Morgan Stanley has set a significant precedent as the first major U.S. bank to commit to tracking the greenhouse gas emissions associated with its loans and investment offerings.
In an effort to enhance transparency and accountability in the financial sector, the bank is joining the Partnership for Carbon Accounting Financials (PCAF). This initiative aims to establish a global accounting framework that enables financial institutions to measure and mitigate their climate impact effectively.
PCAF was originally founded by a coalition of Dutch banks in 2015, focusing on the development of open-source methodologies for calculating greenhouse gas emissions across various asset classes in their portfolios. Since its global launch in 2019, Morgan Stanley has become the first significant U.S.-based institution to join PCAF’s growing network, which currently boasts 66 formal members from around the world, collectively managing over $5.3 trillion in assets.
Ivan Frishberg, the director of impact policy at Amalgamated Bank and chair of the PCAF North America group, believes Morgan Stanley’s involvement may encourage other large U.S. banks to engage in similar efforts. “Dutch banks have played a vital role in advancing methodological work for a carbon accounting system in the financial sector since the Paris Climate Summit,” he stated. “To drive meaningful action on climate change, it is essential for financial institutions worldwide, particularly major banks in the U.S., to adopt a shared methodology for accounting for financed emissions. We are excited about Morgan Stanley’s commitment and look forward to collaborating closely in this important initiative.”