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Mellon: Carbon Efficiency Strategy

Type: Aligned Investments

Topic: Buildings & Housing, Clean Transportation, Energy Efficiency, Renewable Energy, Technology

Status: Current

The Carbon Efficiency Strategy over-weights cleaner companies that are creating better climate outcomes.

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$100 million; seeded fund in 2014

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A broad US stock fund that helps McKnight tilt its investment toward companies that are producing fewer carbon emissions compared to peers. It also excludes coal companies. With about 1,000 holdings, the fund reduces the carbon intensity of our investment (a.k.a. greenhouse gas emissions per dollar of sales) by 53% compared to its benchmark.

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Russell 3000

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Tracks its benchmark, portfolio of $109 million as of Q4 2017

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Lessons Learned

In 2016, Mellon added broad ESG criteria to the fund’s carbon efficiency weighting. Now, 25% of a company’s position reflects other environmental, social, and governance (ESG) criteria.

In 2016, McKnight wrote to over 170 companies in the fund that did not report emissions. We were joined by Rockefeller Brothers Fund and the Nathan Cummings Foundation to underscore investor interest in transparency. (Read the letter here).

Disclaimer of Endorsement: The McKnight Foundation does not endorse or recommend any commercial products, processes, or service providers.

Last updated 3/2020