University of Toronto endowment to eliminate fossil-fuel investments

Good News Notes:

The University of Toronto will eliminate fossil-fuel companies from its endowment fund, beginning immediately, according to a news release issued Wednesday.

The University of Toronto Asset Management Corp., the investment manager of the C$4 billion ($3.2 billion) endowment fund, said in the release it will divest all direct investments in fossil-fuel firms within the next 12 months and pull out from all indirect investments, which are usually held via “pooled and commingled investment vehicles,” by 2030 at the latest.

As of June 30, UTAM said in the release, fossil-fuel companies accounted for 1.62% of the value of its long-term investments. The university spokesman could not comment on prior exposure figures.

UTAM also said it will allocate 10% of its endowment portfolio to sustainable and low-carbon investments by 2025 — amounting to an initial commitment of C$400 million. The asset manager also stated it seeks to reach net-zero carbon emissions related to its endowment investments by 2050.

A spokesman for the University of Toronto said its endowment is the largest of any Canadian university.

In a letter also issued Wednesday, Meric S. Gertler, university president, wrote that the “growing severity of the climate crisis now demands bold actions that have both substantive and symbolic impact.”

Mr. Gertler added in the letter that he hopes the university’s decision to withdraw from fossil-fuel investments will “accelerate the transition to a low-carbon economy and inspire other investors to do the same.”

As part of its commitment to become a greener operation, the University of Toronto also said it became the first university in the world to join the United Nations-convened Net-Zero Asset Owner Alliance, an international group of 60 institutional investors seeking to establish net-zero carbon emissions in their portfolios by 2050.

A spokesman for the university confirmed it joined the alliance this month.

“As owners of financial assets such as endowments and pension funds, universities have both an economic imperative and a moral obligation to manage these assets in ways that encourage carbon emission-reducing behavior in the wider economy,” Mr. Gertler wrote in his letter.

As of Dec. 31, 2020, the endowment’s asset mix was 60.1% global equities and 39.9% fixed income — 20.2% in Canadian corporate bonds and 19.7% in Canadian government bonds….”

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