Canadian pensions vote against shareholder proposal seeking clarity in Brookfield’s definition of “transition” assets
At Brookfield’s AGM in June, nearly all of Canada’s largest pension funds voted against Shift’s shareholder proposal asking the company to disclose specific criteria for inclusion of assets within its transition-labeled funds. Only Ontario’s University Pension Plan (UPP) voted for our proposal.
Brookfield’s transition funds are designed to pool money from institutional investors like pension funds and invest in companies, projects and technologies designed to accelerate the global transition to a net-zero economy. But Canada lacks a taxonomy that provides investors with a credible definition of “transition” assets, and Brookfield’s definition is filled with loopholes. Some Brookfield transition funds have already flowed to oil and gas companies for dubious carbon capture and storage (CCS) projects, while Brookfield’s definition could potentially allow liquefied natural gas (LNG) to be considered a “transition” asset.
Transition funds like Brookfield’s have the potential to give pension funds (and their beneficiaries) exposure to profitable opportunities to decarbonize the economy and accelerate the energy transition. But without a Paris-aligned, science-based definition of transition assets, Brookfield’s funds could be exposing pension funds to risky investments and dangerous distractions that funnel retirement savings to fossil fuel companies and lock-in carbon pollution for decades to come.
Our shareholder proposal at Brookfield’s AGM attempted to help address this problem.
The Shareholder Proposal
This spring, Shift partnered with Investors for Paris Compliance (I4PC) to file a shareholder proposal at Brookfield Corporation calling on the company to disclose specific criteria for inclusion of assets within its transition-labeled funds, which value $27.4 billion. Our request followed concerns that the guidance document for Brookfield’s “transition” funds is unclear and may permit investments that undermine net-zero commitments, such as LNG and CCS for oil and gas.
Brookfield’s Operating Principles for Impact Management for transition funds is written in a vague manner that fails to specify which energy transition pathways Brookfield adheres to, account for an asset’s full lifecycle emissions, or prevent carbon lock-in. The guidance document is not aligned with any leading transition taxonomies, including the draft principles set forward for a Canadian taxonomy. And, a Brookfield executive recently and falsely called LNG a “leading transition fuel”. Brookfield is the eighth largest LNG investor in the world via its other business lines.
Shift and I4PC also published a detailed investor briefing to back our resolution and explain why Brookfield’s lack of clear transition guidelines poses transition and reputational risks to its shareholders and investors, including Canadian pension funds.
Canadian pension funds are heavily invested in Brookfield and its transition funds
As of March 31, Canada’s largest pension funds held over 13,000 shares in Brookfield worth more than $1 billion.
| Canadian Pension Fund Investments in Brookfield Corp. | |||
|---|---|---|---|
| Pension Fund | Number of Shares (March 31/25) | Value of Shares (CAD, March 31/25) | Commitments to Brookfield's Transition Funds |
| AIMCo | 4,458,782 | 333,842,737 | |
| BCI | 1,530,509 | 114,628,965 | |
| La Caisse | 1,656,576 | 124,032,943 | Investor in Brookfield Catalytic Transition Fund |
| CPPIB | 2,813,003 | 296,707,184 | |
| HOOPP | - | - | |
| IMCO | 91,775 | 4,809,928 | Investor in Brookfield Global Transition Fund 1 |
| OMERS | 2,317,789 | 173,819,037 | |
| OPTrust | ? | ? | |
| OTPP | - | - | Founding investment partner and "anchor investor" in Brookfield Global Transition Fund 1 |
| PSP | 138,399 | 10,362,354 | Investor in Brookfield Global Transition Fund 1 |
| UPP* | ? | 5-10 million | |
| Total** | 13,006,833 | $1,055,275,746 | |
| *as of Dec 31/24 | |||
| **using low end of value of UPP's reported shares | |||
Some of Canada’s largest pension funds are also core participants in Brookfield’s transition funds. The Ontario Teachers’ Pension Plan (OTPP) was a founding investment partner and anchor investor in Brookfield Global Transition Fund 1 (BGTF1), saying the fund “reflects (OTPP’s) commitment to providing retirement security for our members while also helping to make the world a better place.” PSP Investments (PSP) and the Investment Management Corporation of Ontario (IMCO) also made large investments in the transition-labeled fund, saying it “reinforces (their) collective dedication to responsible investing and the transition to a net-zero carbon economy.” Meanwhile, La Caisse (formerly the Caisse de dépôt et placement du Québec, or CDPQ) was a major investor in Brookfield’s Catalytic Transition Fund.
How did Canada’s pension funds vote on our shareholder proposal at Brookfield’s AGM?
Our shareholder proposal garnered just 7.94% support among Brookfield investors– a lacklustre result considering the urgency of the climate crisis and the amount of money being invested in the company’s transition funds. In our engagements with Brookfield, the company indicated that it would make minor improvements to its transition criteria, but declined to come to a credible agreement with us.
