Morgan Stanley Sustainable Signals: U.S. Individual Investors Maintain Strong Interest in Sustainable Investing Despite COVID-19 Pandemic

Rhea-AI Summary

The latest survey from the Morgan Stanley Institute for Sustainable Investing reveals strong interest in sustainable investing among U.S. individual investors, particularly Millennials, with 99% expressing interest. Despite a dip to 79% overall interest due to the pandemic, sustainable investing remains prevalent. Key findings include a focus on climate change, where 88% of Millennials show interest in climate-themed investments. Concerns about performance persist, with 76% of investors citing it as a barrier. The survey underscores the importance of ESG factors in corporate performance amidst the ongoing emphasis on long-term investment goals.

Positive

• 99% of Millennials expressed interest in sustainable investing.
• Sustainable investing interest remains strong, with 79% of U.S. investors focused on it during the pandemic.

Negative

• Overall interest in sustainable investing dipped from 85% in 2019 to 79% in 2020.
• 70% of individual investors believe sustainable investing requires a financial trade-off, up from 64% in 2019.

• 79% of investors remained focused on sustainable investing during the COVID-19 pandemic
• 99% of Millennials were interested in sustainable investing, an all-time high

NEW YORK--(BUSINESS WIRE)-- Four in five U.S. individual investors remained focused on sustainable investing during the COVID-19 pandemic, with an all-time high of 99% interested among Millennials, according to a new survey published today by the Morgan Stanley Institute for Sustainable Investing. The fourth edition of the individual investor survey, Sustainable Signals, was released today at the 2021 Morgan Stanley Sustainable Investing Summit featuring a roster of leaders including former U.S. Vice President Al Gore, former Governor of the Bank of England Mark Carney, and Pfizer CEO Dr. Albert Bourla. The report examines the attitudes, perceptions and behaviors of individual investors with respect to sustainable investing. Following three prior Sustainable Signals individual investor surveys, the findings show that interest and adoption of sustainable investing has grown significantly since 2015 and reached mainstream adoption among the average investor.

“Interest in sustainable investing has grown tremendously in recent years, and our research shows that this interest persisted despite the COVID-19 pandemic and resulting market volatility,” said Audrey Choi, Chief Sustainability Officer, Morgan Stanley. “This suggests that interest in sustainable investing is here for the long-run, and investment professionals would be well-served by incorporating it into their practices to yield potentially attractive financial returns, alongside positive environmental and social impact.”

Results from the survey reveal four central themes:

• 2020’s turbulence impacted sustainable investing; overall interest dipped by 6 percentage points to 79% from 85% in 2019, amid economic concerns during the pandemic.
  • Public health and support for small businesses surged among investors’ thematic priorities with 61% expressing ‘more interest in the topics due to COVID-19.’
• Climate change remains a top focus, especially for Millennials and investors with a positive economic outlook.
  • Eighty-eight percent of Millennials and 93% of individual investors who believe the economy is strong, expressed interest in climate-themed investments, compared with 74% of all investors.
  • Amid rising concern about climate change, 60% of investors are equally interested in solutions that mitigate greenhouse gas emissions and support climate adaptation.
• Questions about sustainable investment performance persist.
  • More individual investors now believe sustainable investing requires a financial trade-off (70%) than in 2019 (64%), despite growing evidence to the contrary.
• Opportunities exist to better support individuals on their sustainable investing journeys.
  • Performance concerns are the biggest barrier investors cite (76%) to investing sustainably.
  • Only a slight majority of investors (56%) say their advisors have asked about investment goals outside of financial performance.

“The pandemic underscores the relevance of ESG considerations to corporate performance and encourages investors to focus on long term goals, including a new emphasis on public health and racial justice, in addition to environmental matters,” said Matthew Slovik, Managing Director and Head of Global Sustainable Finance, Morgan Stanley.

The survey polled 800 U.S. Individual Investors with minimum investable assets of $100,000. The survey also included an oversample of 203 Millennials, aged 25-38. This fourth edition of the Morgan Stanley Sustainable Signals individual investor survey further builds our body of insight and analysis and helps informs our efforts to promote sustainable investing

View the full results of the Sustainable Signals survey here.

