Morgan Stanley lowered its expectations for emissions reductions in its corporate lending portfolio as the world moves too slowly toward a greener economy, the bank’s head of sustainability told Reuters.
Slowing sales of electric vehicles, lagging adoption of biofuels in aviation, and political and financing obstacles in the energy sector are some of the factors hindering progress, according to Jessica Alsford.
Although banks such as the Dutch ING have cut loans to some clients, for example in the oil and gas sector, Morgan Stanley He said in a report outlining his new goals that he was conscious of not doing it too quickly.
However, it added that unless the pace of change accelerates, its customers and the company itself “may not achieve the goals of aligning with net zero.”
In this context, the focus of its lending will now be aimed at limiting global warming to between 1.5 and 1.7 degrees Celsius, or a relaxation of the previous target of 1.5 degrees, according to the bank’s first major climate update in three years.
“Current technologies, current policies are not fully aligned with 1.5 degrees, and having that range of 1.5 to 1.7 recognizes the challenges that the global economy faces, while it aligns, still , with the Paris Agreement,” Alsford said.
The Paris Agreement aims to limit the average increase since the industrial era to well below 2 degrees by 2050.
Despite record temperatures across the planet, emissions from many companies continue to rise, and a UN report revealed Thursday that the average global temperature rise is on track to reach 3.1 degrees by 2100.
