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U of T, other universities form coalition to strengthen engagement and reduce climate-related risks in their investment portfolios

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(photo by Nick Iwanyshyn)

The University of Toronto is joining forces with other Canadian universities to engage with companies to address investment risks associated with climate change.

The will engage with companies that are held in its members鈥 investment portfolios. Its largest founding member is the University of Toronto Asset Management Corporation (UTAM), which manages U of T鈥檚 pension, endowment and short-term working capital portfolios, valued at around $13 billion.

The initiative will be , a non-profit organization that specializes in responsible investment services, and will focus on sectors where advocacy can make the biggest impact, including finance, transportation, energy and utilities, and manufacturing.

Daren Smith, president and chief investment officer of UTAM, said the new initiative will be an important part of its overall , which integrates environmental (including climate change), social and governance factors into investment analysis and decision-making.

鈥淚t is critical that we take action to address climate risks,鈥 Smith said. 鈥淯NIE 鈥 a program designed for Canadian universities, with input from Canadian universities 鈥 provides an opportunity for us to help mitigate the impact in our investment portfolios.鈥

UNIE鈥檚 other founding members include: Carleton University, Concordia University, McGill University, McMaster University, Mount Allison University, Universit茅 de Montr茅al Pension Plan, the University of Victoria and York University, as well as the University of St. Michael鈥檚 College at U of T.

鈥淯niversities have a vital role to play in the fight against climate change, through our teaching, our research, our operations and our investments,鈥 said U of T President Meric Gertler.

鈥淭hrough initiatives like UNIE and the Investing to Address Climate Change charter, U of T and other Canadian universities are taking concerted action that ultimately will help to reduce greenhouse gas emissions and protect the planet.鈥

By banding together through initiatives such as UNIE, universities will be much more likely to influence behaviour at companies, according to Smith.

鈥淚f you鈥檙e a smaller investor or not invested in a company at all, it鈥檚 less likely they will pay attention to you,鈥 he said. 鈥淥ur engagement efforts will have a greater impact if we have more institutions and capital working together.鈥

UTAM鈥檚 decision to join the new climate change initiative is the latest in a series of moves to decisively address climate change. In early 2020 for example, UTAM committed to reducing the carbon footprint of its pension and endowment portfolios by 40 per cent by 2030, using 2017 levels as the benchmark.

U of T鈥檚 pension and endowment fund manager is already well on its way to achieving the objective. The pension portfolio鈥檚 year-end 2019 carbon footprint of 109.3 tonnes of CO2 equivalent per million dollars invested represents a 21.5 per cent reduction compared to 2017, according to UTAM鈥檚 most recent annual report.

UTAM is also a founding participant of Climate 100+, an investor-led initiative to engage the world鈥檚 largest corporate greenhouse gas emitters to ensure they take necessary action on climate change.

Now, by forming a coalition, universities will have another way to make their voices heard on important climate issues, said Kevin Thomas, chief executive officer at SHARE.

鈥淭hese universities are showing leadership in addressing the climate crisis,鈥 he said in a statement. 鈥淲orking together in one program amplifies each institution鈥檚 voice and leverages their power to bring about change.

鈥淭he actions taken by institutional investors today will play a crucial role in determining how society fares in the face of climate change.鈥

 

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