Morgan Stanley launches climate PE platform

Morgan Stanley Investment Management has launched the 1GT private equity platform for investments in companies that will remove CO2 emissions.

The platform is for investments that collectively avoid or remove one gigaton of carbon dioxide-equivalent (CO2e) emissions from the Earth’s atmosphere from the date of the Platform’s investment through 2050, the date by which the United Nations has mandated “Net Zero” must be achieved.

1GT is targeting investments in private companies based primarily in North America and Europe and will tie half of its incentive compensation to the underlying investments collectively catalyzing one gigaton avoidance/reduction in CO2e emissions from the date of 1GT’s investment through 2050.

Vikram Raju, MSIM’s Head of Climate Investing and the 1GT Platform, commented: “As COP27 concludes, it is clear now more than ever that we need to radically alter the traditional model of private equity impact investing in three ways. First, we need to seek climate goals that are tangible rather than anecdotal and ambitious rather than tangential. Second, we believe that in order to catalyze meaningful progress in climate solutions, a significant portion of financial incentives should be linked to such climate goals. Third, the measurement of those goals should be transparent to limited partners. With our 1GT goal and 50 percent carry link, we have endeavored to do just that.”