Morgan Stanley to Disclose GHG Impact of Loans, Joins Carbon Accounting Coalition
The Partnership for Carbon Accounting Financials (PCAF) announced this morning that Morgan Stanley has joined its steering committee. The PCAF is a global partnership of financial institutions with a mission to develop and implement a harmonized approach to assess and disclose the greenhouse gas (GHG) emissions associated with their loans and investments. Morgan Stanley also announced that it will commit to start measuring and disclosing the GHG emissions of its own lending portfolio.
Audrey Choi, Morgan Stanley’s Chief Sustainability Officer and CEO of the Morgan Stanley Institute for Sustainable Investing, said:
“We are excited to join PCAF and to support the important work they are leading to build a methodology for global banks’ efforts to track and measure climate change risks.”
PCAF launched globally in 2019, and has already been joined by 66 members, representing more than $5.3 trillion in assets. With today’s announcement, Morgan Stanley becomes the first major U.S.-based global financial institution to join the organization. Other Steering Committee members include ABN AMRO, Amalgamated Bank, ASN Bank, Global Alliance for Banking on Values (GABV) and Triodos Bank.
According to PCAF, the measurement of financed emissions can provide important data that financial institutions can use to assess risk, manage impact, meet the disclosure expectations of important stakeholders, and assess progress and pathways to global climate goals. The partnership’s methodology is already being used in several markets for measuring financed emission in the financial sector and is expected to soon be published as a global standard, with the goal of enabling financial institutions to measure and reduce their climate impact. The methodology has been developed by a core team of financial institutions, including Morgan Stanley.
Giel Linthorst, Executive Director of the PCAF secretariat said:
“We are very excited about Morgan Stanley’s leadership in sustainability and believe they will bring an important voice to our management group. As we work towards COP26, and a critical year ahead in aligning the finance sector with the goals of the Paris Climate Agreement, we believe that PCAF and member financial institutions will play an important leadership role in that work.”
Ivan Frishberg, Director of Impact Policy at Amalgamated Bank and Chair of the PCAF North America group said:
“Dutch banks have played a critical role since the Paris Climate Summit in leading the methodological work for a carbon accounting system in the finance sector. Looking ahead, we know that in order to influence positive action on climate change in the private sector, there needs to be global adoption of a shared financed emissions accounting methodology across financial institutions, including by the global banks, many of which are based in the U.S. We are thrilled with Morgan Stanley’s decision and commitments, and look forward to working side by side in this effort.”