Item - 2025.IB14.3

The Toronto Investment Board:  

1. Directed that the confidential information contained in Confidential Attachment 1, Confidential Attachment 2, Confidential Attachment 3, and Confidential Attachment 4 to the report (November 26, 2025) remain confidential in its entirety, as it contains information that involves the security of property belonging to the City or one of its agencies or corporations.

2. Authorized the Director, Capital Markets to negotiate a contract to retain services provided by MSCI Inc. and MSCI ESG Research LLC to supply quarterly reporting and metrics for the purposes of assessing Environmental, Social, and Governance (ESG) performance in relation to the Board's investments, and to authorize the Chair or Vice-Chair of the Toronto Investment Board to execute an agreement with these service providers on behalf of the Toronto Investment Board.

Randy LeClair, Director, Capital Markets gave a verbal update on Environmental, Social, and Governance Reporting.

The service providers MSCI Inc. and its subsidiary company MSCI ESG Research LLC (MSCI) has been hired as the primary provider of Environmental, Social, and Governance (ESG) reporting over the last three years. The services provided by MSCI responds to a request by City Council, at its meetings in June 29 and June 30, 2020, to monitor and report on whether external investment firms hired by the Board are compliant with the terms of the Investment Policy with respect to ESG factors.

Both MSCI products are being provided on a managed service basis whereby City staff provide portfolio information to MSCI via secured channels and MSCI generate reports on a portfolio and consolidated basis for the Long-Term Fund (LTF) and Sinking Fund (SF). Benchmark index information is also provided for comparison.

The agreement with MSCI includes the MSCI Carbon Portfolio Analytics reporting package that is part of MSCI's Climate Lab Enterprise, a comprehensive set of climate data and analytics. Carbon Portfolio Analytics reporting from MSCI ESG Research helps investors understand, measure and manage carbon risk at the portfolio, sector and company level.

The information from MSCI is proprietary and confidential. There are a number of identifiable individual companies and governments in their detailed reports. The agreement with MSCI allows for the viewing and use of the information on a confidential basis by a limited number of City staff, the Board and City Council. The contract does allow for the public use of general consolidated information on a limited basis.

Portfolio holdings as at September 30, 2025 were submitted to MSCI in November 2025. Results were received as at the date of this report. Summary data is provided in this report and in Confidential Attachments 1, 2, 3 and 4.

Reports provided by MSCI, such as the ESG Portfolio Summary and Carbon PA reports in Confidential Attachment 1, 2, 3, and 4 of this report, are provided to the Board on a quarterly basis. The reports provide a summary grade rating to each portfolio and several key metrics that assist the Board with evaluating the ESG performance of its portfolios. The service includes ESG reporting and metrics, technical and reporting support, and related software access.

The three-year contract with MSCI that started on April 5, 2023, is set to expire on April 4, 2026. Through this report, authority is being sought to negotiate a contract and to retain the ESG services provided by, MSCI Inc. and MSCI ESG Research LLC, through a new three-year contract immediately following the end of the current contract.