Awards for Excellence 2014: Best bank for corporate social responsibility

Best bank for corporate social responsibility:

Morgan Stanley

Gone are the days when corporate social responsibility meant charity cake sales and a collection tin at reception. Firms everywhere are investing time, energy and serious money into schemes that will better society. But of course they aren’t always doing so without thinking about the business reasons behind such investments. If there is money to be made while also helping clients to make more ethical and environmentally friendly choices, then all the better.

The pure philanthropic efforts by all the banks that sent in submissions for this new category in the Euromoney Awards for excellence certainly deserve praise of the highest order. Hundreds of millions of dollars are given away every year to worthy causes, helping those in need all around the world. And it goes far beyond writing cheques. Banks are sharing their knowledge and skills like never before; mentoring schemes and business plan assistance for charities peppered the documents sent in to back each bank’s submission.

Of note are the financial education and ‘returning talent’ efforts by Bank of America Merrill Lynch; the support for families and small businesses afforded by loans from MicroBank, set up by CaixaBank; and the 2013 push by UBS to urge wealth management clients to use their investments and resources to address societal concerns.

But it was Morgan Stanley’s commitment from the very highest levels of management to the 24,000 employees that volunteered for various schemes in 2013 that won the bank this inaugural award.

The creation of the Morgan Stanley Institute for Sustainable Investing in November 2013 epitomises the dedication. The institute was founded with the goal of mobilising capital to global sustainability challenges on a large scale – drawing upon Morgan Stanley’s capabilities as a company that advises, originates, trades, manages and distributes capital.

As chief executive James Gorman said when announcing the institute: “Morgan Stanley is in a unique position to harness the capital markets to help address the most pressing challenges facing society today, connecting governments, investors and businesses with the capital to execute at scale. Our philosophy is clear: the most effective solutions to sustainability challenges are those that can be brought to scale. Our clients are increasingly turning their attention to what it takes to secure the lasting and safe supplies of food, energy, water and shelter necessary for sustainable prosperity.”

The institute will focus its efforts on three activities in response to clients’ growing concern about varied issues such as climate change, resource scarcity, economic opportunity and gender equality.

First, the development of financial products and strategies that seek to deliver positive social or environmental impacts as well as market-rate, risk-adjusted financial returns; second, thought leadership and engaging in dialogues that spotlight ways for capital to achieve positive impact; and third, the bank will sponsor initiatives that cultivate emerging leaders working at the intersection of finance and sustainability.

The aim is to be in a class of one; we want to be a leader in sustainable investing Audrey Choi

The institute works with organizations and leaders across business, academia and government.

“The aim is to be in a class of one; we want to be the leader in sustainable investing,” says Audrey Choi, the institute’s chief executive. “The most exciting part of the institute is that it crystallises what we have always aimed to do as an institution. We concluded that we have a very powerful ability to contribute to some of the causes we care about the most if we are really leveraging every part of our business.”

But the institute is far from the only string to Morgan Stanley’s CSR bow. The firm has taken a leading role in many of the watershed moments in this rapidly developing market, including being involved in the first billion-dollar green bond deal. Morgan Stanley was also part of the working group that produced the draft principles for green bonds published earlier this year.

“We brought everything we’d learned in the process of our deals – such as the EdF green bond issuance – to this project,” says Navindu Katugampola, executive director and head of Morgan Stanley’s green bonds issuance practice. “Clearly defined best-practice guidelines can be very helpful. We would rather have a small share of a large market than have a monopoly over a smaller market. There is no point in us keeping all the information we’ve learned to ourselves.”

On the philanthropic side of CSR at Morgan Stanley, the bank’s foundation has been operational for over 50 years in the US, with a focus on supporting efforts to improve children’s health dating back 40 years.

Last year more than 24,000 employees volunteered 440,000 hours of their time to worthy causes, while donations to non-profit groups reached $91 million.

The Morgan Stanley Strategy Challenge is the bank’s annual pro-bono programme, which involves teams of employees providing strategic advice to non-profit partners. In 2013, teams delivered 10,000 hours of service. The recommendations and strategies help non-profits achieve productivity improvements, create new revenue streams and implement more efficient business models.