Morgan Stanley has become the first US-based global bank to join the Partnership for Carbon Accounting Financials (PCAF) and its steering committee as part of a commitment to measuring and disclosing its approach to climate change risk and opportunity.

Launched globally in 2019, PCAF is a collaboration to standardise carbon accounting for the financial sector, enabling a harmonised 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.

“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.

PCAF launched globally last September, and now has 66 formal members, which include financial institutions that represent more than $5.3tr in assets.

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