Article SUPPORTING THE TRANSITION

Investing constructive capital to support strong companies in strong communities

Stewardship investing Montréal,
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In its most recent Stewardship Investing Report released on April 21, 2020, CDPQ provides an overview of the latest developments in its strategy to fight against climate change, as well as on matters related to equity, diversity, inclusion and governance. Charles Emond, President and Chief Executive Officer, and Kim Thomassin, Executive Vice-President and Head of Investments in Québec and Stewardship Investing, take stock of 2020 and provide some important observations on the organization’s ambition to achieve a green, equitable and inclusive economic recovery.

In 2020, the COVID-19 pandemic and ensuing crisis had unprecedented impacts on communities, exacerbating already existing inequalities. Women, young people and members of ethnocultural minority groups around the globe were particularly hard hit.

This year also saw citizens around the world stand up in support of social justice. The echo of their voices is a strong signal that encourages us to continue and expand our efforts to promote equity, diversity and inclusion.

While the crisis has severely affected economies, the recovery is an opportunity for us all to rebuild better and be more ambitious in our fight against climate change and meet rising needs. By directing capital to a greener, more equitable transition, we can generate growth while contributing to a more sustainable world.

As a global investment group that takes a long-term approach, we have an opportunity to invest and develop assets that foster stronger communities and healthier living environments. Guided by this ambition, we can carry out our mission while safeguarding the trust of millions of Quebecers for whom we are working, as well as the communities that are home to our portfolio companies.

Each day, we assess the quality of our investments in light of targeted returns as well as rigorous sustainability criteria. Our teams also rely on expertise and close collaboration with our partners to promote ideas that are important to us, such as fighting climate change, promoting diversity and inclusion and sound governance within our portfolio companies.

Enhancing our climate ambitions

We work to fight against climate change each and every day. Given that we have exceeded our targets set in 2017, this first phase of our commitment has been successfully completed this year.

In the coming months, we will be resetting our low-carbon investment targets to focus more on assets that support the transition.

Moreover, adjusting our carbon intensity reduction target will allow us to enhance our efforts across our entire portfolio. We will pay very close attention to the decarbonization of the real economy by strengthening our commitment to our portfolio companies as the transition unfolds. Our target is still tied to our goal of achieving a carbon neutral portfolio by 2050 and we are continuing our efforts in this area, particularly with our partners.

In line with this vision, we have also confirmed that we wish to eliminate our coal exposure and that we have significantly reduced our exposure to oil production since 2017, in keeping with our goal to ultimately eliminate the most polluting forms of fossil fuel from our portfolios.

Promoting equity, diversity and inclusion

This past year has solidified our conviction that championing equity, diversity and inclusion is now more important than ever.

We have clarified our expectations of portfolio companies in our improved Policy on the Principles Governing the Exercise of Voting Rights of Public Companies. This governance tool provides guidance for our voting positions with regard to our stewardship investing priorities, allowing us to signal that our portfolio companies must implement this change more quickly.

Because we firmly believe that a corporate culture based on equity, diversity and inclusion is synonymous with success, we also provide an inclusive work environment for the development of all our talent. 

In addition, we continue to work with our international partners to advance these issues in our industry, both locally and around the world. 

Leading by example on best governance practices

The impacts of the pandemic have shined a light on how important strong governance is.

Transparency and resilience are fundamental in the companies we invest in.

We develop our companies’ expertise in areas such as environmental, social and governance (ESG) factors, cybersecurity and abusive tax planning through discussions with our experts.

The progress made and results achieved in recent months illustrate the important work our teams do, our efforts to address these major societal issues and our commitment to meet our depositors’ needs.

For the coming year we will continue down this path of investing constructive capital.

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2020 Stewardship Investing Report

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Stewardship Investing Report

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