Morgan Stanley Joins Leadership of Global Carbon Accounting Partnership

The Partnership for Carbon Accounting Financials (PCAF) is proud to announce that Morgan Stanley has joined its global Steering Committee focused on the complex challenge of measuring financed emissions. In addition, Morgan Stanley will lend insights and expertise to help PCAF develop the global accounting standard that can be used by all financial institutions to measure and reduce their climate impact.

Launched globally in 2019, PCAF is a collaboration to standardize carbon accounting for the financial sector, enabling a harmonized approach to the assessment and disclosure of greenhouse gas emissions financed by loans and investments. PCAF is used by asset owners, asset managers and banks to support a broad range of climate initiatives.

Morgan Stanley is the first major U.S.-based global financial institution to join PCAF’s 66 formal members, which include financial institutions from around the world and represent more than $5.3 Trillion USD in assets.

“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,” said Audrey Choi, Morgan Stanley’s Chief Sustainability Officer and CEO of the Morgan Stanley Institute for Sustainable Investing.

The measurement of financed 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 the disclosure expectations of important stakeholders, and assess progress and pathways to global climate goals. PCAF‘s methodology is currently being used in several markets for measuring financed emission in the financial sector and will soon be published as a global methodology which has been the work of a core team of financial institutions, including Morgan Stanley.

PCAF’s Steering Committee is focused on managing the progress and success of this industry-led initiative. PCAF’s Steering Committee members include ABN AMRO, Amalgamated Bank, ASN Bank, Global Alliance for Banking on Values (GABV) and Triodos Bank. In addition to its role on the Committee and its efforts to enhance PCAF’s core measurement methodology, Morgan Stanley commits to start measuring and disclosing lending portfolio greenhouse gas emissions.

“We are very excited about Morgan Stanley’s leadership in sustainability and believe they will bring an important voice to our management group,” said Giel Linthorst, Executive Director of the PCAF secretariat. “As we work towards COP26, and a critical year ahead in aligning the finance sector with the goals of the Paris Climate Agreement, we believe that PCAF and member financial institutions will play an important leadership role in that work.”

“Dutch banks have played a critical role since the Paris Climate Summit in leading the methodological work for a carbon accounting system in the finance sector. Looking ahead, we know that in order to influence positive action on climate change in the private sector, there needs to be global adoption of a shared financed emissions accounting methodology across financial institutions, including by the global banks, many of which are based in the U.S. We are thrilled with Morgan Stanley’s decision and commitments, and look forward to working side by side in this effort,” said Ivan Frishberg, Director of Impact Policy at Amalgamated Bank and Chair of the PCAF North America group.

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