SASB’s efforts intersect with those of other groups and Choi’s firm, she says. “What we’re doing at Morgan Stanley is saying, ‘How do those factors feed into investment judgment?’ ” she says. “We are really working on integrating sustainability into our core valuation of things.” In 2015, Morgan Stanley published a framework for incorporating ESG factors, such as water use by miners, into a stock’s valuation. The guide, which covers 30 sectors, was updated in March.
Demographic trends will only make questions about how resources are used more important over time. Choi points to estimates that the world’s population will increase to 9.7 billion by 2050 from 7.3 billion now. That underscores the need for efficiency in food, water, and energy use.
Smart long-term investors—whether they’re millennials or not—can take advantage of these trends, she says: “There are huge opportunities to invest in companies that are going to be the leaders in creating more sustainable agriculture, or water conservation, or more energy-efficient solutions.” Busso is an analyst on the Bloomberg rankings team in New York.
This article was provided by Bloomberg News.