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Taking a systems approach to sustainability

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Taking a systems approach to sustainability


These days we are all striving for connections. In families, between generations, in neighborhoods, and even among co-workers. We rely on it for learning, for trading, for economic growth, for innovation and for global change.

Audrey Choi is the Chief Sustainability Officer and Chief Marketing Officer at Morgan Stanley.

If we didn’t know it before, we certainly realize it now: our connectedness—the ways we are knit together—holds both benefits and risks for our health, our economies, our communities, and our planet.

That’s the essence of sustainability, really. It’s not just an environmental issue but also a fundamental economic issue. And it’s not just a health issue but also a moral imperative. The size and complexity of the challenges we face require creative, systems-level thinking.

No one acting alone—no country, no sector, no scientist, no corporation—will effect meaningful change. Solving the world’s biggest sustainability challenges will require a new kind of innovation, one that leverages insights and expertise from across a broad spectrum of sectors and industries.

Tackling plastic waste

Take the plastic waste problem. Every year, $80 to $120 billion dollars of economic value is thrown away in the form of single-use plastic packaging.(i) Every minute the equivalent of a garbage truck’s worth of plastic waste is dumped into the ocean,(ii) and according to University of Georgia environmental engineering professor Jenna Jambeck, at the current rate, by 2030 it will be a football stadium’s worth of plastic waste being dumped into our oceans every day.(iii)

Stemming the tide of plastic waste will require innovation across the entire plastics value chain – from how it is formulated in the lab, designed into products, used by consumers, and ultimately collected, recycled, and disposed of.

Two years ago, Morgan Stanley launched its Plastic Waste Resolution,(iv) not because we produce or use a lot of plastic, but because as a global financial firm we are connected to the investors, the corporations, the governments, the innovators, and the nonprofits that can make a difference. If we all work together.

The resolution is very straightforward: as a firm, we committed to facilitating the prevention, reduction, and removal of 50 million metric tons of plastic waste from nature by 2030. As part of that, we’re underwriting the Debris Tracker app,(v) which supports citizen science by empowering individuals to collect and report data litter so scientists and researchers can better understand the causes of plastic waste in coastlines and waterways.

Our social compact

Of course, sustainability is bigger and broader than plastic pollution, and “environment” is just one leg of the environmental, social, and corporate governance (ESG) stool. The last year, in fact, has brought renewed attention to the full spectrum of sustainability, and again, innovation and partnership were key to the response.

A relatively new product, “social bonds” are now helping foundations and other nonprofits fund the critical work of renewing communities, battling racial injustice, and securing a more equal future for all people. Last year, for example, Morgan Stanley partnered with the Ford Foundation to underwrite a first of its kind $1 billion social bond,(vi) which allowed the foundation to increase grant making to nonprofits during the pandemic and ensure the continuity of organizations fighting for equality and supporting vulnerable communities. And later in the year we raised our own $1 billion with a social bond that allocated capital in equal amounts to the financing and refinancing of affordable housing projects for low- or moderate-income individuals and families across the US.(vii)

That broad understanding—that sustainability takes integrated, innovative approaches to achieve—sits at the core of Morgan Stanley’s Global Sustainable Finance Group. We started it more than a decade ago with the express purpose of partnering with teams across our businesses to implement sustainable solutions and integrate sustainability into our products and services. It is also why as a firm, in September, building on our announced goal to be carbon-neutral by 2022,(viii) we became the first major US bank to pledge to reach net-zero financed emissions by 2050.(ix)

What seemed like a novelty to some back then has become core to many investor portfolios and corporate risk statements. Sustainable investing accounts for $1 out of every $3 under professional management in the US,(x) and is now a more-than $30 trillion market globally.(xi) In a recent survey, a remarkable 85% of US individual investors express interest in sustainable investing strategies,(xii) and we think the investment, the innovation and the commitment will only grow.

Real efforts are underway at our firm and across many sectors to develop, launch, and scale real sustainability efforts that together will make a difference for us and future generations. That’s good news, because our most pressing complex ESG problems will not be solved in silos.


