Last spring, Morgan Stanley made news when it launched its Investing with Impact Platform, a framework designed to make it easier for retail and institutional investors to combine financial returns, personal values and positive social or environmental impact. This was the first rollout of its kind by a major financial institution. How has the platform fared, and what lies ahead? Hilary Irby, an executive director at Morgan Stanley and head of its Investing with Impact initiative, spoke with FA this week.

FA: Where does the platform currently stand?

Irby: It has been up and running since late last spring. But as we announced when we launched the platform, it is a starting point. We continue to develop it and we’ll continue to do so in the coming months jointly with our advisors and clients to make sure we’re developing it in a direction that meets client interests. Some clients are interested in integrating impact considerations into their portfolios broadly, while others are interested in pursuing deep impact around specific geographies and/or themes.  We aim to help advisors and clients achieve those goals. 

Since launch, we have added a number of products and there are many others in the pipeline awaiting approval. The majority of products on the platform are in the values alignment, ESG integration and sector exposure categories as client interest has been primarily in the more liquid products.  We continue to identify interesting product opportunities in these categories as well as impact investing.    

FA: Approximately how many investors and advisors currently use the platform?

Irby: There are a lot of investors—it’s hard to say, we don’t track it that way. I would say there has been tremendous interest in it. And since the launch, we’ve added quite a number of clients to the platform. We look at it from an asset perspective but that’s also not something that we really disclose externally. I would say there has been good growth in the platform.

It is almost a surprisingly equal split between individual and institutional investors. Clearly there are pockets of the institutional market that have been very active in this for a long time, but we’ve had broader institutional interest than originally anticipated.
We currently have more than 3,000 advisors accessing the Investing with Impact Platform.

FA: Why did Morgan Stanley create the platform and what kind of developments are in progress?

Irby: Over the last few years, we have increasingly heard from clients across the spectrum who have expressed an interest in considering the environmental and/or social elements of their investments, and we wanted to be able to work with them to deliver––in addition to a risk-adjusted, market-rate financial return––a positive environmental or social impact. So our goal with the platform was to pull together the different offerings that we thought could make sense for our clients in such a way that advisors and clients could navigate the available products to try to address or direct the specific impacts that they were interested in.

Our platform today includes all products that offer a risk-adjusted, market-rate return. We have tried to ensure that we’re offering products across a wide range of social and environmental impacts. That’s something that we’ll continue to work on both as we identify new products in the space and as new products become available. A lot of asset managers are increasingly focused on the “investing with impact” or sustainable investing space. We’re actively in dialogues with many of them around products that we think could attract significant investor interest.