Ardian and Caisse de dépôt et placement du Québec (CDPQ) helped to draft the playbook. We asked Candice Brenet, Head of Sustainability at Ardian, and François Crémet, Senior Director of Sustainable Investing at CDPQ, about their role and involvement in this work. What were the main takeaways and what avenues are going to be explored going forwards?
Inclusion and diversity: two terms for two distinct notions
There are plenty of indicators to show that more inclusive and diverse companies enjoy a sharper competitive edge through improved productivity and increased innovation. Such firms also tend to be more attractive to employees, potential job candidates and customers. In addition to being vital issues for shareholders, inclusion and diversity (I&D) also offer tangible responses to the talent hiring and retention challenges encountered by many organizations and form a key aspect of performance.
Diversity is like a family photo. It’s a vitally important first step because it shows the variety of backgrounds within the company.
“Measuring diversity is a way to take stock, but it is still a static part of the process,” explains Candice Brenet.
Inclusion, meanwhile, is the dynamic component, an active approach that looks at each person individually.
Inclusion ensures that every person, as a unique individual, can develop a feeling of belonging and fully express their potential within the company.
“It is a way to promote equal opportunity and mobility within organizations,” continues Candice.
To quote Vernā Myers, diversity is being invited to the party, but inclusion is being asked to dance.
Entrenching inclusion and diversity: a major challenge for society
While many of Ardian’s and CDPQ’s portfolio companies are now aware of the importance of I&D to their business, the introduction of new approaches and initiatives is sometimes held back by legal or cultural factors or simply by a lack of internal tools.
This is precisely where the Inclusive Finance Playbook comes in. It is designed to help financial participants to put I&D issues on the agenda of their senior executives.
At Ardian, we see diversity, equal opportunity and social mobility as among the major challenges facing society today. We set targets for the companies in our portfolio and specific indicators for these criteria, and we have introduced measures to help firms achieve these goals.
“As part of our involvement in the Investor Leadership Network on diversity and investment, we contributed actively to the discussions surrounding I&D approaches as a shareholder, in order to enhance the playbook,” she continues.
When it comes to ESG, participants have an increasingly firm handle on governance and environment criteria, but ground needs to be made up on the social side. François Crémet says that CDPQ is working hard to close this gap: “As a founding member of the ILN, CDPQ considers equity, diversity and inclusion (EDI) questions to be one of the biggest challenges that must be met in the coming years.”
We are working to support and advise companies and managers in our portfolio that want to improve their EDI practices. Our input to the Inclusive Finance Playbook represents a new facet of our commitment to organizational EDI.
The process of drafting the Inclusive Finance Playbook was a participative and collaborative project involving round table gatherings, workshops and discussions that led to case studies and metrics for use by companies and organizations. The aim is to entrench I&D over the long run, ensuring that the full benefits can be shared as widely as possible.
A committed approach involving tangible measures
CDPQ and Ardian have taken tangible action as part of their proactive stances on I&D. Some 20 companies from the French portfolio have participated in Ardian Circle I&D workshops. Ardian is conducting this work alongside companies as well as with managers selected through the Secondaries & Primaries business. In all, 70% of GPs have implemented a I&D program and set clear targets for gender equality within their management companies.
companies from the French portfolio have participated in Ardian Circle I&D workshops.
At CDPQ, almost one-quarter of employees are from visible, ethnic or indigenous minorities, and women already make up 46% of the board of directors.
From surveys and initiatives focused on workplace wellbeing, to wage policies, hiring bias training and parental leave, Ardian and CDPQ are acting on multiple fronts. This heralds the start of a journey that will bring many lessons and profound improvements that benefit the entire sector.
“The goal is to work with other credible partners to document, harmonize and bring consistency to I&D strategies and metrics to gauge their effectiveness,” says François Crémet.
There is no miracle solution: you have to build up a complete ecosystem of measures that span the entire life of an employee within the organization, starting from recruitment and covering their whole career with the company.
“These questions must be brought before company boards and executive committees too, because change also – and especially – needs to come from the top,” he adds.
The Inclusive Finance Playbook thus contributes to the ILN’s ambitious goal of creating a robust and credible benchmark that sector participants can use and integrate in their own I&D approach and that could ultimately set the industry standard.
Employee engagement is a major concern in some countries, and the talent question is critical.
“Because diversity and inclusion are essential to promoting more innovative, robust and agile organizations, but also because they help to build a fairer society, we prioritize I&D in our responsible investor program,” says Candice Brenet in conclusion.