Divestment announced at the U of T Governing Council

At yesterday’s meeting, President Gertler announced the new divestment policy. I transcribed the relevant parts of the meeting from the audio:

[16:58] President Meric Gertler: With the latest UN climate change conference, known as COP26, taking place in Glasgow beginning this Sunday, the world’s attention will be focused on the urgency of the climate crisis and measures to address it. In anticipation of this meeting I wrote to our community yesterday providing an update on the university’s approach to investment, operations, and engagement and announcing some new measures to help tackle the huge challenge of climate change. In particular I announced that UTAM will be divesting from its fossil fuel holdings in our endowment — a fund that in total is about $4 billion including some other long-term investments — and that divestment process will begin immediately.

UTAM undertakes to fully divest from direct investments in fossil fuels by the end of 2022, so roughly within the next 12 months. And moreover to divest from indirect investments in fossil fuels, that is in the form of pooled and co-mingled funds that are managed by third-party investment managers, as soon as possible and by no later than 2030. Also, to allocate at least 10% of the endowment, so roughly about $400 million, towards sustainable, low-carbon, and green investment strategies by 2025. And to achieve net-zero emissions in the endowment portfolio by 2050. Related to that last goal, UTAM has become the first university asset manager, and University of Toronto the first university in the world, to join a group called the Net Zero Asset Owner Alliance: an alliance which requires us to set and meet five year targets, increasingly stringent, targets that lead us towards the net zero objective by 2050 at the latest.

[18:55] These new commitments build on the tremendous progress already achieved by UTAM to reduce the carbon footprint of its long-term investments by 37% as of this past June 30th. That’s against a 40% reduction goal that it had set for itself by 2030. And in this case the carbon footprint is measured as tonnes of CO2 equivalent emissions per million dollars invested. Over the same period UTAM has also shrunk absolute carbon emissions in its portfolio by more than 21%. These reductions have resulted from UTAM’s use of an ESG framework to assess all of its long-term investments in the energy sector, but also across the rest of the economy. The sectors of manufacturing, retail, transportation, construction, and agriculture. Having made this much progress this quickly, and having reduced fossil fuel holdings to roughly 6% of our long-term investments.

The time was right to set new goals, to decarbonize our investments still further. We hope that these actions will inspire other institutional investors and governments at home and abroad to take similar actions, and to accelerate the transition to a low carbon economy as they tackle the challenge of climate change. These announcements will complement U of T’s other ambitious plans to fight climate change, including our new climate positive St. George campus plan, which Governors heard about back in the September workshop, a plan that will convert the campus into a net carbon sink by 2050. Our local, national, and global leadership organizations and initiatives like the Canadian Universities’ Climate Charter, the UC3 group of North American universities, and the U7+ global alliance of universities, each of which is working on climate-change-related initiatives.

[21:02] A lot of this work has been championed by our very own Committee on the Environment, Climate Change, and Sustainability, co-chaired by Professor John Robinson and Ron Saporta. For example, pioneering the development of sustainability pathways that students can pursue in any program of study, as well as making available opportunities for students to engage in campus-as-a-living-lab experiences where they can engage in climate-related experiential learning opportunities. And of course this also is complemented by the tremendous amount of research being done across our three campuses, supporting the United Nations Sustainable Development Goals, for example we have a new institutional strategic initiative focused on climate-positive technologies, the development and application of energy-saving technologies and practices.

[21:57] So this is, I think you will agree, a comprehensive effort on our part, kind of a watershed moment in the history of the university, and I think contributing to a very important moment in the history of the world. I will say that since the announcement was made yesterday, the response thus far has been overwhelmingly positive. Let me shift to a couple of other items… [ends at 22:20]

[54:00] Meric Gertler: Shashi Kant, I see you have your hand up so we’ll go to you next.

[54:04] Shashi Kant: Thank you Chair, and thank you so much Meric and Trevor for updating us on everything. So first of all, I just want to express Meric on behalf of all my students, and myself, and the staff your leadership in climate change and for the investment and the carbon sink announced, and I think we and our students proudly can say the university walk the talk in terms of sustainability, it’s not that we are talking about sustainability. Also there is the carbon sink only for the St. George campus, I guess the other two campuses will also join on that point soon.

[54:50] I am moved, I am happy with our policy and our commitment for climate change. I am also disturbed, very disturbed on approach to sexual harassment… [ends at 55:05]

[1:03:00] Meric Gertler: Susan, I think you are up next.

Susan Froom: Thank you, and thank you as well to yourself and President Gertler for your reports. I do echo Shashi’s concerns around harassment, I’ll speak to that next item , but now I do want to say thank you to President Gertler for your wonderful announcement yesterday around divestment from fossil fuel investments. It’s a fantastic step forward, I’m glad the university is doing that, and I am very much hoping that U of T will continue to be a leader in this regard and particularly with President Gertler’s latest appointment that may be even easier to do, let’s hope so.

[1:04:10] I also wanted to acknowledge that in the announcement President Gertler did pause to thank the students that pushed the administration to do the right thing, and I just wanted to recall before this body that it was back in March of 2014 that it was the U of T chapter of 350.org that first put this issue on the table formally. There has been a lot of back and forth since then. In some ways President Gertler and the administration went beyond what was asked, which is admirable. In some ways, not as far, which is one reason the challenge kept coming. So it’s something that I think we as a body need to feel good about. This is part of what Governing Council does, it’s a place where these ideas can come forward, can be brought to fruition. Where it allows student activists to bring forward their ideas and the administration to carefully ponder them and implement them. So kudos all around and let’s keep this fight going. [end at 1:05:28]

[1:59:22] Speakers unknown: Thank you Mister Chair. The board received a comprehensive presentation on the [fundraising / development] campaign’s academic priorities and its goals. As part of the ensuing discussions, Mr. Palmer addressed a member’s concern about investment of endowment funds in the fossil fuel industry. Mr. Palmer stated that the campaign would pursue funding for a wide range of academic priorities related to climate change and sustainability, including those referenced earlier in the meeting such as clean tech, climate policy, climate science, etc. He also noted that students were the primary beneficiaries of campaign funding priorities and donations. In response to another member’s question about whether the university’s endowment policies related to fossil fuel divestment would have an impact on fundraising results, Mr. Palmer stated that to date they have not diminished the university’s ability to raise funds and he expected that track record of success would continue into the public phase of the new campaign. That concludes my report. [ends at 2:00:27]