This summer, The Climate Trust, a mission-driven nonprofit that specializes in financing climate solutions, has been hosting two high-level interns for projects integral to advancing our burgeoning carbon investment fund. Our Packard Environment Fellow, Jeremy Menkhaus, will provide insight on the development of a carbon-neutral investment product, and our Project Research Intern, Kate Hanson, will help bring our project tracking systems to the next level.
Jeremy, a Master of Business Administration candidate in the Yale School of Management, Forestry and Environmental Studies, is developing a strategic and tactical business plan for The Trust that addresses the potential to partner with portfolio managers to deliver a carbon-neutral investment product to the market. The goal is to aggregate a buyer pool for voluntary carbon credits that are generated by The Trust’s high-quality projects.
To illustrate this point, the holdings of a typical index (i.e. S&P 500) generate approximately 220-240 tons of CO2e per $1 million invested annually. For low-carbon funds, this level of emissions can be reduced to ~20% by reallocating dollars with only a minimal level of additional volatility. Beyond that, it is very difficult to get to a fully carbon-neutral fund while maintaining a diversified portfolio.
For that reason, The Trust has asked Jeremy to explore the idea of targeting money management firms with a turnkey solution; the delivery of credits to offset the entirety of the portfolio’s emissions, without incurring incremental risk. The result would be a carbon-neutral fund with a tolerable level of volatility relative to its benchmark.
“The objective is to support voluntary projects, such as avoided grasslands conversion, by bolstering the market for voluntary credits,” said Sean Penrith, Executive Director for The Climate Trust. “This would also help to build a track record for these types of voluntary projects, building comfort among developers and the compliance market.”
Our Project Research Intern, Kate, holds a Master of Science in Carbon Management from the University of Edinburgh, and will work with The Trust’s Carbon Offset Registry Manager and other project leads to gather historical project data for post-mortem analysis, and maintain consistency with our customer relationship management software. The role calls for research, data sleuthing, and some serious spreadsheet mojo. The end result will be an organized system for electronic storage of The Trust’s project files.
“We are pleased to have two such outstanding and qualified project aides this summer, and are excited to see the culmination of their hard work,” said Karena Gruber, Director of Operations. “Jeremy and Kate have brought great energy to the office, and have both been terrific cultural fits.”