Morgan Stanley Announces Net-Zero Targets for Auto, Energy, and Power Sectors

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by | Nov 3, 2021

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Morgan Stanley today announced new steps towards its commitment to reach net-zero financed emissions by 2050. Building on its commitment to finance $1 trillion towards the Sustainable Development Goals, including $750 million 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 US-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.

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 the multi-step process for setting targets.

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 US financial firm to join PCAF and, is the only large US 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.

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