‘We had been working on sustainability for a long time’
Audrey Choi

Over the past few years, many banks have committed themselves to Corporate Social Responsibility, or CSR. While making a profit, they also claim to take social and environmental issues into account. Critics have argued that for a profit-oriented institution like a bank, CSR is just another name for charity, rather than a true shift in business models. We asked Audrey Choi, Chief Marketing Officer (CMO) and Chief Sustainability Officer (CSO) of Morgan Stanley – a multinational bank based in New York with over 55,000 employees – how sustainability and profit could go together.

Audrey Choi is both Chief Marketing Officer (CMO) and Chief Sustainability Officer (CSO) of Morgan Stanley. Prior to joining the US bank, she held senior policy positions in the Clinton Administration, serving as Chief of Staff of the Council of Economic Advisers and Domestic Policy Advisor to Vice President Al Gore. Previously, Choi was a  foreign correspondent and bureau chief for The Wall Street Journal. She is a graduate of Harvard College and Harvard Business School. Choi serves on the boards of several national non-profits focused on sustainability, community development and social justice.

Why are you both CMO and CSO?

Nowadays, marketing and sustainability are converging more than ever before. Clients and consumers are increasingly focused on the environment. They want to know what our impact is on society and how sustainable our business is. We had been working on sustainability for a long time, also before I took on the marketing role. For us, the convergence of those two worlds was really fortunate.

What’s an example of Morgan Stanley pursuing a sustainable policy?

We are committed to tackling the growing global challenge of plastic waste in the environment with our Plastic Waste Resolution. Through the capital market and partnering with our clients and employees, we will prevent, reduce and remove 50 million metric tons of plastic waste from rivers, oceans, landscapes and landfills by 2030.

Why would a firm like Morgan Stanley be interested in developing this Plastic Waste Resolution?

We didn’t have to get involved in the issue of plastic waste. We are not a big plastic producer or an inordinate user of it. However, the more we learned about the problem, we realised that this was an economy-wide issue, one which not one player on their own could really impact. As a financial services firm, however, Morgan Stanley is working with companies involved in all parts of the life cycle of plastic: the earliest stages of material engineering, industrial usage, consumer use, recycling and ultimate waste disposal. By collaborating with our clients – for example, large manufacturers, large users of plastic, or individuals and governments – we could help think about a better system to deal with plastic waste. However, we are not against plastic. Plastic has delivered many benefits, especially in the areas of healthcare or preventing food waste.
Furthermore, plastic is resilient, portable and lightweight. We are not trying to get rid of those benefits, but we do feel like we can do better than the current situation. After all, three quarters of the plastic that is made each year is not being reused, recycled or upcycled. Collectively we can offer better ways to be able to retain the beneficial qualities of plastic, while reducing the issues of these large and growing mountains of plastic waste. We now have more than 6 trillion tons of plastic waste. Much of that has only been used once, sometimes for a very short period of time. Often it is not properly managed, ending up in nature and ultimately also getting into the food and water supplies. Morgan Stanley felt that this plastic waste was an important issue that faced all of us as citizens. As a financial services corporation we can actually partner with all of the  different players that can be part of facilitating a change here.

And what about profitability?

One of the important things we have been working on is understanding how sustainability aligns with profitability. It is not a trade-off. If you want to be a prudent investor and a responsible businessperson, who wants a high growth, long-term financially sustainable company, then being environmentally and socially sustainable is part of that. The focus, therefore, is to ingrain these things in the business. In that sense, this is infused in everything we do. We can have much more impact in the world if we are really embedding sustainability into our research, into the capital market transactions we do, into our investment strategies.

Audrey Choi

Does that mean Morgan Stanley evaluates other forms of capital when making decisions?

Our research analysts are not just looking at traditional financial metrics, but also at environmental, social and governmental issues. We actually believe that this can help reduce risks and increase return. Our clients have invested USD 25 billion in our investment products, because they feel that our sustainable investment strategies align with their beliefs but will also be as profitable as traditional investments. We see that one of the biggest contributions we can make is helping identify where sustainability and profitability actually strengthen each other. I don’t think we are trying to recreate a new, different or expanded role for us as a bank. But we do believe that the role of banks can be instrumental in contributing to positive environmental and social change.

So you are trying to combine both profitability and sustainability?

Yes. Imagine you are a real estate investor: Over the next few decades, considering population growth projections, there is going to be a rapidly growing need for housing. However, housing is one of the biggest contributors to carbon emissions. So, if you can make that housing energy efficient, then it has an impact. The more you can do that, and do it profitably, the more units you can build and the more positive impact you deliver. For example, more affordable quality housing, or more affordable quality health care, or more financial empowerment providing social benefit.

Does this whole idea of banks doing environmental, social and governance work, or ESG, have anything to do with their bad reputation as a result of the financial crisis their risk-taking caused in 2008? Is it about business or PR?

That is not why we started it. We started the Global Sustainable Finance Group (GSF) in 2009. It wasn’t done as marketing. We really believed that there was a business case, and that we, as Morgan Stanley, had the ability to contribute to solving some of the biggest challenges that the world is facing. The truth is, philanthropy and government alone cannot solve these problems. They are incredibly important partners, but you have to have the private sector – and private investors – as part of this. We also thought
that we could figure out how to do it as a core part of the business, in a way that it also generates profit, so that it could be an ongoing sustainable effort. However, I think that, as a result of the financial crisis, the financial industry as a whole got a much deeper understanding of the need to think about all stakeholders, whether it be regulators, communities, clients or shareholders. Besides, I think that all of us, not just the financial services industry, broadly began to see more and more the interconnection between policy, community and business, and how much we have to think about that as some kind of collective endeavour.

In terms of ESG, how do you see the future of Morgan Stanley? Is this kind of investing sustainable from a business point of view?

We believe that sustainable investing is going to be an increasing part of our firm’s business. More and more investors want to have sustainability as part of their investment portfolios. They also are asking us to help them design products that focus on sustainability as a fundamental part of their investment strategies. I really think this is a fundamental trend that is here to stay. Sustainable investing will increasingly become synonymous with quality investing. It may not always be a separate thing. In fact, I think it will become part of mainstream investing. That is why we are so focused on building it as part of our business.

Modern clients want banks to think in terms of financial capital while factoring natural and social capital into business models and investment decisions.


Shareholders used to be driven by quick returns on their investment. They now demand meaningful social returns, in response to inequality and factors with negative impacts on the environment, health, and future prospects. Is it possible for legacy companies to shift to a purpose-driven approach?
“Absolutely,” says Stephan Chambers, director of the Marshall Institute for Philanthropy and Social Entrepreneurship at the London School of Economics. As long as the right leaders are in place and willing to make an intelligent transition, that is. First, companies need to understand what they care about most and clearly articulate their decisions around it. “Innovation is not just about technology or new products,” says Chambers. “It’s about people, it’s about culture, it’s about decision-making, it’s about diversity.”
Then, the company needs to anticipate how the harms it causes are going to get priced or penalized, and how the benefits that it generates will be rewarded. Finally, it has to
adjust its strategy accordingly. “Leaders who can’t anticipate shifts in a way that is productive rather than destructive,” Chambers says, “will see their capital transferred to rival firms who, instead, successfully shifted to purpose.” — Laurianne Crouteau