(i) MacArthur, D. E., D. Waughray, and M. R. Stuchtey. “The New Plastics Economy, Rethinking the Future of Plastics.” World Economic Forum. 2016, https://www.ellenmacarthurfoundation.org/publications/the-new-plastics-economy-rethinking-the-future-of-plastics

(ii) Pennington, James. “Every minute, one garbage truck of plastic is dumped into our oceans. This has to stop.” World Economic Forum. 2016, https://www.weforum.org/agenda/2016/10/every-minute-one-garbage-truck-of-plastic-is-dumped-into-our-oceans/

(iii) Parker, Laura. “Plastic pollution is a huge problem—and it’s not too late to fix it,” National Geographic, October 6, 2020, https://www.nationalgeographic.com/science/article/plastic-pollution-huge-problem-not-too-late-to-fix-it

(iv) https://www.morganstanley.com/Themes/plastic-pollution-resolution

(v) https://www.nationalgeographic.org/education/programs/debris-tracker/

(vi) https://www.fordfoundation.org/the-latest/news/ford-foundation-takes-historic-unprecedented-action-to-increase-grantmaking-for-nonprofits-by-1-billion-with-proceeds-of-offering-of-social-bonds-in-response-to-covid-19/

(vii) https://www.businesswire.com/news/home/20201021005884/en/Morgan-Stanley-Continues-Commitment-to-Sustainable-Investing-with-Social-Bond-to-Support-Affordable-Housing

(viii) https://www.morganstanley.com/articles/carbon-neutral-by-2022

(ix) https://www.morganstanley.com/press-releases/morgan-stanley-announces-commitment-to-reach-net-zero-financed-e

(x) Nason, Deborah. “’Sustainable investing’ is surging, accounting for 33% of total U.S. assets under management,” December 21, 2020, https://www.cnbc.com/2020/12/21/sustainable-investing-accounts-for-33percent-of-total-us-assets-under-management.html

(xi) Chasan, Emily, “Global Sustainable Investments Rise 34 Percent to $30.7 Trillion,” Bloomberg, April 1, 2019, https://www.bloomberg.com/news/articles/2019-04-01/global-sustainable-investments-rise-34-percent-to-30-7-trillion

(xii) https://www.morganstanley.com/pub/content/dam/msdotcom/infographics/sustainable-investing/Sustainable_Signals_Individual_Investor_White_Paper_Final.pdf

DISCLOSURES – required

This material was published on April 6, 2021. All information in this material has been prepared by Morgan Stanley Smith Barney LLC and/or Morgan Stanley & Co. LLC, Members SIPC (collectively “Morgan Stanley”) for informational purposes only and is not a solicitation of any offer to buy or sell any security or other financial instrument or to participate in any trading strategy. This material was not prepared by the Morgan Stanley Research Department and is not a Research Report as defined under FINRA regulations. This material does not provide individually tailored investment advice. It has been prepared without regard to the individual financial circumstances and objectives of persons who receive it. Morgan Stanley recommends that recipients should determine, in consultation with their own investment, legal, tax, regulatory and accounting advisors, the economic risks and merits, as well as the legal, tax, regulatory and accounting characteristics and consequences, of any transaction or strategy referenced in any materials. The appropriateness of a particular investment or strategy will depend on an investor’s individual circumstances and objectives.  Morgan Stanley, its affiliates and Morgan Stanley Financial Advisors do not provide tax, accounting or legal advice. Individuals should consult their tax advisor for matters involving taxation and tax planning and their attorney for matters involving legal matters.

This material contains forward-looking statements and there can be no guarantee that they will come to pass.  You are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date on which they are made. We undertake no obligation to update publicly or revise any forward-looking statements to reflect the impact of circumstances or events that arise after the dates they are made, whether as a result of new information, future events or otherwise except as required by applicable law. You should, however, consult further disclosures we may make in future filings of our annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K and any amendments thereto or in future press releases or other public statements.

Past performance is not a guarantee of future performance. Information contained herein is based on data from multiple sources and Morgan Stanley makes no representation as to the accuracy or completeness of data from sources outside of Morgan Stanley. References to third parties contained herein should not be considered a solicitation on behalf of or an endorsement of those entities by Morgan Stanley.

