Program & Governance Briefing

September 2015

RE:TA5.10

TAF’s Mission

TAF invests in urban solutions to reduce greenhouse gas emissions and air pollution.

TAF’s Strategic Directions (2015-2020)

Seven strategic directions guide TAF’s grantmaking priorities, investment

strategy and communications initiatives

as we strive for GHG reductions of

30% by 2020

80% by 2050

KEEP EYES ON THE HORIZON

CREATE THE MAP AND COMPASS

TRAVEL WITH OTHERS

MOBILIZE NEW RESOURCES

SEEK INTEGRATED APPROACHES

KEEP EXPLORING

REGIONAL IF NECESSARY, BUT NOT NECESSARILY REGIONAL

TAF’s Strategic Directions (2015-2020)

TAF’s Focus

GHG reduction in:• Buildings• Transportation• Waste

How we work:

• listen to and support local communities (community grants);

• collaborate with a broad range of stakeholders;

• finance entrepreneurs, developers, property owners

• develop and de-risk financing to mobilize public and private capital;

• de-risk low-carbon technologies;

• advance game-changing policies;

• knowledge-sharing

TAF’s Resources: Money

$23 million endowment provided by City of Toronto in 1991.

Investment returns cover most operating expenses -- zero from City’s operating budget.

External funding from governments, foundations – over $5M raised to date

TAF’s Resources: Partners

TAF’s Resources: Volunteers

• Governing Board

• Two Statutory Committees: Grants & Programs, Investment

• Specialized expertise from project partners.

• Pro bono professional services

• Graduate students

• TAF ‘alumni’

TAF’s Resources: Staff

Key Initiatives: TowerWise

Objective: improve the energy efficiency of large buildings via adoption of technologies, policies and financing strategies that accelerate retrofits.

TWEED – 10 demonstration projects

Toronto Green Standard – new construction

Energy Reporting & Benchmarking requirement

Building Value – leveraging Toronto’s leadership

Projects:

Key Initiatives: FleetWise/EV300

Objective: public & private fleets incorporate 300+ electric vehicles.

Results:

• Convened stakeholders in early-days of EVs, including test-drives!

• Business case analysis tool based on real data

• Helped secure provincial subsidy for fleets

• Developed vehicle procurement guidance.

This objective mainstreamed by 2011, with commercial production.

Key Initiatives: Move the GTHA

Objective: secure required public investment in transit and active transportation in the Greater Toronto and Hamilton Area.

Partnerships: collaboration of diverse organizations including Evergreen CityWorks, CivicAction, Pembina Institute, Toronto and Region Board of Trade and 8 others.

Key Initiatives: TransformTO

Partnerships:

• Co-managed and led by TAF and the City’s Environment & Energy Division, in partnership with Toronto Public Health.

• Engage residents, businesses, community leaders, academia, and others in development, evaluation and strategies for taking action.

Objective: using long-range modelling and community stakeholders, engage Torontonians in co-creating Toronto’s pathway to become a low carbon city by 2050

Key Initiatives: Mobilize Financial Capital

2. Efficiency Capital Corp. (ECC)

• TAF incubated this new company that will scale up investment in retrofits using the ESPA.

3. Other innovative financing strategies

• Property-assessed financing – being piloted in Toronto

• Standardized Protocols for retrofit financing requests – grant to MaRS Advanced Energy Centre to explore ‘Canadianizing’ the US Investor Confidence Project.

Objective: Significantly increase public and private capital available for market-transforming greenhouse gas (GHG) reduction initiatives.

1. Energy Savings Performance Agreement

• TAF’s ESPA is a non-debt, insured financial product designed to address key barriers to advancing multi-measure retrofits: lack of confidence in savings/performance and challenges accessing capital.

Impact Investing

Impact investing = investing in keeping with TAF’s mandate, seeking a triple ROI:

Risk-adjusted financial return

Environmental results (GHG reduction)

To demonstrate & de-risk investment opportunities, to mobilize capital for low-carbon solutions

With almost 80% of TAF’s endowment invested for impact,

TAF is a pioneer and leader in this space.

Impact Investing

Statement of Investment Objectives & Principles (SIOP) • Developed by Investment Committee, approved by

Council• Sets out requirement for prudent investing• Establishes investment beliefs

Asset Class Max

(%)

Min

(%)

Fixed Income 100 20

Public Equities 55 0

Direct

Investments

60 0

Private Equities 5 0

• Establishes min/max for each asset class.

• Currently in transition from SIOP 2010 (request to Council in October to adjust asset mix

Impact Investing

• Direct Investments: energy efficiency retrofits, energy efficiency products and services, renewable energy, and other products/technologies with demonstrated GHG reduction potential.

• Marketable Securities: Equities managed by Generation Investment Management and Green Chip Capital; Bonds by TDAM.

• Investment Process:

– Investment Committee of financial experts reviews and recommends all investments

– Board of Directors approves all investments

– Council must approve any transactions exceeding $2 million.

Governance

Toronto Atmospheric Act (2005)• Establishes TAF as a non-share capital

corporation.• Establishes TAF’s legal obligations to

the City of Toronto and Trustee Act.• Delineates the powers of the Board.• Circumscribes terms of the

endowment.• Establishes the Clean Air Partnership as

a charitable entity

By-Law #1• Prescribes TAF’s transaction of business

and other affairs. • Delineates the structure of TAF’s Board

and Committees.

Relationship Framework (2013)• Articulates Council’s objectives

&expectations for TAF; • Positions TAF’s mandate and

operating principles in relation to the City’s strategic objectives.

• Reflects Council’s governance, reporting and accountability requirements.

• Identifies City support to TAF.

Governance

Budget • TAF’s annual Operating budget submitted for review and

approval through Council’s budget process.

Audit• City appoints Auditor• Annual audit examines all assets held by the

Corporation, City Treasurer on TAF’s behalf, and any subsidiaries (ie: CAIT Ventures Inc.)

• Auditor's report must be submitted to the Board later than May 1st of any year.

Questions?