From private companies to public pension funds, countless entities have adopted a woke, ideologically-driven agenda in recent years– with some starting to pay the price. Photo credit: Getty Images/Justin Sullivan
The slogan “Go Woke, Go Broke” has achieved popularity recently as it seems that so many of the companies which have opted to follow so-called “woke” goals have met with unfortunate consequences. The “woke” goals include prioritizing gender issues, social justice objectives, attempting to conform with unrealistic ESG (environmental, social and governance) financial standards, structuring boards of directors to comply with the inclusion of certain proportions of racial groups and gender balance and focussing their companies on achieving someone else’s imposed social goals instead of the bottom line.
The collapse of US Silicon Valley Bank – the biggest bank failure since the 2008 financial meltdown – was blamed by some on its “woke” priorities, such as a focus on diversity, equity and inclusion (DEI) issues. Other said it was merely a fact of bad investments that brought the financial institution down. But when any organization gets distracted by DEI, ESG and other non-financial priorities, it is not surprising that their eye is taken off the ball of the basic purpose of any corporation – making money for their shareholders.
The negative impacts of the “woke” agenda are starting to hit home with many companies. Much of this approach may have sounded good in theory, but in practice is turning out to be a disaster. Closer to home, the CEO of Canadian energy giant Suncor, Rich Kruger, recently announced that he believes the company has been overly focused on energy transition issues and now must return to an oil-centred business strategy. This will hopefully be the start of a trend away from the foolish and unrealistic “woke” priorities.
Canadians should be especially concerned about the findings of a recent Fraser Institute study that concluded the Canada Pension Plan Investment Board (CCPIB) is pursuing ideological objectives, which is costing Canadians money in their pensions. The CPPIB has a clear mandate to focus on earning the maximum investment return on the assets that it manages. Yet recent information indicates that the Board instead has pursued a strategy to promote “net zero” carbon emissions and encouraged government regulation and the imposition of environmental obligations on companies in which it invests. The Fraser study concludes that these goals are damaging to the CPP’s financial success.
Quebec’s public pension plan, the QPP, managed by the Caisse de depot et placement, also has a strategy to pursue environmental and sustainable investment strategies instead of clear financial goals. Most public sector pension plans also have incorporated these types of objectives into their investment schemes instead of prioritizing investments that would yield the best rate of return.
Most Canadians don’t pay attention to the intricacies of where their CPP contributions are being invested, which is understandable. However, the fact that investments in their future pensions are being endangered by their pension managers following the latest “woke” trends instead of investments that will maximize financial returns should of be of concern to everyone. We are constantly told by government that our CPP is sufficiently funded for decades to come, but if these monies are being invested to comply with the latest politically correct ideas instead of the basic goal of making money, we have good reason to doubt these claims.
In addition, when public sector pension funds also follow the latest trendy ideas, they could well come up short in their ability to fund the generous pensions all of Canada’s government workers enjoy. If they do come up short, it will be Canadian private sector taxpayers that will be on the hook for these shortfalls because the pension plan administrators made some stupid decisions.
The Ontario Teachers’ Pension Plan, which is often held up as a great example of a successful public sector plan, had to significantly increase the premiums that private taxpayers had to pay in the 1990s as the plan was in financial trouble. The original matching contribution required of private sector taxpayers was about 8 per cent of the average teachers’ salary. It is now about 14 per cent – almost double. This is hardly an indication of a successful financial pension strategy. It is profoundly unfair that private sector workers, who are trying to put away money for their own retirement, are required to put so much money into pensions for government workers that they will never be able to afford for themselves.
It is a very worrisome trend that so many corporations and pension plans have been bamboozled by the “woke” constituency that they should sacrifice their pursuit of sensible financial objectives to try to conform with social justice goals. Now that some of the negative results are being seen, it is encouraging that some corporate leaders are bucking the trend and reverting to more traditional and trusted financial objectives. We can only hope this will continue until sanity once again prevails.
She has published numerous articles in journals, magazines & other media on issues such as free trade, finance, entrepreneurship & women business owners. Ms. Swift is a past President of the Empire Club of Canada, a former Director of the CD Howe Institute, the Canadian Youth Business Foundation, SOS Children’s Villages, past President of the International Small Business Congress and current Director of the Fraser Institute. She was cited in 2003 & 2012 as one of the most powerful women in Canada by the Women’s Executive Network & is a recipient of the Queen’s Silver & Gold Jubilee medals.