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

• 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

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.

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CRC 3863842 10/2021

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