Effective from January 2 2025, former Morgan Stanley CEO James Gorman will succeed Mark Parker as Chairman of The Walt Disney Company [NYSE:DIS].

Once he steps into the role finding the company's next CEO to learn from and takeover from Bob Iger, whose contract is set to end at the end of 2026, will be his ''critical priority''. This article looks to forecast what Gorman joining Disney means for their sustainability goals, looking at:

🗣️ Gorman's tenure at Morgan Stanley

📊 Disney's current ESG standing

🛠️ Areas Disney can look to improve

All ESG data referenced can be seen on and exported from the Integrum ESG Platform.

For any sustainable-minded investors, this new hire is positive news.

During his time at Morgan Stanley as CEO and most recently as Executive Chairman, James Gorman successfully manoeuvred the firm through the fallout of the 2008 financial crisis, the COVID-19 pandemic and even events like the Archegos Capital collapse.

He significantly expanding the firm's wealth and asset management business, and as he leaves the firm's stock price is just over 4x what it was when he joined.

Gorman has also made significant moves to position the firm as leaders in the sustainability space, including establishing the MS Institute for Sustainable Investing back in 2013.

Other laudable achievements include achieving carbon neutrality in 2022 across direct Scope 1 emissions, indirect Scope 2 from energy purchasing, and Scope 3 from business travel and owned assets that are leased.

The firm has also made considerable headway towards their goal of mobilising $1 trillion for sustainable solutions by 2030, with the current figure sitting at over £820 billion (including $640 billion mobilised towards low-carbon and green solutions).

James Gorman of course should not take all the plaudits - he has overseen this growth by building a team of individuals who are now considered leaders within the sustainability space, including Jessica Alsford (current CSO, having been Head of Sustainability Research since 2012) and Matthew Slovik (current Head of Global Sustainable Finance, joining from the integration team in 2010).

So what does this mean for Disney?

From an ESG perspective, we can forecast that the personnel Gorman brings in and the influence he has on the company's direction as a whole should only be positive.

Currently Disney score a 'B' on the Integrum ESG Platform, ranking 37th out of 383 companies in the 'Services' sector and 8th out of 62 companies in the 'Media & Entertainment' sub-sector.

There are certainly areas that can be improved under Gorman's watch, including:

◉ Competitive Behavior

Disney only scores a '1' for this metric - the company has a policy in place for anticompetitive practice (including price manipulation), but does not disclose breaches or penalties. They also do not disclose data on financial penalties due to anticompetitive business practices.

This is particularly relevant given Disney is frequently facing a number of anti-trust litigation cases, primarily regarding their popular streaming services. This includes the FuboTV antitrust case against the launch of Disney's new sports streaming service and a class action lawsuit brought by YouTube and DirecTV Stream subscribers amongst others.

◉ Climate Stability

Disney's is placed in the top quartile for their target setting and policies with regards to the company's greenhouse gas emissions, also disclosing a breakdown of all of their scope 1, 2 and 3 emissions (see page 65 of their 2023 Sustainability & Social Impact Report).

However, when looking at the actual numbers they disclose on their combined scope 1 & 2 GHG emissions (1720761 tCO₂e) the company falls into the bottom quartile of its peer group.

Gorman and the CEO he appoints will have a significant role to play in ensuring the company is aligned in achieving their 2030 environmental goals, including achieving net zero emissions for direct operations by 2030.

◉ Reputational Risk

Bob Iger's reign as CEO has been peppered with controversies; be that Elon Musk describing the company’s diversity programs as being “enforced by Disney’s DEI Gestapo”, or Iger's own response to the WGA & SAG-AFTRA strikes (calling the demands of these unions ''unrealistic'', ''disturbing'' and ''very disruptive'').

The new CEO should be one who can navigate the company to their long-term sustainable objectives while dealing with the barrage of scrutiny that a conglomerate and household name like Disney will face for doing so.

While there is certainly work to be done for Disney, by bringing in James Gorman investors and onlookers should be confident that a proven figurehead who cares about and understands sustainable growth is at the helm.

Eyes will now be on the choice of CEO.

𝗪𝗵𝗮𝘁 𝗱𝗼 𝘆𝗼𝘂 𝘁𝗵𝗶𝗻𝗸?

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