ESG exclusions no barrier to healthy returns, says MSIM’s Bruno Paulson


Morgan Stanley’s Global Sustain shows that even with a wide array of exclusions, an ESG fund can generate decent returns. Jan Wagner asks Global Sustain’s manager Bruno Paulson (pictured) how he achieved this and how the sustainable investment process at Morgan Stanley Investment Management works…

It’s generally assumed in asset management that if you limit your options, you could wind up sacrificing return. This makes intuitive sense and is why managers doing sustainable investing have tended to keep exclusions of sectors to a minimum and instead focus on promoting adherence to environmental, social and governance (ESG) criteria among the companies they buy. In the latter case, managers work with what they have – that is encourage adherence through engagement with investees as well as overweighting or underweighting them according to their ESG efforts.

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