MSIM’s head of international equity, William Lock, said the best way to compound shareholders’ wealth over the long term was by owning very high quality companies with sustainable high returns on operating capital.
“Focusing on ESG [environmental, social, and governance] factors is crucial, as material social and environmental risks to the sustainability of high returns are more important than ever, given political and technological change,” he said.
“Equally, we recognise that leading the way on such issues can be a positive force for corporate success if it drives consumer and/or employee engagement.”
In June, MSIM launched a sustainable equity Ucits that invests in global equities with a low carbon impact.
The firm said the Luxembourg-domiciled Global Sustain Fund had explicit restrictions against investments in companies that have their core business in tobacco, alcohol, adult entertainment, bulk commodities, fossil fuels, or any security excluded by the MSCI World ex Controversial Weapons Index.