For decades, pension funds around the world were perceived as reliably boring institutions. Using the same playbook, they rarely captured the spotlight. Few among the public gave much thought to how these funds invested their money, as long as they delivered the desired returns. 

But times have changed.  

Fifteen years ago, geopolitical discussions were not front and center. Today, they’re held everywhere – from the newsroom to the boardroom. Similarly, climate change was accepted as a real but relatively distant peril. Today, it’s an undeniable concern. Cybersecurity was barely – if at all – on the agenda. Today, it’s a serious and omnipresent risk. And all the while, the pension industry has become subject to increased interest, pressure, and scrutiny. 

A growing number of engaged stakeholders have emerged – with governments viewing pension funds as potential partners in building critical infrastructure and keeping their economies competitive. Interest groups attempt to leverage these funds to advance their agendas, and the broader public has become more interested in (and, in some cases, critical of) how and where pension funds invest their holdings.  

A new playbook for a new era  

The playbook for pension funds needs to evolve because the game has fundamentally changed. Pension investing used to draw parallels with running a marathon. It demanded skill and stamina – but the parameters were clear and straightforward. Today, navigating the investment landscape can feel like competing in a decathlon, where an ever-greater range of abilities and disciplines is required to achieve success. 

The pension industry needs a new, relevant, and consistent decision-making framework that is guided by key principles but also flexible enough to adapt to a dynamic global environment. This framework should encourage ambition for the future – forcing action and addressing our biggest challenges – while ultimately delivering returns.  

And a crucial element of a new playbook, in my view, is the necessity to put our long-term capital to work in building the world we want to offer to future generations. To be part of the solution.  

Remembering who we invest for  

The focus on Environmental, Social and Governance (ESG) factors is not a fad. Nor does it run counter to the fiduciary duties of a pension fund. At CDPQ, we are taking concrete actions. We now have one of the world’s largest portfolios of assets in renewable energy generation, and we are supporting companies from the highest-emitting sectors through our $10-billion envelope dedicated to the climate transition. We are also one of the few investors in the world who have committed to review our portfolio based on the minimum tax rate recommended by the OECD and supported by the G20. 

To be successful over the long term, we must identify the right actions to make a difference, display courage not arrogance, innovate in the face of greater ambiguity, and determine the optimal speed to drive change.  

As pension funds, we must always remember our purpose. Our responsibility to the people who entrust us with their savings should lead us to achieve sustainable performance. To deliver both performance and progress. There is no doubt in my mind that we can aspire to do well for our clients while also doing good for the world. 

This is our opportunity to show leadership in confronting global issues as we carry out our vital mission. Three decades from now, when the new generation asks, “Where were you when you could have made a difference?”, I know what answer I want for CDPQ.