Please note that there is currently no legal, regulatory or similar definition of what constitutes a “social” bond or as to what precise attributes are required for a particular issuance to be defined as “social.” Without limiting any of the statements contained herein, Morgan Stanley makes no representation or warranty as to whether a bond constitutes a social bond, unless otherwise specified by Morgan Stanley, or whether a bond conforms to investor expectations or objectives for investing in social bonds. For information on characteristics of a specific social bond, use of proceeds, a description of applicable projects and/or any other relevant information about the bond, please reference the offering documents for the bond.


The returns on a portfolio consisting primarily of Environmental, Social and Governance (“ESG”) aware investments may be lower or higher than a portfolio that is more diversified or where decisions are based solely on investment considerations. Because ESG criteria exclude some investments, investors may not be able to take advantage of the same opportunities or market trends as investors that do not use such criteria.

Information contained in the material is based on data from multiple sources and Morgan Stanley makes no representation as to the accuracy or completeness of data from sources outside of  Morgan Stanley. References to third parties contained herein should not be considered a solicitation on behalf of or an endorsement of those entities by Morgan Stanley. Morgan Stanley is not responsible for the information contained on any third party web site or your use of or inability to use such site, nor do we guarantee its accuracy or completeness. The terms, conditions, and privacy policy of any third party web site may be different from those applicable to your use of any Morgan Stanley web site. The opinions expressed by the author of an article written by a third party are solely his/her own and do not necessarily reflect those of Morgan Stanley. Professional designations mentioned in the articles may or may not be approved for use at Morgan Stanley. The information and data provided by any third party web site or publication is as of the date of the article when it was written and is subject to change without notice.

© 2021 Morgan Stanley & Co. LLC and Morgan Stanley Smith Barney LLC.  Members SIPC.  CRC 3514255 4/2021

This content was produced by Morgan Stanley. It was not written by MIT Technology Review’s editorial staff.

Tech

Investing in women pays off

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Investing in women pays off


“Starting a business is a privilege,” says Burton O’Toole, who worked at various startups before launching and later selling AdMass, her own marketing technology company. The company gave her access to the HearstLab program in 2016, but she soon discovered that she preferred the investment aspect and became a vice president at HearstLab a year later. “To empower some of the smartest women to do what they love is great,” she says. But in addition to rooting for women, Burton O’Toole loves the work because it’s a great market opportunity. 

“Research shows female-led teams see two and a half times higher returns compared to male-led teams,” she says, adding that women and people of color tend to build more diverse teams and therefore benefit from varied viewpoints and perspectives. She also explains that companies with women on their founding teams are likely to get acquired or go public sooner. “Despite results like this, just 2.3% of venture capital funding goes to teams founded by women. It’s still amazing to me that more investors aren’t taking this data more seriously,” she says. 

Burton O’Toole—who earned a BS from Duke in 2007 before getting an MS and PhD from MIT, all in mechanical engineering—has been a “data nerd” since she can remember. In high school she wanted to become an actuary. “Ten years ago, I never could have imagined this work; I like the idea of doing something in 10 more years I couldn’t imagine now,” she says. 

When starting a business, Burton O’Toole says, “women tend to want all their ducks in a row before they act. They say, ‘I’ll do it when I get this promotion, have enough money, finish this project.’ But there’s only one good way. Make the jump.”

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Preparing for disasters, before it’s too late

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Preparing for disasters, before it’s too late


All too often, the work of developing global disaster and climate resiliency happens when disaster—such as a hurricane, earthquake, or tsunami—has already ravaged entire cities and torn communities apart. But Elizabeth Petheo, MBA ’14, says that recently her work has been focused on preparedness. 

It’s hard to get attention for preparedness efforts, explains Petheo, a principal at Miyamoto International, an engineering and disaster risk reduction consulting firm. “You can always get a lot of attention when there’s a disaster event, but at that point it’s too late,” she adds. 

Petheo leads the firm’s projects and partnerships in the Asia-Pacific region and advises globally on international development and humanitarian assistance. She also works on preparedness in the Asia-Pacific region with the United States Agency for International Development. 

“We’re doing programming on the engagement of the private sector in disaster risk management in Indonesia, which is a very disaster-prone country,” she says. “Smaller and medium-sized businesses are important contributors to job creation and economic development. When they go down, the impact on lives, livelihoods, and the community’s ability to respond and recover effectively is extreme. We work to strengthen their own understanding of their risk and that of their surrounding community, lead them through an action-planning process to build resilience, and link that with larger policy initiatives at the national level.”

