CDPQ: Why we are getting tough on DE&I

What role does DE&I play within CDPQ?

DE&I is important to us internally, as it allows us to provide a workplace where employees can feel recognized, valued and empowered. As a global investor with C$365.5 billion ($294 billion; €247 billion) under management, it also means exercising our influence positively with our portfolio companies and the external managers with which we invest.

We strongly believe that a corporate culture based on DE&I leads to better business outcomes. We also believe it is the right thing to do. We have all seen, through covid, how women and minorities have been disproportionately affected and we feel we have a role to play in addressing these societal challenges. For us, DE&I means both progress and better performance. The two go hand in hand.

How rigorous is your DE&I due diligence?

We have really increased our focus over the past two to three years and we are prepared to act if a company falls short. We may appoint a diverse candidate to the board, for example, as we generally negotiate governance rights. And if an external manager doesn’t have a DE&I policy, we will insist they adopt one.

We recently also issued letters to all our actively managed public portfolio companies indicating how important it is for them to have at least 30 percent female representation on boards and we have amended our proxy voting policy to align better with DE&I disclosure.

If that 30 percent is not achieved, we could go as far as voting against the chair of the nomination committee – something that has garnered a significant reaction and allowed us to have positive engagement.

Believe it or not, some companies still say they have a pipeline issue around finding talent that meets our criteria, in which case we can step in with our internal bank of candidates and wide network and make the necessary introductions. But we can only wield that influence if we have our own house in order when it comes to DE&I, of course.

What is the key to inclusivity?

First and foremost, the key is to listen and then to act upon what you have heard. We recently ran groups for people identified as high talent potential. The group I was leading came up with the idea that every single investment committee within CDPQ should have diverse representation. That grassroots idea has now been put in place.

Another example followed the death of George Floyd, where one of our colleagues identified the importance of not only adding our voice to but taking concrete action. That employee presented to the executive committee and the result was a C$250 million fund called Equity 253.

That fund is designed to invest in Canadian SMEs and tech companies that commit to achieve at least 25 percent diverse representation at an executive, board and shareholding level, within five years following the confirmation of the financing.

Throughout our investment, we help companies take the right actions to achieve this objective. These ideas all came from listening to our people and the impact has been tremendous.

What are your hopes and expectations when it comes to DE&I?

I hope that in a few years’ time, all these factors around DE&I are a given – and we won’t need to have these conversations anymore because it will be so deeply engrained in corporate culture and in society.