Minutes Confirmed on February 10, 2023

This meeting of the Board of Directors of the Toronto Atmospheric Fund was conducted with members participating in person and remotely.

The Board of Directors of the Toronto Atmospheric Fund received the item for information.

This report provides an update on Toronto Atmospheric Fund initiatives with regard to Governance Matters, Staff and Operational Matters, and Strategic Programs.

The Board of Directors of the Toronto Atmospheric Fund:

1.  Approved the 2023 Consolidated Operating Budget as presented in Attachment 1 to the report (October 20, 2022) from the Director of Finance, Toronto Atmospheric Fund.

Toronto Atmospheric Fund’s 2023 Operating Budget is presented for Board consideration and approval. This is a balanced and self-financed budget, with zero impact on the City’s budget.

Revenue for 2023 has been budgeted based on: a projected annual return on the marketable securities portfolio which the Investment Committee considers appropriate; the expected returns on the current book of direct investments and estimated return on additional direct investments during the course of the year; and committed external funding, which has significant potential to be exceeded. The portfolio revenues are lower than 2022 as the net asset value has been eroded due to current market conditions, but the external revenues are higher due to TAF’s success in attracting support for various projects.

Expenditures budgeted for 2023 are based on: the projected revenues including investment proceeds and external funds, with attention to the minimum grant and maximum administrative expense requirements and compliance with the Payout Ratio established to protect the endowments.

The 2023 Annual Plan to advance climate solutions for the Greater Toronto and Hamilton Area (GTHA) will be presented to the Board at the first meeting of 2023 and will be crafted in keeping with the approved 2023 Operating Budget.

The Board of Directors of the Toronto Atmospheric Fund received the item for information.

The unaudited financial results for six months ended June 30, 2022 (Second Quarter) are provided in Attachment 1.

The Board of Directors of the Toronto Atmospheric Fund:

1.  Deferred the consideration of the item until the next meeting of the Board of Directors of the Toronto Atmospheric Fund.

The report recommends delegation of approval of terms and conditions for Energy Savings Performance Agreements (ESPA) under the previously-approved financing for Efficiency Capital to Toronto Atmospheric Fund’s Direct Investment Committee. This ‘housekeeping’ change mirrors the original delegation to the Investment Committee as the newly-established Direct Investment Committee did not exist at the time.

The Board of Directors of Toronto Atmospheric Fund:

1.  Rescinded approval of the Investment and the hiring of a Fixed Income Manager, as set out in parts 1 and 2 of Item TA8.7 – Request for Investment and Hiring of a Second Fixed Income Manager, considered by the Board on July 27, 2020.

Rescission of a previous approval to hire a second Fixed Income Manager is recommended.

The Board of Directors of the Toronto Atmospheric Fund received the item for information.

Minutes from the Direct Investment Committee meeting held on May 5, 2022.

The Board of Directors of the Toronto Atmospheric Fund received the item for information.

Minutes from the Direct Investment Committee meeting held on June 27, 2022.

The Board of Directors of the Toronto Atmospheric Fund received the item for information.

Minutes from the Direct Investment Committee meeting held on August 4, 2022.

The Board of Directors of the Toronto Atmospheric Fund received the item for information.

Minutes from the Direct Investment Committee meeting held on August 9, 2022.

The Board of Directors of Toronto Atmospheric Fund:

1.  Approved the benchmark for each asset class as set out in Attachment 1 to the report (October 20, 2022) from the Vice President, Impact Investing, Toronto Atmospheric Fund.

As required for compliance with Toronto Atmospheric Fund’s Statement of Investment Objectives and Principles (SIOP), benchmarks for each asset class are recommended for Board approval. The performance of Toronto Atmospheric Fund’s investments are compared against these benchmarks on a regular basis.

The Board of Directors of the Toronto Atmospheric Fund received the item for information.

Minutes from the Grants and Programs Committee meeting held on October 13, 2022.

The Board of Directors of the Toronto Atmospheric Fund:

1.  Approved the following grants to be funded jointly from the Canada, Ontario, and Toronto endowments except where otherwise indicated:

a.  $50,000 over 24 months to the Regional Municipality of Durham to develop and implement an incentive program encouraging industry and consumers to adopt higher performance tiers of their municipal green development standards (funded from the Canada and Ontario endowments only).

b.  $300,000 over 24 months to Efficiency Canada to promote research and engagement outlining priority actions and policy changes required to enable adoption of energy efficient heat pumps.

c.  $80,000 over 12 months to Athena Sustainable Materials Institute to upgrade the web-based Embodied Carbon Pathfinder tool and enable embodied carbon assessments in new construction and renovation projects in the Greater Toronto and Hamilton Area (GTHA).  The Committee’s recommendation is subject to the following conditions:

-  Toronto Atmospheric Fund (TAF) staff approval of the tool’s success to date based on an assessment of its adoption rate and the level of satisfaction among the building design community in British Columbia.

-  Written confirmation that the grantseeker has secured at least $19,383 in additional project funding from other external sources. 

d.  $200,000 over 18 months to Elexicon Group Inc. to complete a detailed design of a district energy system that will enable large-scale carbon reductions through the decarbonization of heating in new buildings in Whitby (funded from the Canada and Ontario endowments only).  The Committee’s recommendation is subject to the following condition:

-  Engagement of an external partner to gather the learnings from the project and promote them to relevant industry, government and community stakeholders to catalyze similar projects across the Greater Toronto and Hamilton Area.

e.  $196,000 over 18 months to Pocket Community Association to build a non-profit retrofit coordination service and accelerate retrofits of single-family homes in Toronto.  The Committee’s recommendation is subject to the following condition:

-  Written confirmation that the grantseeker has secured at least $281,000 in additional project funding from other external sources.

