diff --git a/stacksets/datadog-shipping/stackset.yaml b/stacksets/datadog-shipping/stackset.yaml
index 6ea2ea4..cf32c5d 100644
--- a/stacksets/datadog-shipping/stackset.yaml
+++ b/stacksets/datadog-shipping/stackset.yaml
@@ -32,6 +32,8 @@ Resources:
           ParameterValue: !Ref DatadogHttpEndpointUrl
         - ParameterKey: DatadogAPIKey
           ParameterValue: !Ref DatadogApiKey
+      Capabilities:
+        - CAPABILITY_IAM
       StackInstancesGroup:
         - DeploymentTargets:
             OrganizationalUnitIds: !Ref ObservabilityOu