Morgan Stanley

Morgan Stanley has long been recognized as a leader in financial services and investment management. In recent years, the firm has made climate action and sustainable finance a central part of its corporate strategy. Through ambitious goals, Morgan Stanley aims not only to reduce its own environmental footprint but also to influence the global financial sector to adopt greener, carbon-conscious practices.

Net-Zero Financed Emissions by 2050

In 2020, Morgan Stanley committed to achieving net-zero financed emissions by 2050. This pledge aligns with the International Energy Agency’s Net Zero Emissions by 2050 scenario and covers emissions across the firm’s lending and investment portfolio. To achieve this target, the firm has set interim sector-specific targets for 2030, including industries such as power, energy, transportation, chemicals, and mining.

These targets ensure that Morgan Stanley can measure, track, and reduce financed emissions over time while guiding clients toward sustainable investment opportunities. By focusing on the emissions linked to its financial activities, Morgan Stanley demonstrates that banks and asset managers can play a pivotal role in the global transition to a low-carbon economy.

Mobilizing Capital for Sustainable Solutions

Morgan Stanley has also pledged to mobilize $1 trillion in capital toward sustainable solutions by 2030, with $750 billion specifically allocated to low-carbon and green initiatives. These investments include renewable energy, energy efficiency projects, carbon removal technologies, and climate-focused private equity.

As of 2023, the firm has already mobilized over $820 billion in sustainable capital, surpassing early milestones and showing tangible progress toward financing a net-zero economy. Through these efforts, Morgan Stanley not only reduces its own portfolio emissions but also accelerates the deployment of climate solutions worldwide, supporting clients who want to invest in sustainable opportunities.

Carbon Neutral Operations

Morgan Stanley has achieved carbon neutrality across its global operations, including offices, branches, and business travel, and maintains this status through a combination of direct emission reductions and high-quality carbon credits. In addition:

• The firm sources 100% of its operational electricity from renewable energy, reducing ongoing emissions from offices, data centers, and trading floors.
• Energy efficiency initiatives are implemented across buildings and operations to lower overall electricity demand.
• Supplier engagement programs encourage vendors and partners to adopt renewable energy and sustainable practices, further reducing the firm’s indirect emissions.

This operational approach complements Morgan Stanley’s broader financed-emissions strategy, ensuring that internal sustainability measures reinforce investment-related climate goals.

Investing in Carbon Dioxide Removal (CDR)

Morgan Stanley recognizes that carbon removal technologies are essential for achieving global net-zero goals. To this end, the firm invests in solutions that actively remove CO₂ from the atmosphere, combining engineered and nature-based approaches:

• Direct Air Capture (DAC): Partnering with technology providers to remove carbon from the air and store it permanently.
• Nature-Based Solutions: Supporting reforestation, soil carbon sequestration, and sustainable land management initiatives.
• Durable Storage Partnerships: Ensuring that captured carbon is securely stored in geological formations or long-term carbon reservoirs.

For example, Morgan Stanley Investment Management (MSIM) manages the 1GT Climate Private Equity Fund, targeting investments in companies that collectively aim to avoid or remove one gigaton of CO₂-equivalent emissions by 2050. This approach demonstrates how financial institutions can direct capital to high-impact climate solutions, creating measurable benefits for the planet.

Sustainable Finance and Client-Facing Initiatives

Morgan Stanley extends its sustainability focus to client services, helping institutional and individual investors incorporate climate considerations into their portfolios:

• Sustainable Funds and Products: Offering ESG-focused investment products and portfolios that support low-carbon transitions.
• Climate Advisory Services: Guiding clients on financing, risk assessment, and investment strategies that reduce exposure to climate-related risks.
• Carbon Removal Credits: Providing access to verified carbon removal projects, enabling clients to offset emissions through high-quality CDR solutions.

Through these initiatives, Morgan Stanley ensures that its clients can participate in global carbon removal efforts while aligning investments with long-term sustainability goals.

Transparency, Accountability, and Reporting

Morgan Stanley maintains rigorous transparency through annual ESG and sustainability reports, detailing progress toward net-zero financed emissions, carbon-neutral operations, and climate-focused investments. Reporting includes:

• Emission reductions and avoided emissions across financed portfolios
• Investment impact in renewable energy and carbon removal technologies
• Progress on interim 2030 targets and sector-specific goals

By publishing these disclosures, Morgan Stanley fosters trust among investors, regulators, and the public, demonstrating measurable progress toward its climate commitments.

Challenges and Opportunities

While Morgan Stanley has made significant strides, scaling carbon removal and achieving net-zero financed emissions involves challenges:

• Complexity of measuring financed emissions across diverse industries and geographies
• High investment needs for scaling carbon removal and sustainable solutions
• Ensuring permanence of carbon removal in both engineered and nature-based approaches

Nevertheless, the firm continues to innovate, partner with climate-focused organizations, and deploy capital strategically to overcome these obstacles.

Broad Industry Impact

Morgan Stanley’s climate initiatives extend beyond its operations:

• Influencing the financial sector: Setting benchmarks for net-zero finance and sustainable investment.
• Supporting global carbon removal markets: Channeling capital to verified CDR technologies.
• Partnering with governments and NGOs: Advancing scalable climate solutions worldwide.

Through these efforts, Morgan Stanley leverages its position as a leading financial institution to accelerate the transition to a low-carbon economy.

Conclusion

Morgan Stanley’s climate strategy demonstrates a forward-looking approach that integrates carbon removal, operational efficiency, and sustainable finance. By committing to net-zero financed emissions, carbon-neutral operations, and investments in durable CDR technologies, the firm sets a benchmark for the financial industry.

Through transparent reporting, strategic partnerships, and large-scale capital deployment, Morgan Stanley proves that finance can play a critical role in removing carbon from the atmosphere, supporting clients, and driving a global net-zero transition.