Toronto-based asset management firm RPIA, in collaboration with UTAM, has launched a new, actively managed credit strategy that excludes fossil fuel exposure from the portfolio. The University of Toronto’s endowment is the seed investor in this new product: RP Broad Corporate Bond (Fossil Fuel Exclusion).

“At RPIA, our hallmark is to work in partnership with our investors to develop leading-edge solutions and help them achieve their investment objectives. The RP Broad Corporate Bond (Fossil Fuel Exclusion) strategy is the latest example of our collaborative relationship with the University of Toronto and its investment manager, UTAM,” says David Matheson, Principal and Co-Chief Investment Officer at RPIA. “We are proud of the work we’ve done together with UTAM to develop a strategy that aligns with the University’s climate objectives, and we’re excited to offer this compelling solution to help other institutions deliver on their ESG goals.”

Following University of Toronto President Meric Gertler’s announcement of fossil fuel divestment targets in October 2021, UTAM has been active in evaluating and is now beginning to implement strategies to meet those targets.

“We actively seek to identify strategies that can meet the University of Toronto’s carbon reduction goals,” says Leon Lu, UTAM’s Head of Fixed Income. “This new collaboration with RPIA builds on our long-standing and mutually beneficial relationship – and this new fossil fuel exclusion strategy helps us fulfill the University’s climate objectives.”

The strategy is benchmarked against the FTSE Canada All Corporate Ex Fossil Fuels Enhanced Bond Index, a newly launched index by FTSE Russell that excludes fossil fuel issuers from the investment universe.

“UTAM strives to be a leader in responsible investing. We have been taking action, through our partnerships with investment managers including RPIA and through other initiatives, to meet the University’s divestment targets,” says Chuck O’Reilly, UTAM’s President and Chief Investment Officer. “We are pleased to develop this ex fossil fuel strategy with RPIA, which is also available to other like-minded investors; collectively we can better achieve the transition to a low carbon future.”