I often speak of the important role that corporates play in the development of new climate innovations, particularly with respect to devising new solutions to stem the tide of plastic waste. As we make progress towards the creation of a circular economy and work to mitigate the negative effects of plastic pollution, there is another group whose capital and engagement are critical in bringing scale to solutions: financial institutions.
One major global financial services firm that is having an outsized impact is Morgan Stanley. I recently chatted with Matthew Slovik, Head of Global Sustainable Finance at Morgan Stanley, to talk about the plastic waste crisis, what global financial institutions can do to scale the sector and what kinds of investments he’s seeing that excite him.
RK: In 2019, Morgan Stanley planned a uniquely public stake in the ground when you announced your Plastic Waste Resolution. I’ve had the pleasure of working with you and your colleagues through our engagement with the World Economic Forum’s Global Plastic Action Partnership (GPAP). To date, you are the only major global bank at GPAP. Why has Morgan Stanley chosen to focus on finding solutions that can remediate the plastic waste crisis and turn it into something that can help power our global economy?
MS: This question is one we often hear when people learn about our commitment to reduce and remove 50 million metric tons of plastic waste from the environment by 2030. We know that plastic provides society tremendous benefits, but the problem is that plastic waste is an enormous one environmental challenge and an economic concern. Obviously, Morgan Stanley is not a large-scale producer or user of plastic, nor do we generate significant quantities of plastic waste. But what we realized is that we can have a meaningful role in helping facilitate solutions because as a global financial institution we work closely with many of the actors across the plastics value chain.
We also know that these solutions must come at scale and that is why we have been focused on working across sectors with investors, entrepreneurs and corporations who are also committed to reducing the environmental and economic impacts of plastic waste.
RK: What are some of the ways that Morgan Stanley is using its role in the capital markets to facilitate innovative financing?
MS: We have been a leader in sustainable finance since the formation of our Global Sustainable Finance Group (GSF) in 2009. At that time, I believe we were one of the few firms on Wall Street to approach environmental, social and governance (ESG) Issues as a business opportunity, and since then we have stayed out-front by incorporating ESG considerations across our core businesses.
Presently, one-third of professional assets under management globally are invested sustainably. This equates to more than $35 trillion, and it is estimated that by 2025, the amount will grow to more than $53 trillion. These trends align with a recent survey published by the Morgan Stanley Institute for Sustainable Investing that showed four in five US individual investors remained focused on sustainable investing during the COVID-19 pandemic, with an impressive 99% interest among Millennials. All this has translated into new opportunities for our Global Capital Markets and Investment Banking teams, supporting companies with innovative sustainable products and goals.