About The Morgan Stanley Institute for Sustainable Investing

The Morgan Stanley Institute for Sustainable Investing builds scalable finance solutions that seek to deliver competitive financial returns while driving positive environmental and social impact. The Institute creates innovative financial products, thoughtful insights and capacity building programs that help maximize capital to create a more sustainable future. For more information about the Morgan Stanley Institute for Sustainable Investing, visit www.morganstanley.com/sustainableinvesting.

About Morgan Stanley

Morgan Stanley (NYSE: MS) is a leading global financial services firm providing investment banking, securities, wealth management and investment management services. With offices in more than 41 countries, the Firm's employees serve clients worldwide including corporations, governments, institutions and individuals. For more information about Morgan Stanley, please visit www.morganstanley.com.

Disclosures

This has been prepared for informational purposes only and is not a solicitation of any offer to buy or sell any security or other financial instrument, or to participate in any trading strategy. This material does not provide individually tailored investment advice. It has been prepared without regard to the individual financial circumstances and objectives of persons who receive it. Securities discussed in this report may not be appropriate for all investors. It should not be assumed that the securities transactions or holdings discussed were or will be profitable. Morgan Stanley recommends that investors independently evaluate particular investments and strategies and encourages investors to seek the advice of a Financial Advisor.

Information contained in this material is based on data from multiple sources and Morgan Stanley makes no representation as to the accuracy or completeness of data from sources outside of Morgan Stanley. Morgan Stanley makes every effort to use reliable, comprehensive information. We have no obligation to tell you when opinions or information in the report change.

Past performance is not a guarantee or indicative of future performance. Historical data shown represents past performance and does not guarantee comparable future results.

This material contains forward-looking statements and there can be no guarantee that they will come to pass.

The returns on a portfolio consisting primarily of Environmental, Social and Governance (“ESG”) aware investments may be lower or higher than a portfolio that is more diversified or where decisions are based solely on investment considerations. Because ESG criteria exclude some investments, investors may not be able to take advantage of the same opportunities or market trends as investors that do not use such criteria. Diversification does not guarantee a profit or protect against loss in a declining financial market.

Investing in the market entails the risk of market volatility. The value of all types of investments, including stocks, mutual funds, exchange-traded funds (“ETFs”), and alternative investments, may increase or decrease over varying time periods.

An investment in an exchange-traded fund involves risks similar to those of investing in a broadly based portfolio of equity securities traded on exchange in the relevant securities market, such as market fluctuations caused by such factors as economic and political developments, changes in interest rates and perceived trends in stock prices. The investment return and principal value of ETF investments will fluctuate, so that an investor’s ETF shares, if or when sold, may be worth more or less than the original cost.

Investors should carefully consider the investment objectives and risks as well as charges and expenses of a mutual fund/exchange-traded fund before investing. To obtain a prospectus, contact your Financial Advisor or visit the fund company’s website. The prospectus contains this and other information about the mutual fund/exchange-traded fund. Read the prospectus carefully before investing.

Equity securities may fluctuate in response to news on companies, industries, market conditions and general economic environment. Companies paying dividends can reduce or stop payouts at any time.

Because of their narrow focus, sector investments tend to be more volatile than investments that diversify across many sectors and companies.

Morgan Stanley, its affiliates, employees and Morgan Stanley Financial Advisors do not provide tax, accounting or legal advice. Individuals should consult their tax advisor for matters involving taxation and tax planning, and their attorney for matters involving legal matters.

© 2021 Morgan Stanley & Co. LLC and Morgan Stanley Smith Barney LLC. Members SIPC. All rights reserved.

CRC 3863842 10/2021

View source version on businesswire.com: https://www.businesswire.com/news/home/20211027005375/en/

Media Relations: Katherine Stueber, Katherine.stueber@morganstanley.com

Source: Morgan Stanley

FAQ

What were the key findings from the latest Morgan Stanley survey on sustainable investing?

The survey found 99% of Millennials are interested in sustainable investing, with overall interest at 79% despite a decline from 2019.

How did the COVID-19 pandemic affect sustainable investing interest among investors?

The pandemic caused a dip in sustainable investing interest to 79% from 85% in 2019, highlighting economic concerns.

What percentage of Millennials are interested in climate-themed investments according to the survey?

88% of Millennials expressed interest in climate-themed investments, which reflects a strong focus on climate change.

What barriers do investors face regarding sustainable investing?

76% of investors cite performance concerns as a barrier to investing sustainably.

How many individual investors participated in the Morgan Stanley survey?

The survey polled 800 U.S. individual investors with at least $100,000 in investable assets.