The value of low-carbon investments held by the Caisse de dépôt et placement du Québec has more than doubled since 2017, according to its annual sustainable investing report.
In the report, the investment organization noted its low-carbon investments were worth $39 billion at the end of 2021, up from $18 billion in 2017 and $36 billion from the previous year. It also said it expects to see the value of these investments reach $54 billion by 2025.
The Caisse also appears on track to reach a number of other environmental goals it laid out in 2021. One of its challenges was to reduce its overall carbon footprint, aiming to reach 40 per cent by 2030. According to information disclosed in the report, its footprint has already dropped 51 per cent in the past five years. The Caisse also said it anticipates completing its exit from petroleum production this year.
“These assets will be sold in an orderly fashion with the goal of protecting returns for our depositors and building a more sustainable portfolio,” said the report. “Our capital will continue to be available to energy companies that wish to develop transition projects based on clean technologies.”
While a considerable amount of the report is dedicated to environmental issues, it also showed that social and governance issues were more frequently raised during the 194 meetings between the Caisse and representatives of investee organizations last year. Just 10 per cent of these discussions focused on environmental issues, while 28 per cent focused on governance issues and 36 per cent on social ones. The remaining 26 per cent of conversations touched on multiple areas of the Caisse’s ESG strategy.
“Our approach also allows us to raise the companies’ awareness on issues that are a priority for us, particularly those related to ESG factors.”
As part of its social and governance commitments, the Caisse is aiming to increase the number of women represented in its senior ranks and in the executive teams and boards of the organizations in which it holds stakes. In 2021, the share of women in the Caisse’s executive committee reached 39 per cent, up from 22 per cent the previous year. Among its investee companies, the percentage of women serving as board members jumped 22 per cent to 29 per cent.
It’s also seeking to ensure its investees abide by the Organization for Economic Co-operation and Development’s goal for multinational companies to pay a minimum effective tax rate of 15 per cent by 2023. To do this, the Caisse monitored eight investee companies paying an apparent tax rate below the threshold.
Following discussions with seven of these businesses, four were found to be reaching the 15 per cent minimum. Of the three that weren’t paying the minimum amount in tax, the Caisse determined monitoring would continue for two and it would divest from the third.
“Like the OECD, we believe that the country where the company is incorporated is not an end in itself to determine the existence of an aggressive tax planning,” said the report. “This is why we analyze each investment opportunity paying special attention to the consolidated tax rate applicable and for which the rate of 15 per cent constitutes one of the reference points.”