Morgan Stanley

In terms of senior leadership accountability, Morgan Stanley assigns the responsibility for sustainability issues to the board-level Nominating and Governance Committee. It also describes its approach on sustainability themes and impact topics with clients and investees, including its approach to engagement escalation.

As a member of the Net-Zero Banking Alliance, Morgan Stanley has set a target of net-zero financed emissions by 2050. It discloses that it engages with clients in most emission-intensive sectors on climate-related topics, while its subsidiary, Morgan Stanley Investment Management is a member of Climate Action 100+ and discloses alignment with the Paris Agreement as one of its engagement topics. Morgan Stanley financed USD 450 billion in low-carbon solutions since 2018 against its goal to finance USD 750 billion in low-carbon solutions by 2030. The financial institution discloses nature- and biodiversity-related impacts as one of its engagement topics with clients in some sectors.

Morgan Stanley has a publicly available policy statement committing it to respect human rights. It discloses categories of stakeholders whose human rights have been or may be affected by its activities and has a grievance mechanism accessible to all workers, external individuals and communities to raise human rights complaints or concerns. It also discloses the proportion of women in its total direct operations workforce for each employee category. The financial institution has a policy prohibiting bribery and corruption and takes steps to identify and address bribery and corruption. Additionally, it discloses its approach to lobbying and political engagement in a public policy statement. Morgan Stanley discloses the amount of finance it directs towards small businesses.

Morgan Stanley could link the remuneration of its executive or management teams to sustainability performance criteria. Furthermore, women are underrepresented on the board of directors where only 33% of members are women. The financial institution also has an opportunity to reach at least 40% female representation in senior leadership positions and disclose the ratio of basic salary and remuneration of women to men in its total direct operations workforce for each employee category. Morgan Stanley could publish an overview of its engagement activities with clients and investees over the past year, across its financing activities.

While Morgan Stanley has interim targets for its lending activities to some sectors, it has an opportunity to disclose an interim absolute emission reduction target which covers all its financing activities. It could also specify what its financing devoted to climate solutions involves and align with internationally adopted frameworks. Its subsidiary, Morgan Stanley Investment Management encourages its investees to set a 1.5°C-aligned strategy but it could make this a requirement. No evidence was found regarding Morgan Stanley’s approach to fossil fuels that spans across the fossil fuel value chain and its financing activities, such as the amount or share of finance it directs towards fuels, or its stance on financing companies with new fossil fuel projects. Furthermore, the financial institution could commit to minimising the negative impacts it has on nature and biodiversity.

Morgan Stanley has an opportunity to describe a comprehensive process for identifying its human rights risks and impacts across all its activities, especially its financing activities. Furthermore, it discloses the ages of its board members and executive directors but has an opportunity to disclose this information for each employee category. To provide transparency on financial inclusivity, Morgan Stanley has an opportunity to disclose the amount of finance directed towards, for example, women-owned businesses or low-income developing countries.