Big investors challenge Glencore’s alignment with Paris climate goals

Melbourne — International investors with $2.2-trillion in assets will ask commodity giant Glencore to show how its development of thermal coal mines meets the goals of the Paris climate accord to keep global warming to 1.5°C.

Glencore is one of the world’s largest producers and traders of the fossil fuel used in power generation and record prices of the commodity helped add some $10bn to its earnings in the six months to June.

Major institutional investors, including Europe’s Legal and General Investment Management (LGIM), said in a joint statement they have cofiled a shareholder resolution that asks Glencore to reveal how its production and capital expenditure plans align with the Paris goals and the International Energy Agency (IEA) Net-Zero Emissions (NZE) pathway.

“Having both invested in and engaged with Glencore over many years, a higher degree of transparency is necessary ... 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,” said Dror Elkayam, an analyst in investment stewardship at LGIM.

Other investors include the Swiss-based Ethos Foundation, Australian pension fund Vision Super and HSBC Asset Management.

The resolution is to be presented for a vote at Glencore’s annual shareholder meeting in 2023.

Glencore has pledged to hit net-zero carbon emissions by 2050 and responsibly run down its mines producing thermal coal, the most polluting fossil fuel, by the mid-2040s.

However, at its April AGM, almost a quarter of investors voted against its climate progress report, some citing slow progress in scaling back coal production.

A member alert from the Institutional Investors Group on Climate Change (IIGCC), at the time, said that “Glencore needs to cut coal production much faster over the next decade to be consistent with a 1.5-degree scenario”.

Glencore produced 103.3-million tonnes in 2021 from mines in Australia, SA and Columbia.

Reuters