Glencore’s coal projects targeted in shareholder resolution
An investor coalition with $2.2trn of assets is focusing attention on the mining giant’s thermal coal operations.
A coalition of shareholders including Legal and General Investment Management (LGIM) and HSBC Asset Management has submitted a shareholder resolution at the world’s largest coal trader, Glencore, seeking transparency on how the company’s thermal coal production aligns with Paris Agreement climate goals.
The coalition collectively represents $2.2trn of assets under management and will add to the growing pressure on Glencore. It is the first time that investors have filed a climate resolution specifically focusing on Glencore’s thermal coal production, and follows from nearly one quarter of shareholders rejecting the firm’s climate plan during the 2022 AGM season.
Co-filed with the Australasian Centre for Corporate Responsibility and responsible investment pressure group ShareAction, the resolution calls for Glencore to provide clarity on how its thermal coal projects can match with its publicly stated goal of supporting the objective of limiting global temperature increases to 1.5°C.
Age of engagement
The resolution is an early sign of what may prove to be a busy AGM season for shareholder engagement on climate resolutions. In 2022, investors filed a record 215 climate-related shareholder resolutions.
Last month Glencore abandoned plans to develop a coal project worth $1.3bn in Queensland, Australia, with one of the reasons given being its stated desire of being a net-zero business by 2050.
Dror Elkayam, ESG analyst at LGIM, said: “Having both invested in and engaged with Glencore over many years, a higher degree of transparency is necessary in order to clarify how the company’s exposure to thermal coal is aligned with the 1.5°C pathway and corresponds to its net-zero commitment.”
Further signatories to the resolution include the Ethos Foundation, which was created in 1997 with the goal of enabling Swiss pension funds to invest responsibly, and Vision Super, an industry fund that contains $8.2bn in assets managed on behalf of around 84,000 member accounts.
Michael Wyrsch, chief investment officer at Vision Super, said: “Glencore has a tremendous opportunity to be part of and profit from the energy transition. It is well placed with its exposure to many key commodities for the transition including copper and nickel.
“That’s why it is so disappointing to see Glencore continuing to invest in thermal coal, which is a contracting industry. Glencore’s strategy does not reconcile with the company’s public commitment to alignment with the Paris Agreement.”
The resolution will be voted on at Glencore’s Annual General Meeting, to be held on 26 May 2023.