Of eight Canadian pension funds included in this analysis that held Brookfield shares, just one voted for our shareholder proposal. These disappointing votes came despite Canadians calling on their pension plans to support the proposal in order to protect their retirement savings from climate-related financial risks.
UPP said that it “supports this proposal because it is requesting initiatives and/or targets aligned with the goals of the Paris Agreement, including pursuing efforts to limit the temperature increase to 1.5 degrees Celsius above pre-industrial levels.”
IMCO abstained from the vote. Other funds, including the Healthcare of Ontario Pension Plan (HOOPP), OTPP and OPTrust, did not hold shares in Brookfield and therefore did not vote on the proposal.
Six other pension managers, including the Alberta Investment Management Corporation (AIMCo), British Columbia Investment Management Corporation (BCI), La Caisse, Canada Pension Plan Investment Board (CPPIB), OMERS and PSP voted against the proposal.
| Proposal: Shareholders request that Brookfield disclose clear criteria for assets within its transition-labeled funds in order to ensure compliance with net zero. | ||
|---|---|---|
| Pension Manager | How did your pension fund vote on this Brookfield shareholder proposal? | Source |
| AIMCo | Against "AIMCo is currently satisfied with the company's approach and reporting on this issue and will continue to monitor it going forward." |
AIMCo Proxy Voting History |
| BCI | Against "We believe the company's current policies, practices, and related disclosure are sufficient." |
BCI Proxy Voting Record |
| La Caisse | Against "PV_01" |
La Caisse Proxy Voting |
| CPPIB | Against No rationale provided |
CPPIB Proxy Voting History |
| HOOPP | No vote -- does not own shares | No proactive disclosure |
| IMCO | Abstained | IMCO Proxy Voting Dashboard |
| OMERS | Against No rationale provided |
OMERS Proxy Voting Record |
| OPTrust | No vote -- does not own shares | No proactive disclosure |
| OTPP | No vote -- does not own shares | OTPP Proxy Votes |
| PSP | Against No rationale provided |
PSP Proxy Voting Records |
| UPP | For "UPP supports this proposal because it is requesting initiatives and/or targets aligned with the goals of the Paris Agreement, including pursuing efforts to limit the temperature increase to 1.5 degrees Celsius above pre-industrial levels." |
UPP Proxy Voting Search |
Some of Brookfield’s “transition” funds are flowing to dangerous distractions pushed by oil and gas companies
Less than a month after Brookfield investors voted down our shareholder proposal, oil and gas company Advantage Energy announced that an investment from BGTF1 would flow to risky CCS projects at gas plants in Saskatchewan and Alberta. Similarly, BGTF1 invested in a CCS project operated by California’s largest oil and gas producer in 2022.
Due to investments in one of Brookfield’s “transition” funds, the retirement savings of Ontario teachers and government employees and federal public servants were flowed to a private asset manager and then to oil and gas companies determined to prolong the use of gas plants and oil and gas fields. These companies, backed by Brookfield’s “transition” funds, are banking on the use of a risky, expensive, unproven technology to capture their greenhouse gas emissions and store them underground– instead of ramping up much-needed investment in proven, profitable, scalable climate solutions like renewable energy.
In the case of BGTF1, neither OTPP, PSP, nor IMCO have meaningfully reported to their clients or pension plan members how their savings are ultimately being used.
A green and transition taxonomy is badly needed
The loopholes in Brookfield’s guidance document for “transition” funds and the disappointing votes by nearly all Canadian pension funds underscores the need for regulatory clarity on what constitutes a credible transition investment and what does not. That’s why Shift has consistently called for Canada to develop and implement an enforceable green and transition taxonomy that would serve as a classification system for which activities are aligned with Canada’s climate target of achieving net-zero emissions by 2050.
Where Canada’s financial sector lacks the incentives or willingness to regulate itself, investors and the general public alike would benefit from guardrails that ensure that “green” and “transition” finance are not simply buzzwords. Shift’s shareholder proposal, and the advocacy of Canadians that asked their pension fund to support it, was part of an attempt to ensure that pension capital is invested in companies and assets that have a credible and profitable plan to decarbonize along Paris-aligned emissions pathways. But voluntary guidelines from private equity firms and pension funds are not enough.
A science-based and climate-aligned taxonomy would mandate honesty, prevent greenwashing, create trust and ensure that transition capital is deployed in alignment with its mandate. It shouldn’t take letters from Canadian pension plan members to inform investment managers that their investments are failing to meet credible definitions of “transition” assets.
If Canada’s financial institutions earnestly stand by their green- and transition-labelled investments and investment vehicles, they should be joining us in asking the federal government for a credible, science-based green and transition taxonomy. Canada’s largest pensions should join HOOPP, IMCO and UPP in continuing to publicly call for the finalization of the taxonomy.