Glencore faces investor unrest at AGM
May 23, 2023
Mining company Glencore faces increased pressure from investors seeking greater transparency on how its thermal coal production aligns with the Paris Agreement.
Ahead of the annual general meeting on May 26, nine institutional investors representing $596bn in assets have urged investors to vote for a co-filed shareholder resolution.
The shareholder resolution was first filed by a coalition of investors, including Legal & General Investment Management (LGIM) and HSBC Asset Management, in December 2022.
The resolution demands increased clarity on how Glencore’s thermal coal projects align with the company’s public commitment to support the Paris Agreement.
In March, Glencore – the world’s largest coal trader – published a report that outlined the company’s short-term plans to reduce Scope 1, Scope 2, and Scope 3 emissions by 15% before the end of 2026.
The climate progress report also set targets to further reduce emissions by 50% by the end of 2035 and achieve net-zero emissions by 2050.
However, Scottish Widows and EFG Asset Management are among the new investors to argue that the short and medium-term targets are not in line to a realistic 1.5°C pathway.
In a joint statement published by the Australian Centre for Corporate Responsibility (ACCR), the investors agreed the report fails to demonstrate how Glencore is aligned with the Paris Agreement.
According to ACCR, Glencore has also resisted investor encouragement to demonstrate alignment with the coal-specific pathway outlined in the International Energy Agency’s Net Zero Emissions Pathway.
Simona Campioni, senior ESG analyst at EFG Asset Management, said: “Glencore has been playing cat-and-mouse with its stakeholders on environmental issues for several years. The time has come to give up coal expansion projects once and for all.”
However, Glencore has opposed the shareholder resolution and urged investors to vote against it as the resolution was unnecessary given existing strategy disclosures.
The resolution also lacked clarity and specificity and risked undermining the board’s responsibility for its climate strategy, according to Glencore.
In response, LGIM said Glencore’s decision to not support the shareholder resolution demonstrated a “fundamental lack of willingness to engage”.
Last Updated: 23 May 2023