Morgan Stanley to Show How Loans Contribute to Climate Change

Morgan Stanley will begin reporting the carbon emissions resulting from its lending and investments, providing greater clarity than any of its major American peers on how the bank contributes to climate change.

The firm became the first major U.S. bank to join the Partnership for Carbon Accounting Financials, Morgan Stanley said in a statement Monday. The group’s 66 formal members, which represent more than $5.3 trillion in assets, are working to push the finance industry toward contributing to the goals of the Paris climate accord.

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New York-based Morgan Stanley also will be on the partnership’s steering committee and help PCAF develop a global accounting standard that can be used by financial institutions to measure and cut their impact on the climate. Other committee members include ABN Amro Bank NV, Amalgamated Bank and ASN Bank.

“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,” Audrey Choi, chief sustainability officer at Morgan Stanley, said in the statement.

U.S. banks are the biggest financiers of polluters and have been slower to reckon with their own contribution to global climate change than many of their European peers. PCAF, which was created by fourteen Dutch financial institutions in 2015, is working to quantify the impact on emissions of funding to the carbon-based fuel industry.

JPMorgan Chase & Co. provided more loans to fossil fuel companies than any other bank from 2016 to 2019, at $269 billion, followed by Wells Fargo & Co., at $198 billion, according to environmental group Rainforest Action Network. Morgan Stanley was No. 11 for the period, at $92 billion.

The move is a “major step in the right direction for Morgan Stanley,” Ben Cushing, senior campaign representative for the Sierra Club, said in a separate statement. “Wall Street is driving the climate crisis, and if banks want to be part of the solution, they have to start by being transparent about the extent to which they’re currently part of the problem.”

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