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Product cover image for Brookfield Renewable Partners: Is Entropy a Sustainable Investment?

Brookfield Renewable Partners: Is Entropy a Sustainable Investment?

Jason Gosal, Andre Corona, Katerina Petrou, Josh Weinstein, Patricia Helena Hein

Product #:W36251
Supplier:Ivey
Discipline:Finance, Sustainability
Setting:Canada, 2022
Details:Case (PDF) • 8 pages • 2024-03-19

Subjects:

Leadership and managing peopleFinance and investingManagement

Industries:

Energy and natural resources sector

Geography:

North AmericaCanada
Your Price:$9.71

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An investment proposal reached the offices of Brookfield Renewable Partners (BRP) that outlined an opportunity for BRP to invest $300 million in Entropy Inc., a carbon capture and storage (CCS) company based in Calgary, Alberta. A subsidiary of Brookfield Asset Management, BRP specialized in clean power investments and invested with clear environmental, social, and governance (ESG) criteria and company culture principles. As the investment team reviewed the materials, two key questions were at the top of mind. First, did Entropy’s business model align with BRP’s ESG investment criteria? Second, would the investment generate sufficient financial returns, and how would changes to Canada’s carbon pricing regulation impact the viability of CCS?

Learning Objectives

This case can be taught to third- and fourth-year level business students as an introduction to sustainable finance and its purpose in the economy, as well as pairing with course content on sustainable investment strategies, allowing students to practice ESG investing with actual companies. After working through the case, students will be able to do the following:
  • Analyze ESG criteria: Be able to analyze and identify a sustainable company such as Entropy and assess if it meets BRP’s ESG criteria. Looking at the operations of Entropy, identify what areas BRP can improve through investment, such as business strategy or management structure.
  • Understand carbon regulations: Understand the different federal and provincial regulations and how they affect corporations. Gain a deeper knowledge of CCS technology and how it integrates into the carbon regulations of Canada.
  • Practise critical thinking: Use all information and decide if Entropy is a worthwhile acquisition, and be able to defend your answer. Consider the negative ESG screening that BRP utilizes, evaluate Entropy’s operations, and envision future economic outlooks to formulate a final recommendation.
  • Explore new companies: Learn about new companies and the advances they each are making for a sustainable future. Examine Entropy’s business model and how it monetizes CCS, and think of any other ways this technology could be implemented to advance global ESG standards. Discuss the synergies that could be expected between other BRP renewable energy subsidiaries and Entropy.
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Case Study: Brookfield Renewable Partners: Is Entropy a Sustainable Investment? (English version) | Ivey Publishing