Before the pandemic, rising inequalities and climate change were already bringing the world toward the cliff of unsustainability. Covid-19 only exacerbated the situation.
Extremes that were alleviated in recent decades have re-emerged. In developed economies, the crisis disproportionately affected women and minorities. And while developed economies spent up to 20 percent of their GDP as stimulus package, developing countries spent on average closer to 2 percent of theirs. At the same time, stock markets around the world recovered quickly – accelerating existing inequalities.
The need for global solidarity and co-operation to deal with the challenges posed by rising inequality and the climate crisis has only intensified – and is now manifesting on all fronts: health, financial, environmental and social. As we move to restart our economies, investors, governments and the wider business community have a critical opportunity to bridge the divide and rebuild better with constructive solutions.
Institutional investors did not exist at the end of the Second World War, when we last saw a crisis of this magnitude and the creation of the Bretton Woods’ institutions. Today, these investors represent about $100 trillion of investable capital. They absolutely need to be at the centre of the building back better movement developed as an answer to this pandemic.
“Working alongside local and federal governments to deliver the green and inclusive infrastructure people need, while generating the reliable returns for our depositors”
At CDPQ, we take a sustainable and long-term approach to investing – considering climate change and integrating ESG criteria into every investment decision. Our goal is to generate returns for our clients, while at the same time investing constructive capital that contributes to the vitality of local economies and inclusive communities by building enterprises that drive performance and progress. This is the meaningful role leading investors can play to stimulate economies and address the rising inequalities – and consequential instability – that the world is facing, as well as fighting climate change.
The REM project (Réseau Express Métropolitain) – the largest public transit project in the Greater Montréal area for over 50 years – is what we consider constructive capital. Working alongside local and federal governments to deliver the green and inclusive infrastructure people need, while generating the reliable returns for our depositors. Everybody wins and our vision remains firmly set on the long-term – where we believe we can build lasting value while advancing public interest.
The key to constructive capital falls, like never before, on our ability to develop trustworthy relationships with stakeholders and potential partners. Innovative partnerships are central to identifying opportunities around the world and better understand the risks we are facing. By combining performance and progress, we can collaborate to create and deliver projects that will have a positive impact on society for generations to come, which is essential in our progression towards a sustainable, fairer and resilient world.