Morgan Stanley Ties Incentive Comp on New Climate Investment Platform to Emissions Reduction Goals
Morgan Stanley Investment Management (MSIM) announced today the launch of 1GT, a new growth-oriented private equity platform aimed at investing in climate solutions companies that will eliminate 1 billion tons (1 gigaton) of CO2 emissions by 2050.
The firm stated that half of the 1GT team’s incentive compensation will be tied to the achievement of the platform’s climate objectives.
According to Vikram Raju, Head of Climate Investing at MSIM, the launch of the strategy meets a “need to radically alter the traditional model of private equity impact investing in three ways,” including tangible and ambitions climate goals, linking financial incentives to those goals, and providing transparent measurement to the goals to limited partners.
“With our 1GT goal and 50 percent carry link, we have endeavored to do just that.”
The new platform will invest primarily in North American and European private companies that provide products and services that enable meaningful improvements in carbon footprints, and can deliver a meaningful financial return. Investment areas will include mobility, power, sustainable food and agriculture, and circular economy themes.
1GT will be headed by Raju, leading a team that has deployed nearly $600 million of capital since 2015 in companies seeking to mitigate climate change, according to MSIM.
Navindu Katugampola, MSIM’s Global Head of Sustainability, said:
“1GT is a further example of MSIM’s commitment to providing innovative solutions and market-leading products that help our clients address time-critical sustainability issues while meeting fiduciary obligations to their investors.”