U of T divesting $4 billion endowment from fossil fuel investments

TORONTO—The University of Toronto (U of T) will divest its $4 billion endowment from investments in fossil fuel companies by the end of 2030, the president of the university Meric Gertler announced recently.

Gertler also announced the university’s target to cut the net greenhouse gas emissions from its endowment portfolio to zero by 2050. The University of Toronto Asset Management (UTAM) will also allocate 10 per cent of the endowment portfolio to sustainable and low-carbon investments by 2025 and based on the current size of the endowment, this represents an initial commitment of $400 million to such investments, indicates a release.

The university’s investment manager has also joined the UN-convened Net-Zero Asset Owner Alliance making U of T the world’s first university to join.

The alliance has established a framework to guide its members towards the 2050 net-zero objective which includes setting ambitious five-year targets, and alliance members must report regularly on their progress towards these targets.

Other UTAM commitments include:

• To divest from all direct investments in fossil fuel companies within the next 12 months;
• to divest from indirect exposure to investments in fossil fuel companies, typically held through pooled and commingled investment vehicles, by 2030;
• to continue to engage with current and prospective asset managers to emphasize GHG emissions reduction in their portfolios and climate impact in the real economy;
• to work with peer asset owners and investment managers to drive industry-wide commitment to net-zero; and
• to report to stakeholders regularly on the progress towards divestment and net-zero goals

“At UTAM, we continue to intensify our focus on responsible investing. Divestment from fossil fuel companies and net-zero carbon emissions for the endowment are the next steps in the journey that we began in earnest in 2016, when we became a signatory to the Principles for Responsible Investment on behalf of the university’s endowment and pension portfolios,” said Chuck O’Reilly, UTAM’s president and chief investment officer, in a statement.

“Responsible investing is integral to our mission, and we hope that our commitment to divestment and net-zero inspires other institutional investors to support the transition to a lower-carbon economy.”