Impact investing is a form of socially-responsible investing that can guide investment strategies. TAF’s impact investments generate a measurable, beneficial environmental impact – reduced greenhouse gas emissions – in addition to a risk-adjusted rate of return. We target a market rate of return.
The Atmospheric Fund is committed to investing its endowment in a way that directly supports our mission. We realize that how we invest our assets is as important a part of solving the climate crisis as how we spend our investment earnings. Consequently, TAF deploys its capital with an eye on two bottom lines: a strong financial rate of return and environmental results.
All of our investments are guided by our City Council–approved SIOP – the Statement of Investment Objectives and Principles – overseen by TAF’s volunteer investment committee comprising leading finance industry professionals. In addition, TAF adheres to the United Nations Environment Program’s Principles of Responsible Investing.
Currently, nearly three-quarters – 70% – of TAF’s endowment is invested for impact, making TAF a pioneer and leader in the Canadian investment community. Our priority focus area is financing energy efficient measures in high-rise residential buildings, although transactions that meet TAF’s criteria yet are not in the building sector are also considered. For instance, TAF made a significant impact investment in the Investeco Sustainable Food Fund, which invests in primarily Canadian-based companies that promote sustainable food production and agricultural practices. These businesses hold great carbon reduction potential as their core operations entail the use of non-petroleum-based products and use renewable energy sources.
Through our investments and financing approach, we can demonstrate the value of investing in community projects that address climate change and turn a profit. TAF earns a positive financial return and achieves our mission by being at the forefront of low-carbon impact investing. For instance, TAF’s Green Condo Loan, developed in collaboration with Tridel, gives condo developers access to capital to pay for implementing energy efficiency measures. Tridel applied the loan to its Nuvo II building, achieving at 41% reduction in energy consumption compared to a conventionally built sister building while also saving $125,000/year in energy costs. The drop in energy use is equivalent to a 550-tonne reduction in yearly greenhouse gas emissions.
TAF has been widely recognized for leadership in the impact investing sector, winning Special Commendation at the prestigious 2014 FT/IFC Transformational Business Awards in the Achievement in Transformational Finance category and a nomination for the 2013 Scotiabank EcoLiving Innovator’s Award for our Energy Savings Performance Agreement.
TAF’s blue-chip committee of financial experts reviews TAF investments, and transactions in excess of $2 million are additionally reviewed by City Council. TAF is the only Canadian client of one of the leading global climate investment firms – Generation Investment Management – and a key client for a local green investment firm.