Petheo came to MIT with international leadership experience, having managed high-profile global development and risk mitigation initiatives at the World Bank in Washington, DC, as well as with US government agencies and international organizations leading major global humanitarian responses and teams in Sri Lanka and Haiti. But she says her time at Sloan helped her become prepared for this next phase in her career. “Sloan was the experience that put all the pieces together,” she says.

Petheo has maintained strong connections with MIT. In 2018, she received the Margaret L.A. MacVicar ’65, ScD ’67, Award in recognition of her role starting and leading the MIT Sloan Club in Washington, DC, and her work as an inaugural member of the Graduate Alumni Council (GAC). She is also a member of the Friends of the MIT Priscilla King Gray Public Service Center.

“I believe deeply in the power and impact of the Institute’s work and people,” she says. “The moment I graduated, my thought process was, ‘How can I give back, and how can I continue to strengthen the experience of those who will come after me?’”

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The Download: a curb on climate action, and post-Roe period tracking

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The US Supreme Court just gutted the EPA’s power to regulate emissions


Why’s it so controversial?: Geoengineering was long a taboo topic among scientists, and some argue it should remain one. There are questions about its potential environmental side effects, and concerns that the impacts will be felt unevenly across the globe. Some feel it’s too dangerous to ever try or even to investigate, arguing that just talking about the possibility could weaken the need to address the underlying causes of climate change.

But it’s going ahead?: Despite the concerns, as the threat of climate change grows and major nations fail to make rapid progress on emissions, growing numbers of experts are seriously exploring the potential effects of these approaches. Read the full story.

—James Temple

The must-reads

I’ve combed the internet to find you today’s most fun/important/scary/fascinating stories about technology.

1 The belief that AI is alive refuses to die
People want to believe the models are sentient, even when their creators deny it. (Reuters)
+ It’s unsurprising wild religious beliefs find a home in Silicon Valley. (Vox)
+ AI systems are being trained twice as quickly as they were just last year. (Spectrum IEEE)

2 The FBI added the missing cryptoqueen to its most-wanted list
It’s offering a $100,000 reward for information leading to Ruja Ignatova, whose crypto scheme defrauded victims out of more than $4 billion. (BBC)
+ A new documentary on the crypto Ponzi scheme is in the works. (Variety)

3 Social media platforms turn a blind eye to dodgy telehealth ads
Which has played a part in the prescription drugs abuse boom. (Protocol)
+ The doctor will Zoom you now. (MIT Technology Review)

4 We’re addicted to China’s lithium batteries
Which isn’t great news for other countries building electric cars. (Wired $)
+ This battery uses a new anode that lasts 20 times longer than lithium. (Spectrum IEEE)
+ Quantum batteries could, in theory, allow us to drive a million miles between charges. (The Next Web)

5 Far-right extremists are communicating over radio to avoid detection
Making it harder to monitor them and their violent activities. (Slate $)
+ Many of the rioters who stormed the Capitol were carrying radio equipment. (The Guardian)

6 Bro culture has no place in space 🚀
So says NASA’s former deputy administrator, who’s sick and tired of misogyny in the sector. (CNN)

7 A US crypto exchange is gaining traction in Venezuela
It’s helping its growing community battle hyperinflation, but isn’t as decentralized as they believe it to be. (Rest of World)
+ The vast majority of NFT players won’t be around in a decade. (Vox)
+ Exchange Coinbase is working with ICE to track and identify crypto users. (The Intercept)
+ If RadioShack’s edgy tweets shock you, don’t forget it’s a crypto firm now. (NY Mag)

8 It’s time we learned to love our swamps
Draining them prevents them from absorbing CO2 and filtering out our waste. (New Yorker $)
+ The architect making friends with flooding. (MIT Technology Review) 

9 Robots love drawing too 🖍️
Though I’ll bet they don’t get as frustrated as we do when they mess up. (Input)

10 The risky world of teenage brains
Making potentially dangerous decisions is an important part of adolescence, and our brains reflect that. (Knowable Magazine)

Quote of the day

“They shamelessly celebrate an all-inclusive pool party while we can’t even pay our rent!”

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