Morgan Stanley: Positioning to Be the Sustainability Finance Leader

by: Andrew Hoffman

Publication Date: February 19, 2014
Length: 16 pages
Product ID#: 1-429-376

Core Disciplines: Strategy & Management, Sustainability

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Teaching Note

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It is five years since the Great Recession, and Morgan Stanley and its competitors are still trying to regain the confidence of investors. To that end, James Gorman, Morgan Stanley CEO and chairman, has taken the bold step of creating an institute for sustainable investing, for which Morgan Stanley will provide the initial $1 billion of investment capital in hopes of raising 10 times that amount. The pledge is the largest to date from an impact fund — toping Goldman Sachs’ $250-million social impact fund as well as initiatives by UBS and JP Morgan & Chase. Students are tasked with assessing the plan’s rollout and comparing and contrasting Morgan Stanley’s strategy to that of its competitors. They are ultimately asked to answer the question of whether investment banking firms can drive sustainability in the marketplace.

Teaching Objectives

After reading and discussing the material, students should:

  • Understand how and when a business might seek to use sustainability to create comparative advantage in the marketplace.
  • Understand the role of the visionary leader and a non-traditional leader at effecting major strategic change.
  • Understand how finance, ever the great villain of capitalism, plays a critical role in the advancement of sustainability and creates supports for sustainable enterprise.
  • Understand the circumstances and actions that will make a foray into sustainability either credible or undermined by distrust.
  • Understand the role of leadership in effecting strategic change that may not initially appear to be core to the business.