Morgan Stanley
  • Institute for Sustainable Investing
  • Apr 12, 2019

Carbon Yield Fund Wins 2019 Sustainable Investing Challenge

A proposal from graduate students at Northwestern University’s Kellogg School of Management would help farmers generate new revenue from carbon credits and overcome financial barriers to accessing organic markets.

To learn about and apply for the 2020 Kellogg-Morgan Stanley Sustainable Investing Challenge, click here.

The participants in the 9th Annual Kellogg-Morgan Stanley Sustainable Investing Challenge enter the field of sustainable finance at a time of great momentum, interest and activity.

While winning teams in the earliest Sustainable Investing Challenge competitions faced a world that knew little about the field, this year’s contestants head into a market with a high awareness of the discipline and a growing appreciation of the importance of sustainable investing in an era of rapid climate change and rising economic disparities.

The winning team of students from Northwestern University’s Kellogg School of Management is positioned for a bright future in the industry, in addition to capturing the title and taking home a $10,000 prize.

“The Sustainable Investing Challenge winners of the past have blazed trails for this year’s contestants and future students as well,” said Matthew Slovik, Head of Global Sustainable Finance at Morgan Stanley and a judge of the Challenge. “The impressive proposal articulated by the Carbon Yield Fund from Northwestern University’s Kellogg School of Management demonstrates that, by bringing creativity to finance, we can make meaningful progress on pressing social and environmental challenges.”

About the Winning Team: The Carbon Yield Fund

Graduate students from Northwestern University’s Kellogg School of Management impressed the judges during the presentation of their innovative proposal to help reduce greenhouse gas emissions by increasing organic farming practices. The Carbon Yield Fund would provide loans to Midwestern farms in the U.S. that begin the organic certification process. The fund would then monetize emissions reductions associated with regenerative organic agriculture through an aggregated carbon offset program documenting and marketing credits on behalf of the farmers. This additional revenue would help offset transition costs for farms and return capital to the fund’s investors. The team embodied the spirit of the Challenge by designing a new investment approach to help address a critical environmental and economic issue.

“In the nine years since we launched this challenge, we’ve seen students’ ideas and approaches grow and change with the development of the field,” shared Kellogg School of Management Professor David Chen. “This year’s competing teams piqued our interest with the depth of their research and sophistication of their financial modeling and innovation. In particular, the Carbon Field Fund team showed a maturity in financial acumen and impact modeling that should impress us all.”

Growing Interest in Sustainable Investing

This year’s competition drew more interest than ever: A total of 365 students from 80 graduate schools formed 109 teams and submitted investment prospectuses targeting sustainability and impact challenges in 31 countries.

Twelve finalist teams presented their ideas at the competition’s finals, held at Morgan Stanley’s offices in Hong Kong on April 12. The students themselves hailed from countries around the globe, including Australia, China, India, Singapore, Spain, and the United States. 

The Challenge and the ideas presented by the finalists highlight the burgeoning interest in sustainable investing and the future career opportunities it may hold for a new generation of investors. In a recent survey by Morgan Stanley and Bloomberg L.P., U.S. asset managers said they would be dedicating more resources to sustainable investing in the coming years including adding more talent equipped to integrate social and environmental impact into investment strategy.

At a time when Impact Investing is increasingly in demand by both retail and institutional investors, the Kellogg-Morgan Stanley Sustainable Investing Challenge highlights the breadth of opportunities available to investors seeking to make a positive impact alongside market rate returns.

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