2016 Sustainable Investing Themes: ESG Integration, Climate Change and Inequality
Sustainable investing is gaining momentum and increasingly taking its place at the center of mainstream investment conversations. We believe we are at a critical moment of change where integrating environmental, social and governance considerations into quality investment strategies is not only considered acceptable as a part of sound investment management, but is viewed as core to prudent investing and value creation. Growing interest by individual and institutional investors is driving the financial services industry to create ever more numerous and rigorous investment tools. The focus is on utilizing top-drawer traditional investment techniques combined with ESG considerations to provide improved sustainable investing options for investors to consider. As this virtuous circle continues, we believe strong growth in sustainable investing will continue this coming year and beyond as this increasingly sought-after approach is utilized by mainstream investors.
- Mainstream financial service firms and investors will increasingly look to integrate environmental, social and governance considerations.
- Climate change will be a more central focus for investors than ever before. Climate change will crescendo as a topic in the news as nations and corporations make pledges leading up to the UN Climate Change Conference in Paris.
- Economic inclusion will become an increasingly important topic for investors – not just policy makers.
The current business-as-usual value chain structures pose mounting challenges for those who have yet to be included in market-based solutions to poverty. Because the poor are disproportionately affected by many environmental and social issues, especially climate change, an enriched understanding of income inequality and of ESG factors is increasingly relevant for strategic investors trying to understand the fundamental macroeconomic risks and opportunities that could affect their investments.
Read more from Audrey Choi, CEO of Morgan Stanley’s Institute for Sustainable Investing in the December issue of the GreenMoney Journal: