Social Finance. Sustainability

Transcription

1 Social Finance 2013 Sustainability Environmental Finance Social Finance Community Development Philanthropy

2 Commitment to Sustainability Morgan Stanley is in a unique position to help address the most pressing challenges facing society today by harnessing the capital markets. We aim to facilitate the flow of capital between investors and businesses to help foster sustainable growth and opportunity. James P. Gorman Chairman and Chief Executive Officer We pursue sustainability at Morgan Stanley because it reflects our values, and we believe that it plays an increasingly important role in global finance. The implications of global population trends are striking, and they will require significant investment to ensure adequate food, water, shelter and energy for communities around the world. We focus on creating long-term value through our capital market activities investing in clean technologies, financing public infrastructure, lending to small businesses, building our Investing with Impact Platform and developing affordable housing. We believe we can integrate sustainability into the work we do by partnering with the millions of households we serve, as well as the governments and institutions for whom we advise, originate, trade, manage and distribute capital. This brochure highlights the activities that underscore our commitment to sustainability. It is also a testament to the dedication, skills and contributions of our 55,000 employees in 43 countries whose efforts are focused on addressing the needs of our many stakeholders. Our 2013 Sustainability Report details these activities.

3 Morgan Stanley Institute for Sustainable Investing We believe that capital markets can facilitate solutions to the most critical challenges to global prosperity and well-being. In 2013, we established the Morgan Stanley Institute for Sustainable Investing to help businesses, institutions and individuals direct capital to these challenges at the scale that is necessary to achieve lasting change. The Institute is focused on three pillars: Sustainable investing: developing and facilitating access to financial products and strategies that aim to deliver positive impact at scale Thought leadership: driving and contributing to thought leadership that will help mobilize capital to sustainable solutions Capacity building: expanding the field of sustainable investing and helping to develop its next generation of leaders The Institute for Sustainable Investing is guided by an advisory board that is chaired by Morgan Stanley Chairman and CEO James Gorman and comprises prominent leaders from business, academia and nongovernmental organizations. With the Institute for Sustainable Investing, we continue to integrate sustainability into the core of our business in the solutions we provide clients, the ways in which we deliver them and how we operate our business. 1

4 Environmental Finance We draw on our experience as intermediaries, investors and facilitators in the financial markets to promote a low-carbon economy, provide access to capital markets for innovative technologies and services, and contribute insight to the development of these new markets. Morgan Stanley s clean energy banking activities use many of the firm s key strengths, including investment banking, project finance, capital markets and commodity trading. We help clients and partners in the public, private and nonprofit sectors create capital market solutions to environmental challenges. Our global clean energy team advises across the spectrum of renewable energy, next-generation transportation and smart grid clients. In 2013, the team facilitated $9.5 billion of capital for clean energy businesses through IPOs, advisory services and other transactions. We are the lead issuer of green bonds, participating in new issues worth approximately $5 billion in We have also played an active role in the development of the Green Bond Principles that will help set industry standards as this market continues to grow. Through direct investments and community development programs, we support solar and wind installations, as well as initiatives that improve energy efficiency and reduce emissions in homes and communities. By integrating energy efficiency enhancements into affordable housing initiatives, we aim to reduce the operating costs of these homes and improve the quality of life in some of our most vulnerable communities. 2

5 MS Solar SolUTIONS CorP. Through its partnership with Main Street Power in 2013, MS Solar Solutions developed a project that enabled the Town of Scituate, Massachusetts, to become 100 percent powered by renewable energy. By combining the installation of more than 10,000 solar panels that can generate 3 megawatts of electricity with an existing wind turbine, Scituate can now meet all of its energy needs using renewable resources. powered by renewables

6 SoFi In 2013, Morgan Stanley underwrote the inaugural public securitization of post-graduate student loans for peer-to-peer lender SoFi, an alternative lender that aims to reduce student loan costs, making higher education more affordable for low-risk borrowers. SoFi has funded $450 million in loans to students and graduates from more than 100 universities. $ 450 sofi has funded MIllIOn in loans

7 Public Finance Municipal, educational and cultural institutions such as hospitals, universities, museums and utilities rely upon the capital markets as a means to providing their critical services. With state and local government budgets under continual pressure, and the need to minimize the burden on taxpayers, public debt offerings raise essential funds for public projects efficiently. They also enable institutions, such as universities, hospitals and cultural organizations, to fund expansion or restructuring, so that they can meet the changing needs of their constituents for years to come. Morgan Stanley s expertise in public finance and the firm s far-reaching retail network led to the raising of nearly $18 billion in 144 financings in The retail market was particularly important in providing liquidity in 2013, when interest rates were volatile, and a number of bond issues were structured to appeal to retail investors. In turn, clients as diverse as National Public Radio and Sutter Health were able to strengthen their financial positions, while the State of Hawaii Department of Transportation was able to launch an environmental efficiency program at 12 airports that is expected to cut energy costs by approximately 49 percent and save more than $500 million over the 20-year life of the project. Our work with Rutgers University to restructure the University of Medicine and Dentistry of New Jersey, in what is known to be the nation s largest higher education reorganization, won The Bond Buyer s 2013 Deal of the Year in the health care sector. As a result, institutions and municipalities improved their cash flows and funded projects that will lead to healthier, more vibrant communities. 5

8 Social Finance We aim to use capital market solutions to support innovative enterprises that address the needs of underserved communities globally. Whether through microfinance activities in Latin America or new products for the financially underserved in the United States, we provide expertise and access to capital to help build and strengthen these important efforts. By working closely with investors, intermediaries and partners, we facilitate the flow of capital to microfinance institutions. Since 2006, we have participated in more than $875 million in microfinance transactions through direct financing and advisory services. These activities increase opportunities for disadvantaged communities and help generate financial and social returns. In 2013, Morgan Stanley led a $54 million investment in Janalakshmi Financial Services, a technology-focused microfinance institution based in Bangalore, India, that provides microloans to the financially underserved urban market. We partner with organizations, including Accion East and Neighborhood Trust Financial Partners, to tackle the lack of access to traditional financial services that impacts more than a quarter of United States households. Our multifaceted approach comprises grants, investments and advisory services to address this significant market. We also support research and knowledge-building activities to increase understanding of the opportunities available in social finance. Working with the Center for Financial Services Innovation, a leading authority on consumer financial health, and Core Innovation Capital, we are using research and publications to draw attention to the size of the financially underserved market opportunity, as well as to the growing use of technology innovation to help create high-quality products that reach these consumers. 6

9 Financially underserved MarkET Study The third annual Financially Underserved Market Size Study by the Center for Financial Services Innovation and Core Innovation Capital, conducted with Morgan Stanley s strategic input and support, estimates that the underserved market grew 8 percent between 2011 and 2012, to $89 billion in interest and fees. This report on the United States market highlights a significant opportunity for those seeking to develop high-quality, affordable products to meet the needs of underserved consumers. 8 %

10 Project Renewal Morgan Stanley has partnered with Project Renewal, an organization that aims to break the cycle of homelessness with comprehensive services health care, housing and job training. health care housing job TRaining Morgan Stanley supports Project Renewal with grants, and three of our colleagues serve on its board of trustees. We also have hired its social enterprise, Comfort Foods Catering, which provides job training through an award-winning program, for client events.

11 Community Development We believe that innovative, cross-sector solutions deliver the impact and generate the momentum needed to drive lasting, sustainable change in our communities. Vibrant communities need high-quality affordable housing, secure jobs, strong schools and access to health care and healthy foods. We apply our skills, product offerings and business acumen to create economic opportunities for people with low and moderate incomes. Since 2010, we have dedicated more than $7 billion to community development initiatives such as affordable housing and small business financing. These funds have led to the development of more than 44,000 affordable housing units and the creation or retention of more than 46,000 jobs. To ensure that we continue to innovate and execute the complex transactions that meet the multidimensional, changing needs of our communities, we work alongside industry experts, community advisors and philanthropies across the United States to drive our initiatives. We also have committed to a $1 billion initiative, investing in sustainable communities to provide expertise and rapid access to capital to preserve and enhance quality affordable housing that is at risk of deteriorating into uninhabitable conditions. The initiative will also seek to drive the integration of affordable housing with access to health care, healthy foods and other vital services. 9

12 Our People Our success depends on the diverse talents of 55,000 employees across 43 countries who share a commitment to excellence, contribute to a collegial and respectful culture, and base decisions on our values. In 2013, we focused on the vital role that our employees play by investing in their professional development, wellness and engagement with the firm. From opening a state-of-the-art 23,000-square-foot wellness center in our headquarters to launching a global campaign featuring technology and communication tools, we offer resources that help improve our employees professional and personal lives. At the wellness center s unveiling, CEO James Gorman reaffirmed Morgan Stanley s commitment, stating that the facility represents an investment in the well-being of our people, which, in my view, is one of the most important investments we can ever make. We also enhanced the diversity of our workforce, raising the bar for ourselves and our industry. For the first time, 27 percent of our Managing Director promotions were women. Our new Return to Work program helped experienced professionals who took a career break re-enter the workforce. In 2013, the firm advocated for marriage equality in the United States as the only major financial services firm to sign two Supreme Court amicus briefs supporting gay marriage. We develop our employees informally on the job every day, as well as more formally through structured firmwide initiatives. We host several leadership programs, including the Morgan Stanley Leaders Program, the Executive Director Development Series and new-officer events. In addition, this year our CEO led a Managing Directors Women s Symposium in our New York and London offices. 10

13 EMPloyEE highlights In 2013, 27% of our Managing Director promotions were women. 27% up from 17 % in % of employees feel their jobs make good use of their skills, according to the 2014 Morgan Stanley Employee Survey.

14 EmployEES increase IMPACT IN 2013 Our Strategy Challenge delivered 10,000 hours of pro bono advice to 12 nonprofit partners, valued at $1.5 million. More than 24,000 Morgan Stanley employees volunteered 440,000 hours. We donated $ 91 MIllion A 10-percent increase from This number included a record-breaking $40 million from employees.

