Morgan Stanley’s Climate Commitment Needs to Go Further

New York, NY — Morgan Stanley announced today that it will become the first major American bank to track and report the greenhouse gas emissions from its loans and investments as part of the bank’s own contribution to the climate crisis.

According to reporting by Politico, Morgan Stanley will join the Partnership for Carbon Accounting Financials, a group of 66 financial institutions managing over $5.3 trillion of assets that is developing a methodology to track the climate impact of their loans and investments.

The methodology does not track the climate impact of underwriting issuances of debt and equity. This is a significant gap in the case of Morgan Stanley, which is one of the world’s top four banks in terms of revenues from underwriting.

Since 2016, 35 major banks have dumped at least $2.7 trillion into fossil fuel lending and underwriting. Morgan Stanley’s loans and underwriting for fossil fuels totalled more than $91 billion over this period

Stop the Money Pipeline is a coalition of over 100 organizations working to end the financing of climate destruction by pressuring banks, insurance companies, asset managers, and institutional investors to stop investing in fossil fuels and deforestation and start respecting human rights and Indigenous sovereignty.

Stop the Money Pipeline members had the following responses to today’s announcement by Morgan Stanley: 

“This move is a major step in the right direction for Morgan Stanley, and any bank that claims to support climate action or the goals of the Paris Agreement should follow suit. Wall Street is driving the climate crisis, and if banks want to be part of the solution, they have to start by being transparent about the extent to which they’re currently part of the problem. Measuring and disclosing their impact is important, and now the critical next step will be to mitigate this impact by committing to an aggressive timeline to phase out their funding for climate-polluting fossil fuels altogether,” said Ben Cushing, Sierra Club Senior Campaign Representative.

“This is a good step, but we don’t need a team of economists to know that Morgan Stanley shouldn’t be loaning billions of dollars to fossil fuels companies intent on cooking our planet,” said Alec Connon, coordinator of the Stop the Money Pipeline coalition. “It’s our hope that this news signals that Morgan Stanley already knows that, and starts to get the climate-wrecking fossil fuel industry off of its books without delay.”

“While it’s encouraging to see Morgan Stanley committing to track financed emissions, the urgency of the climate, biodiversity, and Indigenous rights crises demand that banks not only track climate impacts but also take concrete action to mitigate those impacts,” said Moira Birss, Climate and Finance Director at Amazon Watch. “Furthermore, I’m concerned that the Partnership for Carbon Accounting Financials appears to pay minimal attention to the climate impacts of deforestation, which the IPCC has identified as the second-largest driver of climate change and is also a major cause of biodiversity loss and Indigenous rights violations. A 2019 Amazon Watch report found Morgan Stanley heavily invested in Marfrig, a Brazilian beef corporation directly linked to illegal deforestation in the Amazon.”

Jason Opeña Disterhoft, Rainforest Action Network Climate and Energy Senior Campaigner, said: “Today’s move is a notable step in the right direction. Morgan Stanley joining the Partnership for Carbon Accounting Financials makes it a leader among the big U.S. banks in supporting climate impact disclosure. Civil society, investors, clients and increasingly regulators are calling for banks to account for not only the risk that climate change poses to their business, but the impact their business has on the climate. Morgan Stanley has made a significant move in becoming the first Wall Street bank to commit to measuring and disclosing the emissions from its loans and investments. This raises the bar for its U.S. peers to take similar steps on climate impact transparency. And going forward, all U.S. banks will have to match global best practice in committing to zero out their climate impact.”

“Within the dual global crises of climate chaos and COVID-19, now is time for transparent accountability and immediate action across the financial sector. We acknowledge that Morgan Stanley is taking a step in the right direction as we must have urgent action by the financial sector regarding their complicity in harming the climate and communities, yet more is needed. Those living on the frontlines of extraction are calling for bold action now — it is a matter of life and death, millions of lives are on the line. What is needed urgently to meet the Paris Climate Agreement is full divestment from the fossil fuel industry, and investment in our communities, renewable energy and a regenerative economy. Forward movement is critical,” Osprey Orielle Lake, Executive Director, Women’s Earth and Climate Action Network (WECAN) International.

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