Morgan Stanley announced a new commitment to reach net-zero financed emissions by 2050. The firm joins many of its clients in this strategic goal and is committed to providing financing, expertise and thought leadership to support the transition to a low-carbon world.
“Climate change is one of the most complex and interconnected issues of our time,” said Audrey Choi, chief sustainability officer at Morgan Stanley. “Morgan Stanley believes we have an important role to play in facilitating the transition to a low-carbon future, and we are proud to embark on this journey.”
A critical challenge to achieving this goal is the lack of standardized tools and methodologies around measuring and disclosing financed emissions. Morgan Stanley is also committing to taking a leadership role in developing the tools and methodologies needed to measure and manage its carbon-related activities in appropriate ways. As part of that effort, the firm recently joined the Steering Committee of the Partnership for Carbon Accounting Financials (PCAF) and will seek to play a leadership role in capacity building. Once consistent, robust and comparable metrics and methodologies are available, the firm will set its initial financed emissions reduction targets while continuing to help find solutions for its clients.
“Morgan Stanley has been a leader in sustainable finance since we founded our Global Sustainable Finance Group over a decade ago,” said Matthew Slovik, head of global sustainable finance at Morgan Stanley. “This is the next major evolution of our efforts as we continue to integrate the potential risks and opportunities of climate change into our core business.”
As You Sow, a nonprofit organization that promotes environmental and social corporate responsibility through shareholder advocacy, coalition building and innovative legal strategies, raised the critical issue of measuring, disclosing and reducing financed emissions on behalf of investors in a shareholder resolution filed with Morgan Stanley and four other major banks last year. The group was able to withdraw the proposal after reaching an agreement in which the company agreed to assess methodologies for measuring its financed emissions with the aim of pursuing portfolio alignment with the Paris Agreement.
As You Sow reached similar agreements with Wells Fargo, Goldman Sachs, and Bank of America. Its 2020 shareholder resolution with JPMorgan Chase, asking the bank to measure, disclose, and reduce emissions aligned with Paris goals, received a near majority vote from investors. Thus far, Bank of America and Citigroup have joined Morgan Stanley in committing to measure and disclose financed emissions through PCAF.
Danielle Fugere, president of As You Sow, made the following statement:
“Once again demonstrating its leadership, Morgan Stanley is the first major U.S. bank to commit to reduce its financed greenhouse gas emissions to net zero, a commitment critical to achieving the global goal. Morgan Stanley’s announcement sends a signal across the economy that access to capital will increasingly be tied to a company’s ability to reduce its emissions at the rate and scope necessary to align with the Paris goal of limiting warming to 1.5℃ — Morgan Stanley’s announcement underscores the importance and feasibility of following disclosure commitments with concrete action. We hope to see JPMorgan Chase, Wells Fargo, Bank of America, and Citigroup make similar announcements in the near future.”
News item from Morgan Stanley