Morgan Stanley teams up with Climeworks to finance carbon removal effort

Morgan Stanley (NYSE:MS) has partnered with Climeworks, the operator of the world’s largest direct air capture project, to finance carbon removal efforts, according to a statement on Thursday.

The agreement, lasting until 2037, will allow Zurich, Switzerland-based Climeworks to remove 40K tons of carbon dioxide from the atmosphere.

Morgan Stanley (MS), in turn, will “secure a sizable volume of carbon removal credits,” Climeworks noted, adding that this is the investment bank’s first-ever purchase of direct air capture credits.

Financial terms of the deal were not disclosed.

“Through our partnership with Climeworks, we are supporting the development of technology that can help drive the global economy’s transition to a more sustainable future,” said Jessica Alsford, chief sustainability officer at Morgan Stanley.

Direct air capture, a method that relies on large fans to remove CO2 from the air, remains costly, energy-demanding and untested on an industrial level. Despite these challenges, it’s expected to be a crucial tool in combating climate change.

The Wall Street Journal reported last year that JPMorgan Chase (JPM) had agreed to spend over $200M on carbon credits from multiple firms in the clean-energy industry, including Climeworks, in an effort to neutralize its environmental footprint.

A slew of global banks are showing support for nuclear energy, which can play a role in the overall transition to low-carbon energy to mitigate the impact of climate change.