Morgan Stanley
  • Wealth Management
  • Sep 1, 2022

A Data-Driven Way to Align Your Investments and Values

New tools from Morgan Stanley merge data and technology to help you find investments with positive environmental and social impact and firms leading on diversity.

As demand for sustainable investing has increased, the number of funds claiming to incorporate environmental, social and governance (ESG) data into their investment process has increased nearly fourfold since 2014.1

But, until now it’s been difficult to measure how much an asset manager prioritizes environmental or social issues when making decisions. Two new tools from Morgan Stanley can help.

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Get a Clearer Picture of an Investment’s Impact with Impact Signal

For almost a decade, Morgan Stanley has been evaluating managers on the basis of their qualitative and quantitative alignment with our Investing with Impact framework. In other words, we’ve been tracking how fund managers adhere to ESG and other values-based principles when making their investment decisions. Using data from our Morgan Stanley Impact Quotient® application, along with other reputable third-party data partners, we have introduced Impact Signal.

With this innovative manager evaluation tool, your Morgan Stanley Financial Advisor can show you the strength of an investment’s environmental and social impact. Impact Signal delivers insights across a range of mutual funds, exchange-traded funds (ETFs) and separately managed accounts (SMAs) in each major asset class. The result? You get the transparency and information you need to help identify strategies that have delivered positive environmental and social outcomes.

Highlighting Commitment to Diversity, Equity and Inclusion

In addition to Impact Signal, Morgan Stanley has introduced Diversity, Equity and Inclusion (DEI) Signal, which monitors asset managers’ firm-level progress—and potential—in achieving more diverse and balanced representation among their leadership. Using our proprietary research and data-gathering tools, along with our own market insights, we developed the tool to promote transparency and accountability in the investment management industry. Your Morgan Stanley Financial Advisor can use it to help track whether the managers of the funds in which you invest are using their influence to end underrepresentation of marginalized groups in corporate leadership.

Recent studies have helped to quantify ESG factors once considered unquantifiable, such as diversity. Morgan Stanley & Co. Research, for example, has found that most gender-diverse companies tend to be larger, have better stock performance and skew toward lower volatility.2 According to a 2020 McKinsey study, companies with the most ethnically diverse teams were 36% more likely to outperform on profitability, as measured by earnings before interest and taxes.3 And it makes sense: more voices and perspectives at the table can lead to new ideas and deeper insight.

Companies with the most ethnically diverse teams were 36% more likely to outperform on profitability.

Adding Impact to Your Investments

With Impact Signal and DEI Signal, investing according to your values just became that much easier. These tools help Morgan Stanley Financial Advisors evaluate asset managers’ commitment to seeking sustainable outcomes on a consistent basis, as well as whether they pursue shareholder engagement and advocacy.

Contact your Morgan Stanley Financial Advisor to find out more about these tools and to help you find the best path to invest according to your values—and know that your choices are making an impact. 

Questions to Ask Your Morgan Stanley Financial Advisor:

  • How do I get started in values-based investing?
  • How do values-based investments perform relative to the broad market?
  • How can I assess an asset manager’s commitment to seeking positive environmental and social outcomes?

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