- Plastics reduction and climate change are sustainable investors’ top priorities.
- Solutions to plastic waste must come from all sectors.
- Financial institutions have a unique vantage point from which to address this issue.
The World Economic Forum’s Global Plastic Action Partnership sat down with Audrey Choi, Chief Sustainability Officer and CEO of the Institute for Sustainable Investing at Morgan Stanley, to discuss the role financial institutions can play in tackling plastic waste.
What is ‘sustainable finance’? How is it different from ‘business as usual’?
We define sustainable investing as taking traditional investment practices and strategies and enhancing them with additional insights gained from considering environmental, social and governance (ESG) factors. We believe this can provide added insights into risks that could affect investments, as well as provide unique opportunities for investors.
Morgan Stanley’s Institute for Sustainable Investing has been polling investors since 2015 on their thoughts and attitudes around ESG. Over that time, investor interest in sustainable investing has grown from 71% in 2015, to 75% in 2017, and jumped to 85% among US investors last year. Investors have also told us they believe their investment decisions can impact the issues they care about most, with 84% wanting products that will allow them to match their investment choices with their values, and 86% saying that they believe ESG practices may potentially lead to better profitability and may be better long-term investments.
When we asked investors last year about which areas of ESG they were most passionate, climate change and plastic reduction topped their list. In 2018, the number of earnings calls that included mentions of “plastic waste” increased 340% year over year. Matching this growth in interest, the amount of assets allocated towards sustainable investing has also grown; in the US, $3 trillion was allocated to sustainable investments in 2009, and by 2018, this had quadrupled to $12 trillion. Globally, one in every three dollars is now focused on sustainable assets, topping $30 trillion — up 34% over the previous two years. More recently, green bonds have experienced significant growth — from $2.6 billion in 2012 to more than $200 billion in 2019.