Morgan Stanley offers new tool to let advisors, investors measure sustainable investing goals


Morgan Stanley signage on the door of their headquarters building in New York.

Scott Mlyn | CNBC

Morgan Stanley is offering a new tool to help financial advisors and their clients measure sustainable investing choices and how they perform in their portfolios.

The analytics and reporting application, called Morgan Stanley Impact Quotient, was announced on Monday. The firm said the feature is part of the firm’s commitment to make sustainable investing a bigger part of the conversation between advisors and their clients.

The tool helps clients prioritize preferences when it comes to environmental, social and governance interests. That may include climate change, gender equality or religious values.

Once those priorities have been identified, the application then uses Morgan Stanley’s proprietary analytics and third-party data to measure how well portfolios reflect clients’ sustainable investing priorities. It can also evaluate how well a client’s investments align with the United Nation’s Sustainable Development Goals.

“It completely empowers the client to give them comfort and confidence that there is values alignment, because they’re defining what their values are,” said Lisa Shalett, chief investment officer at Morgan Stanley Wealth Management.

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Financial advisors also receive suggestions for investments that might better reflect their clients’ impact goals.

When clients receive their account statements, they will be able to see how well their investments are performing relative to those sustainable goals, in addition to traditional metrics like returns and risk.

“You will actually have more data that you can use to make good decisions,” said Audrey Choi, chief sustainability officer and chief marketing officer at Morgan Stanley. “It will actually help you to have a deeper, richer understanding of both risk and opportunity as an investor.”

The launch of the tool comes as Morgan Stanley has seen through its own polls that investor demand for environmental, social and governance investing, and sustainable and impact investments is growing. About 80% of individual investors indicate they want to be able to tailor their investments to those goals. For millennials, it’s 89%.

The new feature is part of a more than decade-long mission to make sustainable investing a priority at the firm. That included the creation of the Global Sustainable Finance Group to make the relationship between sustainability and investing a bigger part of the firm’s overall strategic business focus.

Morgan Stanley Impact Quotient, or Morgan Stanley IQ, has been in trials for the last six to nine months and will be gradually rolled out to all of the firm’s financial advisors.

For investors, there is no minimum investment or level of assets needed to have access to the new features.

“We’re really excited about this democratization of access,” Choi said.

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