The University of Toronto joined the ranks of institutions making climate pledges when it committed to divest all direct financing for fossil fuel companies in the next 12 months and withdraw all indirect financing by 2030.

“The growing severity of the climate crisis now demands bold actions that have both substantive and symbolic impact,” President MericGertler said in a letter, reports U of T News. “When a large institution like the University of Toronto decides to take such steps, it is our belief that this will both accelerate the transition to a low-carbon economy and inspire other investors to do the same.”

The university’s asset management corporation is also committing to direct 10% of its C$4-billion endowment portfolio to sustainable and low-carbon investments by 2025. The institution plans for its endowment-associated emissions to reach net-zero, and to make its St. George campus climate-positive, by 2050.

U of T is just one entity in a growing list of institutions, corporations, and governments announcing climate pledges in anticipation of next week’s COP 26 summit and it builds on a rising trend in the investment community to support climate action. Recently, 36 institutional investors in Canada—including five of the country’s largest banks—signed a new Canadian Investor Statement on Climate Change.

The statement “makes clear the actions major Canadian investors will take to advance the global pursuit of net-zero ahead of the most important climate gathering in history–COP 26. This includes disclosing their financed emissions and setting an expectation that their investees will establish emissions targets and report on their progress,” reports Business Wire.

But not all the signatories plan to address climate change by divesting. 

“We don’t want to leave the table. We don’t want to disinvest to disinvest. We already have contracts that have been signed in the last few years with some of these entities and companies,” Guy Cormier, chief executive officer of Desjardins Group, told The Globe and Mail. Instead, he said Desjardins plans to provide clients with advice on reducing emissions.

The investor statement also includes a commitment to incorporate Indigenous perspectives and ensure that decarbonization strategies do not economically jeopardize their communities. Mark Sevestre, founding member of the National Aboriginal Trust Officers Association, said Indigenous investors are now exercising their shareholder voices within companies to make sure that, with partnership and consultation, their communities’ interests are served.

“Having our voice reflected in this statement is incredibly important,” he told the Globe.

Since the 2015 Paris agreement, G20 governments have tripled public financing for fossil fuel projects. But investing in fossil fuels needs to stop now, say two institutional finance experts.

“This year’s catastrophic storms, floods, and wildfires have shown why we need climate action now, not later. And because future prosperity lies in clean energy investment, there is also a clear economic development case for redoubling our efforts,” write Werner Hoyer, president of the European Investment Bank, and UK COP 26 envoy John Murton, in Project Syndicate.

Hoyer and Murton say the COP offers an opportunity for governments and corporations to work together to enact more pledges like U of T’s.

“We now must build on this momentum to ensure that COP 26 is a success,” they write. “More commitments are needed to align international public support fully with the Paris goals. We can achieve the necessary solidarity by bringing governments and public finance institutions together behind a joint statement proclaiming support for clean energy and a phaseout of fossil fuels.”