Morgan Stanley Commits Another $750 Billion to Finance Low-Carbon Solutions

by | Apr 15, 2021

Morgan Stanley is striving toward its goal of reaching net-zero financed emissions by 2050 with a commitment to finance an additional $750 billion in support of low-carbon solutions by 2030. The financial services firm will achieve this commitment through increased clean-tech and renewable energy finance and green bond financing, along with other transactions that “enable a transition to a low-carbon economy,” Morgan Stanley says.

This latest commitment is in addition to the $250 billion announced in 2018. At the time, Morgan Stanley said that as companies, governments and institutions transition to a low-carbon economy, low-carbon financing is a “win-win for business and the environment.”

The boost in sustainable financing supports the United Nations’ Sustainable Development Goals (SDGs), the financial services firm states.

Morgan Stanley says the returns on a portfolio consisting primarily of sustainable investments may be lower or higher than a portfolio that is more diversified or where decisions are based solely on investment considerations. Because sustainability criteria exclude some investments, investors may not be able to take advantage of the same opportunities or market trends as investors that do not use such criteria.

A report from DeVere Group last summer found that more than a quarter of all clients are currently considering or are already actively engaged in responsible and sustainable investing. The company reported that since the beginning of May, 2020, 26% of clients around the world are eyeing exposure to or are now part of the environmental, social and governance (ESG) “megatrend.”

This illustrates how ESG investing has become more highly valued by investors than ever before in the last few months, deVere said.

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