Yana, welcome.
Why is advancing sustainable finance so important?
Thanks so much for having me, Georgie, and what a great
question to kick off with.
So CDPQ, as you may well know, we have a dual mandate and it is
both to deliver the best returns possible, but also to do so
while improving the lives and economic development of the
people of Quebec.
So that makes us uniquely aware both of the community on whose
behalf we're investing and the communities we're investing in.
So hence our philosophy when it comes to investment is invest
constructive capital for the long term in order to deliver
performance and progress.
So when we look at sustainable finance, we really see both
sides of the equation.
We see the economic return that it delivers to our depositors
and we see the positive contribution that it can make to
communities.
So for us it's as simple as that.
What do organizations need to do?
What advice do you have for advancing sustainable finance?
Well, I'll tell you, you know our own sort of voyage through
sustainable finance and where I think it has some lessons for others.
But you know, we now at CDPQ when we took stock of the fact
that the transformation of the economy is going to be a $200
trillion opportunity between now and 2050, that realization
really is the first step for any organization.
You need to realize that the decarbonization of the economy
is not just a strategic threat to be mitigated, it's in fact a
once in a lifetime opportunity to be seized.
So organizations really need to start there.
Then interestingly, you know, we moved to sort of setting targets
for ourselves and we did that because we wanted to be very
purposeful about engaging in this climate strategy so that we
could proactively position ourselves to benefit from this
fundamental transformation.
So you know our climate strategy involves both a $10 billion
envelope for investing in the hardest-to-abate sectors and
also the intention of holding $54 billion in green assets by 2025.
Like here in the US, for example, we have a
controlling interest in a terrific company called
Invenergy.
And Invenergy is in the Americas, the largest
independent renewable energy developer and operator.
We also have an investment in AES Indiana that I think is
quite, quite cool in the context of energy transition.
AES Indiana provides electricity to about 500,000 plus clients
around Indianapolis and our investment enabled this utility
to go from over 80% power generation by coal to 35% and is
on track for 0% by 2026.
So these are the ways, you know, recognizing the opportunity,
setting the targets, starting to align your capital.
These are a lot of the initial steps.
Taking a broader look, what's the investment outlook in North
America right now, do you think?
Well, you know from our perspective, the United States
is an absolutely vital market.
It's due to the size, the proximity to Canada, but also
just the depth and sophistication of the US market.
You know, never underestimate the US economy.
In fact, over the last 10 years CDPQ, we've doubled, or almost
doubled our exposure of our portfolio into the US and in the
last five, six years alone, we've invested an additional
$100 billion in the United States.
So what we see in the US is a tremendous amount of opportunity.
You know there are, there's a resilience really that we're
seeing in terms of the consumer, you know, in terms of even the
inflation and how we're managing it, managing through it with
growth and productivity.
You know, I will say I was struck,
I saw this data point the other day which is at the beginning of
this year, the combined impact of the CHIPS Act, the IRA, the
Infrastructure Investment Act, had all culminated in a combined
investment, public and private, of over a trillion dollars.
So these are the ways in which the United States realigns
policies and manages to move forward despite, you know the
uncertainty in the economy.
Finally, what are some of the key trends that you're seeing,
what are what are exciting you the most, I guess.
Well, I will say, you know, since we've been talking about
energy transition, sustainable finance, that's an enormous
piece of it.
But I'll maybe add to that and to point out the ways in which
investors, capital allocators and owners, and managers like us
are collaborating increasingly in the deployment of capital
with philanthropy, government, other actors.
And we at CDPQ we actually have a strategic partnership if you
will with Natixis out of France, with Ninety One in the UK, and
the US Treasury in finding ways to coinvest more smartly
together cross-sector. And these sorts of alliances,
you know, whether it's that or the Investor Leadership Network,
which we cofounded a few years ago, or the Sustainable Markets
Initiative.
We're seeing, increasingly, investors and business leaders
and governments coming together to cocreate solutions, and I
find that very exciting.
Thank you so much.
Thank you.