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SIR 2022: Letter from Charles Emond
Wherever we invest, we take concrete measures keeping in mind the well-being of communities
In its latest Sustainable Investing Report published on April17,2023, CDPQ presents its concrete actions and results in terms of sustainable investment. Charles Emond, President and Chief Executive Officer, reviews the organization’s priorities and role as a successful and responsible investor.
In an environment characterized by simultaneous crises, like we are seeing now, the fact that many investors are turning to environmental, social and governance (ESG) factors to improve their asset management has given rise to a falsedebate.
“As a manager of public funds, building a more equitable and sustainable world is not a choice. It is a responsibility that goes with our fiduciaryduty.”
Taking concrete actions, for today andtomorrow
At CDPQ, we want to be among those who are taking concrete steps for present and future generations. We have a fiduciary duty toward our depositors, and together we share an ambition to act in the interests of thecommunity.
We have convictions, but we are also pragmatic in our approach. Taking ESG factors into account allows us to better assess the long-term viability of a company and better understand the risks it faces. We also have short-, medium- and long-term targets to create value and ensure superior returns for ourdepositors.
Our teams maintain an ongoing dialogue with our portfolio companies to improve their practices and support their performance through the application of rigorous criteria. Our efforts are focused on certain priorities—including the climate, diversity and taxation—to maximize our impact across all our areas ofactivity.
We acted early and decisively to address climate change, which represents a great risk to our companies. As a result, we now have one of the world’s largest portfolios of assets in renewable energy generation. It has delivered excellent returns for our depositors over the past five years, generating higher performance than companies in oil production. Our exit from this sector is essentially completed.
We also believe there can be no doubt that our companies and external managers gain from supporting greater diversity and promoting inclusion within their teams. When they do, they benefit from diverse and complementary perspectives when assessing risks and identifying opportunities. And now, in these times of economic uncertainty, the need is greater than ever to promote equal opportunities through ouractivities.
Lastly, as a global investor, having our portfolio companies adopt a tax structure that respects communities is fundamental to our sustainable asset management approach. This is why we are one of the few fund managers in the world who committed to carrying out a systematic portfolio review from a tax perspective. We based that review on specific criteria, including the minimum tax rate recommended by the OECD and supported by theG20.
Beyond the initiatives we are putting in place, we were recognized for our leadership as a global investor, in particular in terms of sustainable investing. Among several awards received during the year, we were named 2022Fund of the Year, ahead of some 400sovereign wealth funds and public pension funds analyzed by GlobalSWF. Our contribution to the development of Québec’s sustainable economy was also recognized. In addition, our rigorous governance and climate action have earned us the number one ranking among pension funds in the World Benchmarking Alliance’s Financial System Benchmark.
“Of course, it's demanding to be a successful and responsible investor. But we believe that's what it takes to fulfill our dualmandate.”
In Québec and around the world, we are recognized as an innovator that can use our constructive capital and our network of international partners to create solutions to the challenges that markets and communities face. And every day, our approach is guided by our responsibility to the six million Quebecers who entrust us with theirsavings.