Facing climate headwinds, Wall Street soldiers on

October 28, 2024 at 10:29 AM EDT

On Wall Street, investment industry stalwarts have been rethinking environmental strategy in 2024.

Earlier this year, firms including JP Morgan, PIMCO, Goldman Sachs, and Nuveen, withdrew from Climate Action 100+. The investor-led initiative aims to reduce corporate greenhouse gas emissions. The firms withdrew after Climate Action 100+ called on all members to promote environmental policy objectives to corporate clients and elected officials — a move fraught with potential controversy for U.S. asset managers and banks.

Despite mounting obstacles, Wall Street continues to expand offerings for companies anxious to reduce their environmental footprint while working to reduce their own.

New York Stock exchange parent company Intercontinental Exchange (ICE) ICE announced a partnership with analytics firm Dun & Bradstreet Holdings (DNB) DNB last week to provide climate risk analytics for private companies. ICE, which supports a range of sustainability indices with futures and options markets, will provide proprietary geospatial intelligence platforms and climate data models to be melded with DNB business analytics.

The new product suite will be incorporated into ICE Climate, the exchange’s platform for corporate investors seeking to mitigate and hedge environmental impact.

Meanwhile, Jessica Alsford, Morgan Stanley’s chief sustainability officer, told Reuters on Friday that the bank will lower expectations for reducing emissions from its corporate lending portfolio. The move comes as policy stagnation and changing market dynamics make it more difficult for lenders to find green opportunities.

According to Alsford, the revised lending strategy will reduce her bank’s global warming target from 1.5°C to a range of 1.5°C to 1.7°C. Bank management remains committed to reducing their credit portfolio’s carbon footprint despite a reduced baseline.

Morgan Stanley’s announcement came on the heels of the United Nations Emissions Gap Report 2024 issued last week. The 15th edition in a series, the report details a significant failure by participating nations to achieve carbon goals. Countries who pledged to reduce CO2 must redouble efforts in order to catch up or face a dire shortfall, according to the report.

“If they do not, the Paris Agreement target of holding global warming to 1.5°C will be dead within a few years and 2°C will take its place in the intensive care unit,” the report states.

After years of idealistic rhetoric from world governments without policy follow through, the U.N. Environment Programme estimates that catching back up to achieve the original 1.5°C goal will require a 42% decline in total emissions by 2030. Without action, the international body projects an average temperature increase of as much as 3.1°C by the end of this century.

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Facing climate headwinds, Wall Street soldiers on

More stories we’re tracking at Equities:

Report: Investors stick with impact, but shift messaging

Catalytic Capital Consortium announces new partners

Altman-linked nuclear stock continues to boom

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