Investors join union in plea for equity firm to set clear emissions-reduction targets
BCGEU celebrates strong first shareholder vote at Brookfield Asset Management AGM after launching ambitious climate action campaign
BURNABY – At the annual meeting of shareholders, over 17% of Brookfield (TSX:BAM.A) Class A shareholders voted in favour of a shareholder proposal asking Brookfield to have its largest subsidiaries set clear emissions reductions goals in line with the Paris Agreement by 2025. The vote result comes after Brookfield refused to meet with proponent of the proposal, the B.C. General Employees' Union (BCGEU). Brookfield also denied the union the opportunity to personally introduce and present the proposal at the June 10 meeting, as is customary for the presentation of such proposals at shareholder meetings.
"We hoped to engage with Brookfield about meaningful climate solutions, but instead the company chose to undermine shareholder rights and refused to meet with us. Brookfield investors are clearly concerned about climate risk and want to see firm climate action goals. We hope this vote pushes the company to take action. We will be closely monitoring the situation and may consider refiling this proposal."
Brookfield Asset Management has committed to achieving a net-zero portfolio by 2050, yet it does not require the company where it holds a 64 per cent stake, Brookfield Business Partners (BBU), to officially report reduction targets that would help meet this goal. This is a concerning oversight.
Currently, neither Brookfield affiliate BBU nor Brookfield Infrastructure Partners (BIP) disclose any emissions reduction targets, even though Institutional Shareholder Services (ISS) found that Brookfield assumes a high climate risk exposure because of its heavy investment in fossil-fuels. Proxy advisory firm Glass Lewis recommended that Brookfield shareholders vote in favour of BCGEU's proposal, calling the proposal "reasonably crafted" and "in line with the Company's stated commitments".
The BCGEU believes emissions reduction targets from BBU and BIP will become more pressing following Brookfield's recent disclosure of its intention to split its asset management business from its proprietary assets business. Once this split is complete, Brookfield's financial results will become increasingly dependent on the contributions of BBU and BIP.
BCGEU democratically decided to divest from fossil-fuels in 2015, and the union launched its responsible investment program to leverage investor power to not only to protect and grow members' assets but also to push portfolio companies to take progressive action on issues that matter to working people including on climate and enhanced corporate governance.
"In a world where working people often feel powerless against mounting ecological disaster, BCGEU members are showing their neighbours that we do have a say in our future. We can course correct, and we can pressure big players to do the right thing and put money where it will thrive – in sustainable investments, not volatile markets that hurt investors, workers, and the planet," said Smith.
BCGEU's shareholder program has pushed RBC to stop doing business with the United States private prison industry, Saputo to reduce its food waste by 50 per cent by 2035, and Thomson Reuters to adopt the UN Guiding Principles on Business and Human Rights.
View the BCGEU's investor letter here.
The company's response to the proposal can be found in its management circular on page 79.
About BCGEU: BCGEU is one of the largest unions in British Columbia, with over 85,000 members in almost every community and economic sector in the province. Under BCGEU's capital stewardship strategy, the union has submitted shareholder proposals at some of Canada's largest companies on topics like human rights, racial equity, and executive compensation. The union's strategy has succeeded in achieving strong commitments on ESG issues.