting and other rights as shareholders. These stewardship activities give us the opportunity to help guide companies in which we invest toward better ESG practices, which we believe may contribute to producing attractive returns for our clients over the long-term.

MSIM has identified five common themes which certain of our investment teams focus on in their engagements, based on respective strategies, where relevant and appropriate. These five MSIM Engagement Themes¹ are aligned with the United Nations Sustainable Development Goals, which are areas that may cause risk to our society and well-being, global economy and/or capital markets, but may also present opportunities for improved sustainable and/or financial outcomes.

Decarbonization & Climate Risk: Supporting the transition to a low carbon economy in line with Paris Agreement goals.
Circular Economy & Waste Reduction: Supporting business models that reduce impact on natural resources that reduce waste generation.
Diverse & Inclusive Business: Supporting business practices that create a more just 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.
Natural Capital & Biodiversity: Supporting business models that reduce negative impact on biodiversity in line with the Post 2020 Biodiversity Framework.

Leadership in Sustainability

MSIM ESG Committee

Co-chaired by the MSIM Head and CIO of the Solutions & Multi-Asset Group and MSIM’s Head of Risk Management, the MSIM ESG Committee consists of senior representatives from MSIM’s Sustainability team, Office of the Chief Operating Officer and other advisory and related functions who oversee and guide MSIM’s support for the sustainable investment strategies of each investment business.

Sustainable Investing Team Leads

Many of MSIM’s investment teams or asset class platforms have appointed at least one dedicated Sustainable Investing/ESG specialist to co-ordinate and support the sustainable investing approaches for the relevant team. A key responsibility of these specialists is to work with their respective investment teams to help encourage incorporation of ESG factors where relevant, in line with each team’s investment philosophy and strategy.

MSIM Sustainability Team

Led by MSIM’s Global Head of Sustainability, the MSIM Sustainability team supports MSIM’s collective sustainable-related processes and governance. This includes working with the sustainability leads from our investment teams to coordinate global sustainable investing and stewardship initiatives. These activities include supporting investment teams in relation to sustainability-related reporting and regulatory disclosure requirements, incorporating ESG factors into their investment approaches, developing sustainable products and supporting sustainability data utilization, development of tools and sustainability research, as appropriate. MSIM’s Global Stewardship function, as part of the MSIM Sustainability team, supports and helps investment teams coordinate MSIM proxy voting and investee engagement activities.

Morgan Stanley Global Sustainability Office

MSIM’s sustainable investing efforts are supported by Morgan Stanley’s decade-plus commitment to sustainable finance and Firm-level resources. The Morgan Stanley Global Sustainability Office drives the Firm’s sustainability strategy and helps to integrate sustainability considerations across the Firm’s policies, business activities and operations.

Environmental and Social Risk Management Group

The Firm’s Environmental and Social Risk Management Group provides internal subject matter expertise to MSIM’s private markets teams on environmental and social risk, conducts due diligence on relevant transactions, engages with stakeholders, and monitors emerging risks and developments in partnership with the Firm’s business units, GSO and other relevant control functions.

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