Morgan Stanley Investment Management (MSIM) has launched a new $1 billion (€970 million) private equity strategy to invest in companies which will remove one gigaton of carbon dioxide emissions from the atmosphere by 2050, or prevent that amount from entering the atmosphere.
Investments will focus on the mobility, power, sustainable food and agriculture sectors and circular economy and deliver both financial returns and positive environmental impact, MSIM said.
Low-Carbon Technologies
Companies need trillions of dollars of investment to help them reduce carbon emissions and to develop new low-carbon technologies to meet the aims of the Paris Agreement to limit global warming.
Through the 1GT strategy, MSIM will invest in private companies in North America and Europe, whose activities aim to collectively prevent or remove 1GT of emissions.
MSIM said it would also tie some of the 1GT investment team's compensation to the emissions performance of underlying investments.
'Financial Incentives'
"We believe that in order to catalyse meaningful progress in climate solutions, a significant portion of financial incentives should be linked to such climate goals," Vikram Raju, MSIM's head of climate investing and the 1GT Platform, said in a statement.
MSIM said it has already deployed $600 million (€584.6 million) of capital to companies seeking to mitigate climate change since 2015. The $1 billion will be in addition to this amount.
Morgan Stanley Investment Management, together with its investment advisory affiliates, has over 1,200 investment professionals around the world and $1.3 trillion in assets under management or supervision as of September 30, 2022.
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