Listen to this story:

• 2030 Target Adjustments: Morgan Stanley now aims for a 1.5–1.7°C warming limit, reflecting challenges in aligning with a strict 1.5°C goal.
• Sector-Specific Goals: The bank set new targets for aviation, chemicals, and mining, and updated existing targets for power, energy, and autos.
• Methodology Update: New “physical intensity” metrics and a baseline shift to 2022 enable more accurate tracking across sectors.

Morgan Stanley has revised its 2030 climate targets, setting sector-specific emissions reductions within a 1.5–1.7°C warming limit. This range acknowledges global challenges in meeting the 1.5°C target of the Paris Agreement, with the update marking the bank’s first major climate adjustment since 2021.

“Current government policies, technology adoption, and consumption habits are not yet aligned with the Paris Agreement’s ambition to limit the global temperature increase to 1.5°C,” the report states, explaining the move toward a broader temperature range.

The update includes revised targets for power, energy, and auto manufacturing sectors, and new goals for aviation, chemicals, and mining. Notably, the 2030 sectoral targets aim for reductions in:

• Auto Manufacturing: 29-45% decrease in emissions per vehicle kilometer.
• Aviation: 13-24% reduction in emissions per revenue tonne kilometer.
• Chemicals: 18-28% emissions reduction per tonne produced.
• Energy: 10-19% reduction in end-use emissions and 12-20% in operational emissions.
• Mining: 23-31% reduction per tonne of copper equivalent.
• Power: 45-60% decrease in emissions per megawatt-hour.

Jessica Alsford, Morgan Stanley’s Chief Sustainability Officer, elaborated on the adjusted approach: “By having that range of 1.5 to 1.7, [we are] acknowledging the challenges that the global economy faces whilst being aligned, still, with the Paris Agreement.”

Related Article: Morgan Stanley Partners with Climeworks, Signs Its First-Ever Carbon Removal Deal

New Measurement Approach

The bank also shifted to a “physical intensity” metric for tracking emissions, aligning better with clients’ decarbonization progress. This method calculates emissions per unit of production or generation rather than financing amounts, aiming for consistency with client activities. Additionally, Morgan Stanley moved the baseline year for these measurements from 2019 to 2022 to leverage more accurate, high-quality data.

“Our targets are designed to strike an appropriate balance between being ambitious and credible while also being realistic about present near-term global challenges,” the report explains.

Climate Commitment & Call to Action

Morgan Stanley’s move follows the recent UN climate report, which warned that limiting warming to 1.5°C may become impossible without accelerated global action. Despite current setbacks in sectors like electric vehicles and sustainable aviation fuels, Morgan Stanley reiterated its net-zero commitment and plans to engage clients in their climate transition strategies.

“We remain steadfast in our commitment to net-zero and will continue to engage with clients on climate transition strategies to help move the world to net-zero emissions by 2050,” the report concludes.

By expanding its sectoral reach and refining its tracking methodology, Morgan Stanley aligns with evolving climate challenges, promoting a realistic pathway toward sustainable finance and decarbonization.