Key Impact Points:

• Major CO₂ Removal Commitment: Morgan Stanley and Climeworks sign a long-term agreement to remove 40,000 tons of CO₂ by 2037, marking the financial institution’s first Direct Air Capture credit purchase.
• Scaling Climate Technology in the U.S.: Climeworks’ second-largest contract will accelerate its scale-up in the U.S., supporting the Direct Air Capture Hub Project Cypress backed by the Department of Energy.
• Strategic Climate Investment: This move reflects Morgan Stanley’s net-zero ambition and its commitment to pioneering new climate technologies.

Morgan Stanley has partnered with Climeworks, a leader in carbon removal, to permanently eliminate 40,000 tons of CO₂ from the atmosphere. This partnership, which runs until 2037, is Climeworks’ second-largest contract and will significantly scale its technology in the U.S. The initiative supports Climeworks’ role as the anchor technology provider for the Direct Air Capture Hub Project Cypress, funded by the U.S. Department of Energy.

For Morgan Stanley, this agreement represents its first purchase of Direct Air Capture credits, underscoring the financial institution’s commitment to developing cutting-edge climate technology. The purchase aligns with Morgan Stanley’s larger ambition to achieve net-zero financed emissions by 2050 and mobilize USD 1 trillion in sustainable finance by 2030.

“As a financial institution, Morgan Stanley plays an important role in helping to direct capital toward low-carbon solutions,” says Jessica Alsford, Chief Sustainability Officer at Morgan Stanley. “Through our partnership with Climeworks, we are supporting the development of technology that can help drive the global economy’s transition to a more sustainable future.”

The Importance of Carbon Removal

With rising temperatures—2023 global averages hit a record-breaking 1.45°C above pre-industrial levels—Morgan Stanley and Climeworks see the need for large-scale carbon removal.

As Christoph Gebald, co-founder and co-CEO of Climeworks, explains: “Investing in carbon removal is more than an environmental responsibility—it’s a strategic business move. By securing access to high-quality carbon removals now, companies position themselves ahead of the curve of future regulatory changes and competitive pressures.”

RELATED ARTICLE: Sustainable Funds Reach Record $3.5 Trillion AUM in 2024: Morgan Stanley Report

Climeworks already operates two Direct Air Capture plants in Iceland and is expanding efforts in the U.S. with the goal of establishing one of the country’s first megaton Hubs, supported by the Bipartisan Infrastructure Law. The collaboration with Morgan Stanley strengthens Climeworks’ mission to scale up its technology and make a significant impact on the net-zero transition.

This partnership marks a significant step toward advancing the global efforts to combat climate change, by reducing CO₂ emissions and enabling sustainable business practices for the future.