15 Philanthropy At Morgan Stanley, we seek to combine our talent, business acumen and charitable resources to create meaningful, scalable and long-lasting impact for our communities. Morgan Stanley has supported local communities for more than 50 years through the volunteer efforts of our employees, as well as the contributions of the Morgan Stanley Foundation and the Morgan Stanley International Foundation. Our work is anchored in the belief that giving children a healthy start is central to building strong communities. We seek for our activities to be both international in scale and local in implementation. The Global Alliance for Children s Health is an example of our multidimensional and long-term approach to problem solving and scaling solutions. It combines financial support, strategic thinking and employee engagement from Morgan Stanley with the expertise of leading community-based partners, to give children the healthy start they need for lifelong achievement. Morgan Stanley s employee community engagement program was recognized in The Civic 50 by Bloomberg Businessweek and Points of Light in Our multifaceted program taps the talents of our people to create lasting social impact and inspire a lifetime of volunteering. We offer a continuum of opportunities, ranging from giving and one-time service projects to long-term pro bono and leadership programs. We provide training, recognition and funding to support our employees, increasing their impact and involvement. The Morgan Stanley Strategy Challenge is our signature pro bono program, mobilizing employee teams to provide strategic advice to nonprofit partners. Since 2009, it has delivered more than 32,500 hours, valued at $4.9 million, according to Taproot Foundation standards, to 61 nonprofit organizations, helping them improve productivity, create new revenue streams and implement more efficient business models. 13

16 Operations We endeavor to reduce our environmental footprint and enhance sustainability across all aspects of our operations. Our high environmental standards and guiding policies are the basis for how we manage our offices and interact with suppliers. We aim to improve energy efficiency, water use and waste management with initiatives that contribute to a positive work environment for employees. We also work to improve the environmental performance of the products and services we purchase from suppliers. In addition, through education, outreach and competitive bidding processes, we seek to enhance supplier diversity. We have increased the amount spent with diverse suppliers more than 20 percent each of the last three years. In 2013, we set new targets for our carbon emissions and other environment-related measures. We intend to reduce carbon emissions 15 percent per square foot of office space by 2017, from a 2012 baseline. When achieved, this will be a 37-percent reduction from We achieve our targets through a broad retro-commissioning program and the guidance of external certifications. We have received 24 LEED certifications at our offices globally including our New York headquarters which received LEED Gold certification in We also completed the installation of a large solar photovoltaic array at our Westchester campus in Purchase, New York. It will produce approximately 5 percent of the building s annual electricity usage and could meet up to 25 percent of demand during peak operation. Morgan Stanley was an early signatory to the Carbon Disclosure Project (CDP) and again in 2013 was included in CDP s S&P 500 Carbon Disclosure Leadership Index (CDLI) and Global 500 Carbon Performance Leadership Index (CPLI). 14

17 SUPPlier diversity At Morgan Stanley, we believe that equal access and opportunity, and diversity in our business processes, strengthen our firm. Through our Supplier Diversity Program, we spent MIllion $ with diverse suppliers in 2013, % MORe than in 2012.

18 2013 Report Card Public finance Morgan Stanley led the negotiated sale of 144 financings valued at nearly $18 Billion Environment operations We have received 24LEED certifications at our offices globally 16 EnviroNMENTal finance Intermediated $9.5 billion in securities in the clean-tech sector Transactions receiving environmental Total Global Office Emissions (tco 2 e) and social risk review 6% Asia , , , Participated in approximately $5 billion in green bonds SoCIal finance Since 2006, participated in more than $875 million of microfinance transactions Morgan Stanley Social Finance Transactions % Africa & Eastern Europe 19% United States 64% Latin America 64 % 6 % 11 % 19 %

19 CoMMUNITy development SUPPliers $ Spent 245 Million with diverse Tier 1 and Tier 2 suppliers, a 24% increase over 2012 AWARDS & RECogNITION The Civic 50 Morgan Stanley was recognized as the top community-minded company for its size and industry in The Civic 50, an annual assessment by Bloomberg Businessweek and Points of Light Philanthropy Morgan Stanley and its employees together contributed more than $91 Million to charities globally More than 24,000 employees volunteered 440,000 hours in 500 cities and 24 countries Morgan Stanley Foundation and Morgan Stanley international Foundation 2013 Giving by Category Since 2010, invested more than $7 billion to fund the preservation and construction of more than 44,000 Units of affordable housing, creating more than 46,000 jobs CDP Global 500 Carbon Performance Leadership Index S&P 500 Carbon Performance Leadership Index S&P 500 Carbon Disclosure Leadership Index 7% Scholarship Initiatives 8% Disaster Relief 26% Volunteer Incentive Program 59% Children s Health 7 % 8 % 59 % 26 % 17

20 For more information: Morgan Stanley & Co. LLC. Member SIPC PS-299 GSF CS /14