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Morgan Stanley has joined several of its peers in exiting the Net-Zero Banking Alliance (NZBA), a UN-backed coalition of banks dedicated to advancing global net zero goals through their financing activities, ESG Today has confirmed.

Despite leaving the NZBA, however, Morgan Stanley said that it remains committed to its climate goals, which includes an ambition to achieve net zero financed emissions by 2050.

In a statement provided to ESG Today, a Morgan Stanley spokesperson said:

“Morgan Stanley has decided to withdraw from the Net-Zero Banking Alliance. Morgan Stanley’s commitment to net-zero remains unchanged.”

The  announcement marks the latest in a rapid-fire string of departures from the NZBA over the past few weeks, beginning with Goldman Sachs in early December, and followed by firms including Wells Fargo, Citi and Bank of America.

Morgan Stanley joined the NZBA in April 2021 as a founding member. Members of the NZBA commit to transitioning operational and attributable greenhouse gas (GHG) emissions from their financing activities to align with net zero pathways by 2050, and to set 2030 financed emissions targets, initially focused on key emissions intensive sectors.

After rapidly expanding from 43 banks at launch to over 140 banks representing $74 trillion in 2024, members of the group have have come under significant pressure, particularly from Republican politicians in the U.S., who have been warning financial institutions including banks, insurers, asset owners and investors of potential legal violations from their participation in climate-focused alliances and of plans to exclude the companies from state business, as part of a broader anti-ESG political campaign.

Morgan Stanley set a goal in 2020 to achieve net zero financed emissions by 2050 and has released a series of interim financed emissions reduction targets for several high-emissions sectors. The firm recently revised its interim financed emissions targets, based on its assessment that the global economy and policy is not currently on track with the ambition to limit the global temperature increase to 1.5°C above pre-industrial levels, which was the basis of its prior targets.

In the firm’s statement, the Morgan Stanley spokesperson said:

“We aim to contribute to real-economy decarbonization by providing our clients with the advice and capital required to transform business models and reduce carbon intensity. We will continue to report on our progress as we work towards our 2030 interim financed emissions targets.”

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