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Low Carbon Risk Mutual Funds

These funds hold companies that are well-positioned for a transition to a lower carbon economy.
Morningstar Sustainability Rating

This list contains all US-domiciled Mutual Funds that receive the Morningstar® Low Carbon Designtation™ and that state a specific sustainability focus or mandate in their regulatory documents.

List Criteria

Morningstar Sustainable Attributes

Morningstar defines a strategy as an intentional "Sustainable Investment" if it is described as focusing on sustainability; impact; or environmental, social, and governance, or ESG; factors in its prospectus or other regulatory filings.

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Low Carbon Designation Funds

The Morningstar® Low Carbon DesignationTM allows investors to easily identify low-carbon funds within the global universe. Funds may receive the Low Carbon Designation based on two metrics – Morningstar® Carbon Risk ScoreTM (12 Month Average) and the Fossil Fuel InvolvementTM (12 Month Average). To receive the Morningstar® Low Carbon DesignationTM, a fund must have a 12-month average Morningstar Carbon Risk Score below 10 and a 12-month average Fossil Fuel Involvement of less than 7% of assets. 

To calculate the Morningstar Portfolio Carbon Risk Scores, Morningstar uses Sustainalytics’ company Carbon Risk Ratings, which indicate the risk that companies face from the transition to a low-carbon economy.

To calculate the Morningstar Portfolio Fossil Fuel Involvement Morningstar uses Sustainalytics’ research. Companies are considered involved in fossil-fuels if they derive at least an aggregate 5% share of total revenue from the following activities: thermal coal extraction, thermal coal power generation, oil and gas production, and oil and gas power generation. Companies deriving at least 50% of their revenue from oil and gas products & services are also included. Companies involved in arctic oil & gas exploration and oil sands extraction will be included only if there is no involvement in oil & gas production.

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