Our Commitment to Responsible Investing
As we invest the University of Toronto’s assets for the long term, UTAM integrates environmental, social and governance (ESG) factors into various aspects of our investment and risk management, including decision-making, manager selection, stewardship activities (through engagement, proxy voting and advocacy) and reporting and disclosure.
As we’ve steadily intensified our focus in this area, UTAM has taken on leadership roles in responsible investing organizations and initiatives, and we work with other institutional investors to identify, shape and promote best practices.
You’ll find information on our responsible activities integrated throughout this website, particularly in the sections on Investing, Managing Risk and Stewardship. Here are some quick links to sustainability-related topics:
Responsible Investing Policy
PRI Principles: Scorecard & Actions
Stewardship
Climate Risk
UN-convened Net-Zero Asset Owner Alliance
Climate Commitments
Carbon Reduction Targets
Collaboration & Affiliations
You can also download current and past UTAM reports:
Integrated Annual Reports (2022 onward)
Responsible Investing Reports
PRI Assessment and Transparency Reports
Carbon Footprint Reports
TCFD Reports
Sound investing is, by definition, responsible investing.
UTAM’s investing reflects our belief that ESG considerations, including climate change, can have a material impact on an investment’s risk and return. We also believe that these considerations are particularly relevant for portfolios that have a long-term investment horizon, such as the Endowment.
ESG Factors Defined
Environmental
Factors relating to a company’s interactions with the physical environment. These include but are not limited to climate change; greenhouse gas emissions; biodiversity loss; deforestation; air, water or resource depletion or pollution; waste management; change in land use; and ocean acidification.
Social
Factors relating to business practices that have an impact on the rights, well-being and interests of people and communities. These include but are not limited to human rights; labour standards in the supply chain; child, slave and bond labour; workplace health and safety; freedom of association and freedom of expression; human capital management and employee relations; diversity; relations with local communities (including indigenous communities); activities in conflict zones; health and access to medicine; consumer protection; and controversial weapons.
Governance
Factors relating to the governance of a company. These include but are not limited to board structure, composition, size, diversity, skills and independence; executive pay; shareholder rights; stakeholder interactions; transparency; business ethics; bribery and corruption; internal controls; and conflicts of interest.
Carbon Reduction and Divestment
UTAM’s focus on responsible investing both reflects and helps to advance the broader transition to a lower-carbon economy. As the global response to climate change becomes increasingly urgent, the University of Toronto has joined organizations worldwide in embracing carbon reduction and divestment as crucial steps in the effort to advance all aspects of sustainability. Reinforcing U of T’s leadership in this area, UTAM committed to reduce the carbon footprint of equity and equity-like investments by at least 40% by the end of 2030, compared to 2017 levels. By the end of 2020, we met this target – almost a decade ahead of schedule.
In October 2022, UTAM announced a new carbon footprint target for the equity (and equity-like) and corporate bond component of the Endowment portfolio – a 50% reduction by 2030, using 2019 baseline levels. This is an interim target on our way to achieving net zero carbon emissions for the Endowment portfolio by 2050.
As part of the University’s commitment to decarbonization, UTAM will allocate at least 10% of the Endowment portfolio to sustainable and low-carbon investments by 2025.
We are also committed to divesting from investments in fossil fuel companies. The Endowment portfolio is fully divested from all direct investments in this sector. For those investments made indirectly – typically through pooled and commingled vehicles managed by third-party fund managers – UTAM will divest from its investments in fossil fuel companies by no later than 2030. Although President Gertler’s divestment initiative focused on the Endowment, UTAM has already implemented changes that have eliminated all material indirect exposure to fossil fuel companies in EFIP. (EFIP did not have any direct exposure to fossil fuel companies, and this continues to be the case.)
Carbon Footprint Reports
As a signatory to the Montréal Carbon Pledge, UTAM has committed to measuring and disclosing the carbon footprints of U of T’s Endowment portfolio.
Stewardship
UTAM is an active owner, meaning that we bring a responsible investing view to the exercise of shareholder voting rights, our engagement with public companies, collaborations and affiliations, and our advocacy efforts.
Principles for Responsible Investment (PRI)
In December 2016, UTAM became a signatory in support of the PRI, a set of six aspirational principles designed to encourage and assist investors in integrating ESG issues into their investment processes.
Responsible Investing Policy
Our comprehensive Responsible Investing Policy is designed to guide all of UTAM’s decision-making in this area and covers topics including our internal processes, proxy voting, engagement, advocacy and transparency. The policy applies to all of our assets under management.
Responsible Investing Committee
The Responsible Investing Committee oversees all matters relating to the development and implementation of UTAM’s responsible investing practices. The Committee is composed of senior leaders at UTAM and typically meets quarterly.
Responsible Investing Affiliations
We believe that our impact is magnified when we join forces with like-minded investors. UTAM collaborates with other responsible investors on joint initiatives and advocacy efforts across Canada and around the world.
Responsible Investing Reports
Our responsible investing reports provide an in-depth look at how we consider environmental, social and governance (ESG) factors in our investment analysis and decision-making processes, and how we undertake active ownership.