Climate Commitments

UTAM is committed to divesting from investments in fossil fuel companies in the Endowment portfolio. This process began in October 2021 with two related divestment commitments: 

• The Endowment portfolio will be fully divested from all direct investments in fossil fuel companies within one year of the divestment announcement. 
• For those investments made indirectly – typically through pooled and commingled vehicles managed by third-party fund managers – UTAM will divest the Endowment from its investments in fossil fuel companies by no later than 2030. We will also report regularly to stakeholders on our progress towards this goal. 

Eliminating direct exposure: UTAM achieved the first commitment – divesting from all direct investments in fossil fuel companies – in 2022, within the target timeline.

Reducing indirect exposure: We also implemented notable changes in the Endowment, which together have reduced indirect exposure from 2.0% of the Endowment’s net asset value at December 31, 2021 to 0.5% of the Endowment’s net asset value at December 31, 2025.

Identifying low-carbon strategies: We continue working to identify new low-carbon strategies that exclude investments in fossil fuel companies. We also consider fossil fuel-free strategies managed by our existing managers and work with those managers to launch new strategies that will further reduce the Endowment’s exposure to carbon and fossil fuel companies. 

Adopting Reference Portfolio indexes free of fossil fuels: To better align our efforts with the university’s divestment initiative, we have transitioned the Reference Portfolio’s asset class benchmarks to indexes that exclude fossil fuels.  

Aligning EFIP with U of T climate objectives: Although the divestment initiative is focused on the Endowment, UTAM also implemented changes to EFIP in 2022 to align its investment strategy with the university’s climate objectives. Since 2022, EFIP has not had any direct exposure to fossil fuel companies and indirect exposure to fossil fuel companies has been divested.

Included in the university’s 2021 divestment initiative was a commitment for UTAM to allocate at least 10% of the Endowment portfolio to sustainable and low-carbon investments by 2025. We achieved this target during 2024, and at December 31, 2025, 17.3% of the Endowment’s net asset value was invested in such strategies. We are committed to maintaining the targeted threshold level of investment in sustainable and low-carbon strategies over the long term and we continue to source and assess new investment opportunities in such strategies.

A key component of the University of Toronto’s 2021 climate announcement is the commitment to net zero emissions in the Endowment portfolio by 2050. This commitment coincided with UTAM joining the Net-Zero Asset Owner Alliance. The Alliance has established a framework for setting interim targets on various decarbonization initiatives to guide members in achieving net zero emissions in their portfolios by 2050. In accordance with the Alliance’s Target Setting Protocol, in 2022 UTAM established interim targets with respect to emissions, engagement and transition financing. 

Emissions targets

This target, measured in tonnes of CO₂ equivalent per million dollars invested (tCO₂e/$M), includes the impact of carbon contributions from equities (including equity-like assets) and corporate bonds. 

UTAM’s new carbon footprint target builds on the successful achievement of our previous carbon footprint goal. In 2019, we committed to reducing the carbon footprint of the equity and equity-like sub-portfolio of the Endowment by 40% compared to 2017 levels by 2030. We met this target – almost a decade ahead of schedule. 

We share with the Alliance the belief that engagement is a critical tool to drive the transition to net zero in the real economy. Engagement has been an important component of UTAM’s responsible investing framework for many years and it will continue to be significant going forward. In 2022, we set interim engagement targets for 2025, consistent with the Alliance’s Target Setting Protocol, and we achieved these goals on schedule. We have set new interim engagement targets for the 2030 interim period as required under the updated Target Setting Protocol:

• To actively engage – through collaborative initiatives and our engagement service providers – with 10 public companies, focusing on those that are the world’s largest corporate GHG emitters and those that contribute to the most owned emissions in the Endowment portfolio.

• To engage directly with 25 incumbent and prospective investment managers on net zero by 2050 initiatives.

The Alliance’s Target Setting Protocol includes a pillar addressing financing transition. This focuses on assessing climate solution investments, as well as enhancing the supply side of climate solutions and supporting the growth in climate solution investments within Alliance members’ investment portfolios. 

Our targets in relation to this pillar are qualitative. Having joined a working group of the Alliance’s Financing Transition Track, we support its objectives and stay well informed about this rapidly evolving initiative.

At the end of 2025, the carbon footprint of the Sub-Portfolio (as defined in the report) was 18.1 tCO₂e/$M (based on total emissions of 67,978.3 tCO₂e).  

The 2025 carbon footprint calculation and results are available in the Reports section of our website.