Morgan Stanley’s Institute for Sustainable Investing issued a new report titled “Only Human” that looks at the behaviours that may act as roadblocks for making sustainable investment decisions.
Sustainable investing has become more popular as investors look for a way to do good, financially and socially. In fact, in one of the world’s largest CEO studies to date, 93% of CEOs polled regarded sustainability as “important” or “very important” to the success of their business.
Audrey Choi (pictured), CEO of the Morgan Stanley’s Institute for Sustainable Investing, said: “Behavioral economics research shows we’re more likely to respond to things that are immediate and dramatic, that are seen, felt, and experienced first-hand. And our investment choices are not immune. But the good news is that if we are aware of these biases we can address them, therefore helping to break down some of the mental blocks we as investors might have in considering sustainable investing strategies.”
It can be difficult to make that leap if you’re not sure where to start. Morgan Stanley’s new report shares some tips on how to get started, including:
– Take the time to carefully chart a course for an investment strategy alongside articulated impact goals.
– Try easing into a sustainable investment strategy by allocating only a percentage of total assets. Or alternatively, identify a particular issue on which to focus, like energy, sustainable agriculture, or gender issues.
– Be mindful of how emotions and near-term influences can affect decision-making, and maintain focus on the long-term goals.
Download the report here.