UTAM Achieves Divestment Pledge, Sets More Ambitious Carbon Footprint Reduction Target for Endowment

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by KnowESG

The University of Toronto Asset Management Corporation (UTAM) has delivered on its pledge to fully divest the university’s endowment portfolio from direct investments in fossil fuel companies within 12 months – a commitment U of T President Meric Gertler announced one year ago.

The organisation says it has also made a lot of progress toward its goal of getting out of indirect investments in fossil fuel companies by 2030. These indirect investments are usually held through pooled and commingled investment vehicles.

The endowment portfolio also referred to as the Long-Term Capital Appreciation Pool, comprises the university’s endowment funds plus other investment assets and was valued at approximately $3.8 billion as of April 30.

The latest responsible investing report from UTAM shows the organisation's progress, which builds on its success in reducing the carbon footprint of the endowment portfolio as a whole.

“In October of 2021, we pledged to divest the endowment portfolio from holdings in fossil fuel companies, to achieve net-zero carbon emissions associated with the endowment portfolio by 2050, and to allocate 10 per cent of the endowment portfolio’s assets to sustainable and low-carbon investments by 2025,” President Gertler said.

Regarding the commitment to allocate at least 10 per cent of the endowment portfolio to sustainable and low-carbon investments by 2025, UTAM is making progress and is comfortable that it will reach that target ahead of schedule.

"As global problems make it harder for the world to meet its obligations under the Paris Accord, the progress made by UTAM and the University of Toronto makes us even more determined to reach these goals," said President Gertler.

The report comes as U of T was ranked second in the world and first in Canada in a new sustainability ranking by London-based Quacquarelli Symonds. The ranking took into account sustainable investing strategies and looked at how 700 post-secondary schools around the world affected the environment and the people around them.

Beginning in 2023, UTAM plans to integrate its annual responsible investing update into its annual report (rather than issuing a separate report), a reflection of how deeply UTAM’s responsible investing commitment is embedded into its investment approach.

“Responsible investing is no longer novel or exceptional, but an integral part of good investment practice,” President Gertler said. "One of the most important things UTAM has done is make responsible investing the norm, especially in Canada's post-secondary education sector."

U of T has been a sustainable finance leader in the university sector. In partnership with McGill University, U of T led the creation of Investing to Address Climate Change: A Charter for Canadian Universities. UTAM also helped launch the University Network for Investor Engagement, facilitated by SHARE, to address climate-related portfolio risks with collective action, and was the first university-affiliated institutional investor in the world to join the United Nations-convened Net-Zero Asset Owner Alliance – a group of institutional investors committed to transitioning their investment portfolios to net-zero greenhouse gas emissions by 2050.

Source: UTAM

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