Money and mission can go hand-in-hand

Posted on April 24, 2012 by Julia Langer

Toronto Atmospheric Fund (TAF) has selected two sustainability-focused firms to manage the equity portfolio of our endowment fund.  Award-winning Generation Investment Management LLP, co-founded by former U.S. Vice-President Al Gore, is a research-driven fund with $6.9 Billion under management.  Greenchip Financial Corp. is a Toronto-based firm specializing in environmentally-responsible investments.  

TAF does not believe that financial returns must be sacrificed for environmental impact.  The data increasingly indicate that investing with consideration to carbon and environmental risk factors can be expected to improve the risk/return profile of portfolios in a climate-stressed, carbon-constrained world. TAF’s investment policy calls for an alignment between the organization’s greenhouse gas emissions reduction mandate and its investments.   

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.   Both firms were selected based on their success in delivering strong returns, as well as their focus on sustainability — economic, environmental, social and corporate governance factors – that will drive down carbon and drive up financial returns over the long term.  As a prudent, mandate-driven impact investor, that is exactly what TAF was looking for. .

Since 1991 TAF has managed a $23 million endowment provided by the City of Toronto to support the reduction of air pollution and greenhouse gas (GHG) emissions in the city.  During that time, TAF has invested and maintained the endowment while using the earnings to support a wide variety of local climate solutions.  Projects supported by TAF have helped the City of Toronto save more than $55 million to date on its energy costs.  TAF operates at no cost to city taxpayers.

In addition to investments in marketable securities, a separate portion of TAF’s endowment is dedicated to financing local companies’ projects that yield a double bottom line: market rate of return on investment and GHG emission reduction.   For instance, TAF has provided loans for construction of energy efficient condominiums, energy efficiency retrofits of high-rise and institutional buildings, installation of solar hot water systems, renewable energy facilities and upgrading of street and laneway lighting.  A volunteer blue-chip investment committee guides TAF’s investment strategy and supports the organization’s impact investing innovation and leadership.

TAF is a founding member of the Carbon Disclosure Project, a rapidly growing group of companies and investors that provide and use information about carbon risk exposure and a signatory to the Principles of Responsible Investing developed by the United Nations Environment Program.

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Financing Energy Efficiency: 3 buildings, 3 solutions

Posted on April 23, 2012 by Bryan Purcell

With over 50% of Toronto’s GHG emissions resulting from energy-use in buildings, financing energy efficiency in the built environment has become one of TAF’s core priorities. While capital costs are sited as the number one barrier to energy efficient buildings, there are financial solutions which can meet the needs of almost any building owner/operator. Three recent TAF transactions, each with a different structure, illustrate a range of approaches.

The brand new M5V condominium in downtown Toronto, developed by TAS DesignBuild, features close to $1M  in energy performance upgrades, largely funded by a TAF Green Condo Loan. The loan covers the incremental cost of dramatically exceeding building code efficiency requirements, and will be repaid by the condo corporation using the expected utility bill savings of over $150K per year. Energy efficiency measures include high efficiency HVAC equipment, building automation, and smart lighting controls, which combined together will reduce GHG emissions by 500 tonnes every year!

On the other end of the spectrum, 5 Old Sheppard, one of the first purpose built Condominiums built in Toronto, has just completed a major energy retrofit with financing from TAF. Continue reading →

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LightSavers Goes National

Posted on April 3, 2012 by Bryan Purcell

Cities and companies across Canada can now tap some brighter ideas for energy efficient lighting as the LightSavers program is taken national by the Canadian Urban Institute (CUI).  TAF incubated the LightSavers program, which collected rigorous data from advanced lighting trials in five GTA municipalities, including, of course, Toronto.  The results demonstrated that LED lighting combined with advanced controls like motion sensors could cut the energy demand of lighting by 50-70%.  Through public perception research, we also found that people actually found bright LED lighting a big improvement on roadways and in parking garages and, somewhat surprisingly, were quick to embrace adaptive controls like motion sensors.  People reported that they found that these controls actually enhanced their sense of safety by making it clear whether there were others in an area.  Now CUI will build on the work begun by TAF by reaching out to a broader range of large commercial lighting users as well as municipalities  – everyone from shopping malls and airports to parking garages and theme parks.  The timing is great with the technology rapidly maturing and cities ranging from Los Angeles to Tianjin China already installing LED lamps by the thousands.

As we pass the LightSavers torch to CUI, I want to take a moment to thank all of the partners which made our GTA LightSavers program so successful. We couldn’t have achieved what we did without our pilot project hosts, including the City of Mississauga, City of Hamilton, Town of Caledon, Toronto Community Housing & Exhibition Place. And the program would not have been possible without the generous support of Natural Resources Canada, the Ontario Power Authority, the Federation of Canadian Municipalities, and other supporters too numerous to name.

While it is difficult to watch the LightSavers program leave the nest, we are excited to be turning our attention to new projects and have full confidence that we leave the program in great hands with CUI!

 

 

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Avoiding grid infrastructure costs with…conservation

Posted on April 2, 2012 by Julia Langer

The state of Toronto’s electricity infrastructure has been the focus of attention recently, especially the aging wires and transformers and the fraught application, decision, reaction, re-application involving Toronto Hydro and Ontario Energy Board.  Here’s what Con Edison – a large, analogous utility servicing parts of New York including Manhattan — did a few years back when faced with an expensive upgrade of the grid.

Instead of building new infrastructure, Con Edison decided to reduce load. The initial pilot was successful in reducing 47MW so the target was raised to 149MW.  Most of the savings came from lighting retrofits. Because conservation is always cheaper than supply, they save $223 million on infrastructure – that’s avoided cost.  The program has shaved over $200 million off customer’s energy bills as well. 

The modus operandi was mainly via Energy Service Companies (ESCOs) who recruited the customers/energy savers (mainly commercial and industrial operations), implemented the conservation measures (mainly lighting), and aggregated  the savings.  They get paid by the utility only after inspection showed actual savings.  There were sub-grid targets and peak & non-peak targets to meet.

Another example is a very intensive, door-to-door campaign to avoid the need for new transformer vaults in a four block zone of Manhattan which saved at least $500,000 in capital costs.

Several papers on this program indicate the hard part was deciding to use demand management instead capital improvements — if energy efficiency doesn’t deliver, there won’t be enough sufficient transmission and distribution capacity, ie: the lights go out.  As a UC Davis paper states, “Nevertheless…Con Edison chose not to hedge its bets by continuing the T&D planning and implementation process in parallel with the program. Instead, energy efficiency was considered as a valid alternative to system reinforcement in the planning process, and, where cost effective, was the sole solution implemented.”  Bravo!

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The mapping medium is the carbon message

Posted on March 30, 2012 by Mary Pickering

When faced with a huge global issue like climate change, it sometimes feels impossible to understand all the important elements of the issue. But just in time, geography comes to the rescue. Check out the interactive map at www.carbonmap.org. This fascinating website uses an animated, interactive world map to help convey how different countries fit into the climate change picture, both in terms of contributions to climate change and risk of being affected by climate change. To give a more nuanced picture, the site has assembled various data sets to show where carbon is extracted, where emissions occur, and were the resulting goods and services are consumed. In addition to current information the map also contains historical data to show how cumulative emissions contributions work, plus information about reserves to show what may be happening in the future.

The carbon.org website has been created by Duncan Clark and Robin Houston of Kiln as an entry for the World Bank’s Apps for Climate competition.

More visuals like this on smaller regional scales could go a very long way towards building public understanding and support for the local actions we need to take to address climate change in our local communities, and how they should be prioritized given ever-shrinking resources.

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