Taking a systems approach to sustainability
These days we are all striving for connections. In families, between generations, in neighborhoods, and even among co-workers. We rely on it for learning, for trading, for economic growth, for innovation and for global change.
Audrey Choi is the Chief Sustainability Officer and Chief Marketing Officer at Morgan Stanley.
If we didn’t know it before, we certainly realize it now: our connectedness—the ways we are knit together—holds both benefits and risks for our health, our economies, our communities, and our planet.
That’s the essence of sustainability, really. It’s not just an environmental issue but also a fundamental economic issue. And it’s not just a health issue but also a moral imperative. The size and complexity of the challenges we face require creative, systems-level thinking.
No one acting alone—no country, no sector, no scientist, no corporation—will effect meaningful change. Solving the world’s biggest sustainability challenges will require a new kind of innovation, one that leverages insights and expertise from across a broad spectrum of sectors and industries.
Tackling plastic waste
Take the plastic waste problem. Every year, $80 to $120 billion dollars of economic value is thrown away in the form of single-use plastic packaging.(i) Every minute the equivalent of a garbage truck’s worth of plastic waste is dumped into the ocean,(ii) and according to University of Georgia environmental engineering professor Jenna Jambeck, at the current rate, by 2030 it will be a football stadium’s worth of plastic waste being dumped into our oceans every day.(iii)
Stemming the tide of plastic waste will require innovation across the entire plastics value chain – from how it is formulated in the lab, designed into products, used by consumers, and ultimately collected, recycled, and disposed of.
Two years ago, Morgan Stanley launched its Plastic Waste Resolution,(iv) not because we produce or use a lot of plastic, but because as a global financial firm we are connected to the investors, the corporations, the governments, the innovators, and the nonprofits that can make a difference. If we all work together.
The resolution is very straightforward: as a firm, we committed to facilitating the prevention, reduction, and removal of 50 million metric tons of plastic waste from nature by 2030. As part of that, we’re underwriting the Debris Tracker app,(v) which supports citizen science by empowering individuals to collect and report data litter so scientists and researchers can better understand the causes of plastic waste in coastlines and waterways.
Our social compact
Of course, sustainability is bigger and broader than plastic pollution, and “environment” is just one leg of the environmental, social, and corporate governance (ESG) stool. The last year, in fact, has brought renewed attention to the full spectrum of sustainability, and again, innovation and partnership were key to the response.
A relatively new product, “social bonds” are now helping foundations and other nonprofits fund the critical work of renewing communities, battling racial injustice, and securing a more equal future for all people. Last year, for example, Morgan Stanley partnered with the Ford Foundation to underwrite a first of its kind $1 billion social bond,(vi) which allowed the foundation to increase grant making to nonprofits during the pandemic and ensure the continuity of organizations fighting for equality and supporting vulnerable communities. And later in the year we raised our own $1 billion with a social bond that allocated capital in equal amounts to the financing and refinancing of affordable housing projects for low- or moderate-income individuals and families across the US.(vii)
That broad understanding—that sustainability takes integrated, innovative approaches to achieve—sits at the core of Morgan Stanley’s Global Sustainable Finance Group. We started it more than a decade ago with the express purpose of partnering with teams across our businesses to implement sustainable solutions and integrate sustainability into our products and services. It is also why as a firm, in September, building on our announced goal to be carbon-neutral by 2022,(viii) we became the first major US bank to pledge to reach net-zero financed emissions by 2050.(ix)
What seemed like a novelty to some back then has become core to many investor portfolios and corporate risk statements. Sustainable investing accounts for $1 out of every $3 under professional management in the US,(x) and is now a more-than $30 trillion market globally.(xi) In a recent survey, a remarkable 85% of US individual investors express interest in sustainable investing strategies,(xii) and we think the investment, the innovation and the commitment will only grow.
Real efforts are underway at our firm and across many sectors to develop, launch, and scale real sustainability efforts that together will make a difference for us and future generations. That’s good news, because our most pressing complex ESG problems will not be solved in silos.
(i) MacArthur, D. E., D. Waughray, and M. R. Stuchtey. “The New Plastics Economy, Rethinking the Future of Plastics.” World Economic Forum. 2016, https://www.ellenmacarthurfoundation.org/publications/the-new-plastics-economy-rethinking-the-future-of-plastics
(ii) Pennington, James. “Every minute, one garbage truck of plastic is dumped into our oceans. This has to stop.” World Economic Forum. 2016, https://www.weforum.org/agenda/2016/10/every-minute-one-garbage-truck-of-plastic-is-dumped-into-our-oceans/
(iii) Parker, Laura. “Plastic pollution is a huge problem—and it’s not too late to fix it,” National Geographic, October 6, 2020, https://www.nationalgeographic.com/science/article/plastic-pollution-huge-problem-not-too-late-to-fix-it
(iv) https://www.morganstanley.com/Themes/plastic-pollution-resolution
(v) https://www.nationalgeographic.org/education/programs/debris-tracker/
(viii) https://www.morganstanley.com/articles/carbon-neutral-by-2022
(x) Nason, Deborah. “’Sustainable investing’ is surging, accounting for 33% of total U.S. assets under management,” December 21, 2020, https://www.cnbc.com/2020/12/21/sustainable-investing-accounts-for-33percent-of-total-us-assets-under-management.html
(xi) Chasan, Emily, “Global Sustainable Investments Rise 34 Percent to $30.7 Trillion,” Bloomberg, April 1, 2019, https://www.bloomberg.com/news/articles/2019-04-01/global-sustainable-investments-rise-34-percent-to-30-7-trillion
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