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 false debate.
“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 fiduciary duty.”
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 the community.
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 our depositors.
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 of activity.
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 our activities.
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 the G20.
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 2022 Fund of the Year, ahead of some 400 sovereign wealth funds and public pension funds analyzed by Global SWF. 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 dual mandate.”
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 their savings.
President & Chief Executive Officer
We believe that investing sustainably means generating a positive impact for the communities where we are present. Our teams keep us focused on our long-term objectives. Above all, we remain true to our dual mandate of offering optimal performance to meet the needs of our depositors, while contributing to the development of a strong Québec economy.
Net assets as
at December 31, 2022
Our approach to sustainable investing is based on integrating ESG factors and the positive impact that this can have on companies at every stage of their growth. This is why our teams take this into account in all our investment decisions regardless of the asset class. In this way, we make our approach a mechanism for risk management, value creation and innovation.
Total assets in Québec
Our ambition for our assets in Québec by 2026
Through the expertise of our teams, we are known for being a key partner in sustainable investing. We are able to create promising projects, links and partnerships, both in Québec and around the world, on the strength of our teams’ combined skills, diversified experience and deep knowledge of the markets and our vast business network. These benefits enhance our influence and advance ESG practices.
We have targeted those issues on which we have the most impact today, and that allow us to generate positive and sustainable benefits for all our companies:
In addition, our teams have established rigorous analytical processes at all stages of the investment cycle and for all asset classes. The risks, opportunities and specific features of each industry are studied in detail. This allows us to conduct regular monitoring and act quickly if concerns arise about a company’s practices.
759pre- and post-investment ESG analyses were conducted in 2022 to support our teams’ decision-making.
Deployment of strategies, policies and initiatives to affirm our ambition in sustainability
Outreach initiatives in Québec and abroad as well as involvement in collaborative platforms alongside our peers and the financial ecosystem
Advisory role for our teams regarding sustainable investing opportunities and for our nominee directors and operating partners to enhance understanding of ESG issues
Assessment of ESG performance integrated into the investment analysis and decision-making process
Ongoing dialogue with our portfolio companies and external managers to promote ESG best practices and value creation
Exercise of our right to vote as a shareholder in accordance with our sustainability convictions and priorities
We regularly improve our internal processes to continue innovating and achieve our ambitious goals, while also taking into account the investment environment. We have deployed new tools in several areas, including:
For CDPQ, 2022 was rich in initiatives and progress, and the many awards we received underscore our impact in Québec and internationally. Every day, our teams' work, our alignment with our portfolio companies and external managers, our ability to support the growth of Québec companies internationally and our leadership in sustainable investing all serve one single, unifying objective—to deploy our constructive capital.
I am extremely proud of our achievements over the past year. Through a combination of our diversified expertise and the market knowledge of our teams, we innovated and found practical solutions that address the financing of climate measures on a global scale. Our transition envelope and blended finance are examples of a range of solutions for working collectively, with various stakeholders, to catalyze efforts toward achieving ambitious targets.
I can see that, around the world, CDPQ’s leadership shines. Our attendance at major events such as COP27 and COP15 and our participation, alongside our peers, in a number of global initiatives on ESG matters, are helping achieve progress on these critical issues. The synergy that emerges from these concerted international actions creates a spirit of collaboration and trust that is increasingly favourable to sustainable investing.
This suggests that solid progress will be made in 2023. Our teams will continue to propose various avenues for creating value for the communities where we invest. And we believe that our proactive engagement with our portfolio companies is a path to continued success.
For us, this is a promising way to build a sustainable future.
Executive Vice-President and Head of CDPQ Global and Global Head of Sustainability
We pursue six United Nations Sustainable Development Goals
We fight climate change every day
in low-carbon assets since 2017
in low-carbon assets, including $12 billion in Québec
reduction in the portfolio’s carbon intensity compared to 2017
in low-carbon assets or in low‑intensity sectors
We help build stronger communities
of employees at CDPQ are women
of our employees in Québec identify as a member of one of the following three groups:
of our nominee directors are women
of our public companies in active management have at least 30% of women on their Boards of Directors, an increase of 27% in 2 years
pre-investment notices on tax practices
We are focused on promoting a strong governance structure
discussions to raise awareness on ESG factors among our portfolio companies
technology risk analyses
resolutions voted on at
shareholder meetings held by our portfolio companies