Morgan Stanley will be the first U.S. bank to disclose how its loans and investments contribute to greenhouse gas emissions
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Morgan Stanley will begin measuring and disclosing the loan portfolio’s greenhouse gas emissions and will support the push towards universal climate risk accounting – the first US bank to take such action.
The Partnership for Carbon Financial Accounting (PCAF) confirmed on Monday that Morgan Stanley MS,
joined its efforts towards a unified measure of financed emissions. Additionally, Morgan Stanley will help the PCAF develop the global accounting standard that can be used by all financial institutions to measure and reduce their climate impact.
Launched globally last year, the CFP is a collaboration to standardize carbon accounting for the financial sector, enabling a harmonized approach to measuring and reporting on greenhouse gas emissions financed by loans and investments.
It had mostly European members, drawing criticism from some climate groups that the United States is lagging behind in these efforts.
“We are delighted that American banks are finally taking up the challenge of measuring and reducing climate impacts, as their European peers have already done. Morgan Stanley’s commitment shows that digging in and taking responsibility for its contribution to the climate is good business. We expect other US banks to take note, ”said Lila Holzman, energy program manager at As You Sow, an advocate for sustainable investing.
Morgan Stanley joins the official 66 members of the PCAF, which include financial institutions from around the world and represent more than $ 5.3 trillion in assets.
Read:For the first time, the majority of shareholders are pushing the oil giant Chevron to align with the Paris climate pact
Measuring funded emissions, defined by the Greenhouse Gas Protocol as Scope 3 – Category 15 emissions, provides important data that financial institutions can use to assess risk, manage impact, meet stakeholder disclosure expectations important and assess progress and pathways to climate goals. Morgan Stanley is also committed to starting to measure and disclose greenhouse gas emissions from its loan portfolio.
Climate groups have welcomed changes in banking policy, but warn that financial sector targets are not enough to limit climate change to 1.5 degrees Celsius, the target set in the voluntary Paris Pact. The oil industry and its financial and political backers are pushing for a mix of energy sources as the United States embraces energy independence, including low-cost natural gas, as well as renewable options.
“As we prepare for COP26 and a crucial year to align the financial sector with the goals of the Paris Climate Agreement, we believe that the PCAF and member financial institutions will play an important leadership role in this work”, said Giel Linthorst, director director of the PCAF secretariat.
Read:Here’s why utility carbon emissions can drop even in a strong economy
JPMorgan Chase & Co. JPM,
, which is considered the oil sector’s largest lender, announced earlier this year that it would end or phase out lending to certain interests in fossil fuels, namely Arctic drilling and mining. coal.
Morgan Stanley shares are up about 1.5% year-to-date, while JPM shares are down 30% year-to-date. The Dow Jones Industrial Average DJIA,
is down 6.5% over the same period.
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