Morgan Stanley aims to invest in companies that will collectively remove 1 gigaton of carbon dioxide emissions by 2050.
👉 Background: Morgan Stanley is an investment management and financial services company based in New York. It's the 39th biggest bank in the world based on total assets held.
👉 What happened: Now, Morgan Stanley has announced a $1 billion private equity strategy called 1GT. The aim is to invest in companies that will collectively remove 1 gigaton of carbon dioxide emissions by 2050.
👉 What else: This is the equivalent weight of 10,000 fully-loaded aeroplanes in carbon emissions. And interestingly, the investment team’s compensation will not be tied directly to financial returns, but also climate goals.
💡There are many ways to incentivise employees to achieve certain goals. Aligning employee incentives with financial results is obviously one of the most common.
💡But it is also one of the most controversial ways to drive behaviour within an organisation. In fact, a study by AMP Capital showed that “incentives linked solely to financial metrics can often fuel negative culture and conduct". Think: the findings from the Royal Commission into banking.
💡So Morgan Stanley is flipping the incentives for its climate investing team so that staff are rewarded for doing good for the planet, rather than just doing good financially.
Sign up for Flux and join 100,000 members of the Flux family
