Morgan Stanley Announces 2030 Targets for Net-Zero Financed Emissions Commitment

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11/03/2021 - 11:00 AM

2030 targets announcement follows Morgan Stanley’s commitment to net-zero financed emissions by 2050, the first among large U.S. banks
Progress builds on Firm’s leadership in the Partnership for Carbon Accounting Financials (PCAF) and the Net-Zero Banking Alliance (NZBA)

NEW YORK--(BUSINESS WIRE)-- Morgan Stanley (NYSE: MS) today announced new steps towards its commitment to reach net-zero financed emissions by 2050. Building on its commitment to finance $1tn towards the Sustainable Development Goals, including $750MM of financing to drive the climate transition, Morgan Stanley has set 2030 interim targets for three sectors: Auto Manufacturing, Energy and Power.

In September 2020, Morgan Stanley became the first major U.S.-headquartered financial services firm to commit to net-zero financed emissions by 2050. The release of the Firm’s first interim targets represents an important milestone in support of its 2050 commitment.

Audrey Choi, Morgan Stanley’s Chief Sustainability Officer said “The recent report from the Intergovernmental Panel on Climate Change makes clear the urgency of addressing greenhouse gas emissions, and that near-term reductions are necessary if the world is to limit global temperature rise to 1.5°Celsius. Morgan Stanley’s interim net-zero targets set us on that path toward a more sustainable and prosperous future.”

Morgan Stanley’s 2030 Interim Targets

For each sector, Morgan Stanley is taking an approach that examines its financed emissions relative to client financing commitments. This will help the Firm align the relative carbon emissions footprint of its lending portfolios with science-based sector pathways to reach net-zero by 2050.

Each sector target covers Scope 1, Scope 2 and Scope 3 emissions and all greenhouse gases and is inclusive of the corporate lending portfolio. The targets are:

Auto Manufacturing: -35%
Energy: -29%
Power: -58%

Full details on the Firm’s targets can be found here, including a detailed methodology that describes our multi-step process for setting our targets.

Morgan Stanley’s Approach to Net-Zero

Morgan Stanley has taken a proactive approach to leading the development of methodologies necessary to set and track progress against credible net-zero targets. The Firm will leverage this work across the three-part Measure, Manage and Report framework for net-zero:

Measure: Utilize the carbon accounting methodology of the Partnership for Carbon Accounting Financials (PCAF) to measure baseline emissions and track progress towards 2030 interim targets
- Morgan Stanley was the first large U.S. financial firm to join PCAF and, is the only large U.S. financial Firm to sit on PCAF’s Steering Committee.
Manage: Set ambitious, credible targets using the Net-Zero Banking Alliance (NZBA) methodology to help manage emissions.
- Morgan Stanley is a founding member of NZBA and was elected to its Steering Group.
Report: Transparently disclose progress to shareholders and other stakeholders utilizing the Taskforce for Climate-related Finance Disclosure’s four-part framework.
- Morgan Stanley was among the first supporters of the TCFD’s recommendations and published its first report in 2020.

Looking Ahead

Morgan Stanley recognizes that the approach to net-zero will need to be an iterative process as data, methodologies, and climate science evolve and will update it over time to reflect these dynamics. To that end, Morgan Stanley will continue its work to develop additional financed and facilitated emissions accounting methodologies through its leadership position in the Partnership for Carbon Accounting Financials ("PCAF”). Morgan Stanley will report progress towards its 2030 interim targets annually in its Taskforce for Climate-related Financial Disclosures (“TCFD”) reports. The first set of financed emissions data is expected to be released in the 2022 report.

“Morgan Stanley is committed to working with our clients to accelerate sustainable efforts by offering leading products, solutions and insights to facilitate their low carbon transition plans. Today’s announcement builds upon the Firm’s decade plus leadership in sustainable investing”, says Choi.

To learn more about the 2030 targets, please see here.

Morgan Stanley (NYSE: MS) is a leading global financial services firm providing investment banking, securities, wealth management and investment management services. With offices in more than 41 countries, the Firm's employees serve clients worldwide including corporations, governments, institutions and individuals. For more information about Morgan Stanley, please visit www.morganstanley.com.

FORWARD-LOOKING STATEMENTS

Certain statements herein, including expectations related to financed emissions targets and the achievement thereof, may be “forward-looking statements” within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements are based on management’s current expectations and are subject to uncertainty and changes in circumstances. These statements are not guarantees of future results or occurrences. Actual results and financial conditions may differ materially from those included in these statements due to a variety of factors, including, among others, global socio-demographic and economic trends, energy prices, technological innovations, climate-related conditions and weather events, counterparty and client financial health, insurance applicability, legislative and regulatory changes, and other unforeseen events or conditions, and the precautionary statements included in this report and those contained in Morgan Stanley’s periodic filings with the Securities and Exchange Commission under the Securities Exchange Act of 1934. Any forward-looking statements made by or on behalf of Morgan Stanley speak only as to the date they are made, and Morgan Stanley does not undertake to update forward-looking statements to reflect the impact of circumstances or events that arise after the date the forward-looking statements were made. You should, however, consult further disclosures Morgan Stanley may make in future filings of its annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K and any amendments thereto or in future press releases or other public statements.

USE OF THIRD-PARTY INFORMATION

In addition, the methodology used to establish financed emission targets and track future progress against such targets utilize emissions information and estimates that have been derived from publicly available information released by third-party sources, which Morgan Stanley believes to be reasonable, although Morgan Stanley has only been able to complete limited validation. Additionally, in the absence of counter-party specific emissions data, some financed emissions will be estimated using emissions and activity factors provided by third-party sources. Certain third-party information, such as Scope 3 emissions and emissions factors, may change over time as methodologies evolve and are refined. These and other factors could cause results to differ materially from those expressed in the estimates and beliefs made by third parties and by Morgan Stanley.