Generation and Greenchip win mandates for assets at innovative Toronto Atmosphere Fund

Fund uses returns to invest in double-bottom line local environmental projects.

Generation Investment Management, the London-based sustainability manager, and Greenchip Financial Corp, the Toronto-based environmental fund manager, picked up mandates to run investments for the city of Toronto’s innovative Atmospheric Fund (TAF), according to newly released documents. The City of Toronto established TAF in 1991 to focus on reducing local greenhouse gas and air pollution emissions. It invests a C$23m (€17.8bn) endowment as an arms-length agency. Its annual report for last year, just published, shows Generation and Greenchip will run part of the fund’s endowment assets on a market basis. Both managers’ focus on reducing greenhouse gas emissions through investment, was, TAF said, integral to their selection for the mandates because of the fit with the fund’s own mission. The remainder of the TAF endowment is used to implement a council-approved climate plan by investing in projects such as street lighting retrofits, traffic light LED conversions, and building retrofits. Toronto says theseinvestments have generated $55m in cost savings on energy alone for the city to date. TAF said its broader investment policy calls for an alignment between the organization’s greenhouse gas emissions reduction mandate and its investments. The fund had previously run the investment assets in-house, but said a combination of equity market volatility and low fixed income product returns had led to its investment portfolio producing below-budget returns in 2011. Julia Langer, CEO of Toronto Atmospheric Fund, said: “These two firms are pioneering a proactive approach by investing in companies that have solid business and sustainability fundamentals or are specifically focused on low-carbon solutions like energy efficiency and clean energy. As a prudent, mandate-driven impact investor, that is exactly what TAF was looking for.”
TAF is a founding member of the Carbon Disclosure Project and a signatory to the UN-backed Principles for Responsible Investment.