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Morgan Stanley Survey Finds Investor Enthusiasm for Sustainable Investing at an All-Time High

September 12, 2019

NEW YORK

85% of U.S. individual investors now express interest in sustainable investing strategies.
As the market matures, individual investors seek more product choices that match their interests and impact measurement capabilities.

More than eight in ten U.S. individual investors now express interest in sustainable investing, while half take part in at least one sustainable investing activity, according to a new survey published today by the Morgan Stanley Institute for Sustainable Investing. The third edition of the individual investor survey, Sustainable Signals, examines the attitudes, perceptions and behaviors of individual investors towards sustainable investing. Following two prior Sustainable Signals individual investor surveys, the findings show that interest and adoption of sustainable investing has grown steadily since 2015.

“These findings reaffirm that sustainable investing has entered the mainstream and is here to stay,” said Audrey Choi, Chief Sustainability Officer and Chief Marketing Officer at Morgan Stanley. “Increasingly, investors want to know what they own and want those holdings to reflect their values.”

Results from the survey reveals four central themes in the sustainable investing field:

Investor interest and adoption continues to rise; 85% are interested in sustainable investing.
- 95% of millennials now express interest in sustainable investing.
- This trend also extends to adoption: 52% of the general population and 67% of millennials take part in at least one sustainable investing activity, such as investing in companies or funds that target specific environmental or social outcomes.

Investors want products that match their interests; 84% want the ability to tailor their investments to their impact goals, 90% among millennials.
- The survey also found strong interest among investors for tracking the impact return on their investments—84% wanted an impact report, 90% among millennials.

Investor conviction outweighs financial trade-off concerns; 86% believe that corporate ESG practices can potentially lead to higher profitability and may be better long-term investments.
- 88% believe that it is possible to balance financial gains with a focus on social and environmental impact.
- Nevertheless, perceptions of trade-offs linger, with 64% agreeing that investors must choose between financial gains and sustainability. Meanwhile, Morgan Stanley’s recent report, Sustainable Reality: Analyzing Risk and Returns of Sustainable Funds, shows that there is no financial trade-off in the returns of sustainable funds compared to traditional funds, and they demonstrate lower downside risk.

Investors want more product choices; 65% cited lack of available financial products as a barrier to including sustainable investing in their portfolios.

“Morgan Stanley has been a pioneer in the impact investing space since we launched our Global Sustainable Finance Group over a decade ago, and have since witnessed the rising interest and adoption in the market over time,” said Matt Slovik, Head of the Global Sustainable Finance Group at Morgan Stanley. “We’ve responded to this market demand by creating innovative products, such as the Morgan Stanley Impact Quotient, to empower our clients to participate in ESG investing and are focused on improving industry capabilities for portfolio customization and impact measurement.”

The survey polled 800 U.S. Individual Investors with minimum investable assets of $100,000. The survey also included an oversample of 200 Millennials, aged 18-37. This survey builds on a previous Morgan Stanley survey conducted in 2017 titled, Sustainable Signals: New Data from the Individual Investor.

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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.

About Morgan Stanley Wealth Management

Morgan Stanley Wealth Management, a global leader, provides access to a wide range of products and services to individuals, businesses and institutions, including brokerage and investment advisory services, financial and wealth planning, cash management and lending products and services, annuities and insurance, retirement and trust services. Morgan Stanley Wealth Management is a business of Morgan Stanley Smith Barney LLC.

Disclosures

This material was published on September 11, 2019 and 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 was not prepared by the Morgan Stanley Research Department and is not a Research Report as defined under FINRA regulations. 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. Morgan Stanley Smith Barney LLC and Morgan Stanley & Co. LLC (collectively, "Morgan Stanley"), Members SIPC, recommend that recipients should determine, in consultation with their own investment, legal, tax, regulatory and accounting advisors, the economic risks and merits, as well as the legal, tax, regulatory and accounting characteristics and consequences, of the transaction. The appropriateness of a particular investment or strategy will depend on an investor's individual circumstances and objectives.

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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.

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Past performance is not a guarantee or indicative of future performance.

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