Morgan Stanley's acquisition gives it access to a shining jewel in Eaton Vance Corp.'s crown: responsible investment manager Calvert Research and Management.
Calvert is a leading franchise within the money management industry, said Stephen Tu, New York-based based vice president and senior credit officer in Moody's Investors Service Inc.'s financial institutions group. "We would think (Morgan Stanley) will probably try to keep that intact as much as possible and help it along, use resources at Morgan Stanley to make it better and stronger," he said.
Morgan Stanley Investment Management Inc. integrates ESG into investments and has its Morgan Stanley Institute for Sustainable Investing, but Calvert runs about $25 billion in dedicated responsible investing assets.
While other large investment managers are slowly dipping a toe into strong environmental and social investing, "Morgan Stanley just dove into the deep end of the pool," said Elizabeth Saunders, Chicago-based partner at investor relations and communications firm Clermont Partners and founder of Clermont's virtual ESG counsel platform ESG Infinite.
Morgan Stanley in September committed to net-zero carbon emissions in its financing activities by 2050 and supports the United Nation's sustainable development goals.
In Calvert, "Morgan Stanley will be acquiring a framework, discipline and a model to invest in a sustainable and more socially acceptable manner," Ms. Saunders said. "It will give them an immediate runway to meet its UN SDG commitment, enter into the huge demand for ESG-friendly funds and offers great timing to attract new assets looking to invest sustainably."
She added that Morgan Stanley historically has voted with management "more than 95% of the time on shareholder proposals," while Calvert "has a strong history of voting against management, especially when it has a soft approach to climate change. Calvert was responsible for this area of proxy voting while under Eaton Vance, so it is safe to assume they will play a large role at Morgan Stanley as well. We anticipate that support level to shift downward shortly after the acquisition closes," Ms. Saunders said.