-  Written confirmation that the grantseeker has completed recruitment of an Executive Director, a Marketing Lead, and any additional personnel possessing relevant business expertise for the Retrofit Coordination Service.

-  Submission of a proposed business plan and revenue model for TAF approval.

2.  Declined four grant requests with a total value of $714,989. These are summarized in Confidential Attachment 1 to the report (October 20, 2022) from the Senior Grants Manager, Toronto Atmospheric Fund.

3.  Recommended the allocation of $1,033,000 over 12 months to support TAF’s functional and focus area teams in implementing their priority strategies and activities for 2023. (funded from Canada, Ontario, and Toronto endowments except where otherwise indicated.)  The funds will be allocated to internal staff teams as follows:

-  Climate Policy: $35,000 to support TAF’s policy activities by engaging external experts on key opportunities, and through travel and communications focused on relevant policy files (funded from Canada and Toronto endowments only).

-  Research and Innovation: $30,000 to purchase data and software for enabling high-quality research and support external knowledge sharing through events.

-  Retrofit Accelerator: $600,000 to engage public and private building operators on designing and delivering deep retrofits, grow the ecosystem of deep retrofit solution providers, raise public and private capital for Accelerator-supported deep retrofit projects, and showcase the technical and economic viability and other benefits of deep retrofits.

-  Electrification of Transportation: $90,000 to support the implementation of TAF’s EV Station Fund and enable research through external experts to accelerate the uptake of electric vehicles (EVs) and EV charging.

-  Decarbonizing Ontario’s Electricity System: $96,000 to secure technical advisory support for advancing research on distributed energy resources and energy conservation, mobilize stakeholders on decarbonization initiatives, and attend relevant events (funded from Canada and Toronto endowments only).

-  Grants: $82,000 to support capacity building of grantees and TAF staff on program design and evaluation and other relevant training opportunities, engage a technical expert to customize TAF’s grant administration software, and attend events to engage with other funders on leading grantmaking trends and opportunities.

-  Impact Investing: $100,000 to support customizing software for tracking and reporting investments, undertake origination and due diligence for Direct Investments, and undertake communications/marketing related to TAF’s impact investing leadership and practice.

4.  Directed that the confidential information contained in Confidential Attachment 1 to the report (October 20, 2022) from the Senior Grants Manager, Toronto Atmospheric Fund remain confidential in its entirety, as it contains financial information supplied in confidence to the Toronto Atmospheric Fund which, if disclosed, could reasonably be expected to significantly prejudice the competitive position or interfere significantly with the contractual or other negotiations of a person, group of persons, or organization.

At its meeting on October 13, 2022, TAF’s Grants and Programs Committee recommended that the Board approve five grants with a combined value of $826,000 and the program allocation with a total value of $1,033,000 to support TAF’s internal projects in 2023. This report includes recommendations and the minutes of the meeting.

That the Board of Directors of the Toronto Atmospheric Fund:

1.  Received the report (November 1, 2022) from the Chair, Human Resources Committee for information.

2.  Directed that the confidential information contained in Confidential Attachment 1 to the report (November 1, 2022) from the Chair, Human Resources Committee remain confidential in its entirety, as it is about employee negotiations.

The Board of Directors of the Toronto Atmospheric Fund recessed its public meeting to meet in closed session to consider the item as it pertains to personal information about identifiable individuals and employee negotiations.

The Chair of the Human Resources Committee will update the Board on Human Resources matters, including a review of compensation for Toronto Atmospheric Fund staff. Additional materials with recommendations related to the compensation structure for Toronto Atmospheric Fund employees will be provided to the Board for consideration. These matters will require a closed session discussion, as they relate to personal information about identifiable individuals and compensation considerations.

The details of a compensation study undertaken by Toronto Atmospheric Fund management in 2022 and the proposed implementation and impact on Toronto Atmospheric Fund’s 2023 Budget will be presented.

Announcements

The Chair acknowledged that the Board of Directors of the Toronto Atmospheric Fund was meeting on the traditional territory of many nations including the Mississaugas of the Credit, the Anishnabeg, the Chippewa, the Haudenosaunee and the Wendat peoples and is now home to many diverse First Nations, Inuit and Métis peoples. The Chair also acknowledged that Toronto is covered by Treaty 13 with the Mississaugas of the Credit.

The Board Chair, members and the Chief Executive Officer, Toronto Atmospheric Fund acknowledged and thanked outgoing Vice Chair Councillor Mike Layton for his dedication, services, and contributions to the Board, and wished him the best for the future.

Where the Members of the Board of Directors of the Toronto Atmospheric Fund listed in the attendance for this meeting participated remotely, they were counted for quorum, as permitted by Section 189(4.2) of the City of Toronto Act, 2006 and the Board's Procedures.

Also Present - Non-Members:

Julia Langer, Chief Executive Officer, Toronto Atmospheric Fund

Bryan Purcell, VP, Policy and Programs, Toronto Atmospheric Fund

Fatimar Crerar, VP, Strategy and Partnerships, Toronto Atmospheric Fund

Kristian Knibutat, Vice President, Impact Investing, Toronto Atmospheric Fund

Rob Wotten, Director, Finance, Toronto Atmospheric Fund

Siddharth Chatpilliwar, Senior Manager, Grants, Toronto Atmospheric Fund

Nicole Leite, Director, Impact Investing, Toronto Atmospheric Fund

Jaime Klein, People and Operations Manager, Toronto Atmospheric Fund

Cliff Goldfarb, Lawyer, Gardiner Roberts LLP

Heather Keachie, Lawyer, Gardiner Roberts LLP

Rich Whate, Senior Corporate Management Policy Consultant, City Manager's Office, City of Toronto