Reuters | May 26, 2023 |
Rolleston coal mine in Central Queensland, Australia.. (Image courtesy of Glencore.)
Just over 30% of Glencore’s investors rejected the company’s climate progress report at its annual meeting on Friday, demanding more clarity on how the global miner will meet its commitments to cut emissions.
Around 29% of shareholders also backed a shareholder resolution seeking more disclosure on progress in scaling back thermal coal production.
Many of the world’s biggest listed companies published their first climate action plans in 2020 to cut emissions in a bid to help with reaching the 2015 Paris Agreement goal of capping temperatures within 1.5 degrees Celsius.
Glencore mines and trades thermal coal, used to generate electricity, and has said it plans to run down its mines by the mid-2040s, closing at least 12 by 2035.
Its strategy to responsibly phase out the fossil fuel signalled a divergence from peers Anglo American and Rio Tinto, which had sold or spun out coal assets, and had been welcomed by shareholders in 2021.
But some have expressed concern this year over how much Glencore is disclosing about its thermal coal output plans.
Britain’s largest asset manager Legal & General Investment Management and the fund arm of lender HSBC were among investors to file a request for more information to assess the company’s alignment with global climate goals.
Shareholder advocacy body Australian Centre for Corporate Responsibility (ACCR), which filed the resolution, said it had secured the second-highest vote ever at a London-listed company in favour of a climate-related resolution that was not supported by management.
“Glencore must recognize that neither the risks of its thermal coal business nor the concerns of investors are going away,” said Naomi Hogan, strategic projects lead at ACCR.
Deputy CEO Simon Rawson of co-filer ShareAction, said: “The scale of investor support for this resolution reflects the level of frustration at Glencore’s inactivity over a number of years to set out a credible plan for their coal business that meets the ambitions of the Paris Agreement to urgently address global warming.”
Glencore had said in a statement dated May 3 that it opposed the shareholder motion because it risked undermining the board’s responsibility for its climate strategy, given existing disclosures.
Opposition to its climate progress passing the 20% threshold constitutes material dissent among shareholders.
“We will continue to engage with shareholders so as to ensure their views are fully understood and to better understand the reasons behind these results,” Glencore said in its AGM results statement.
(By Clara Denina and Anchal Rana; Editing by Simon Jessop and Susan Fenton)
Glencore Loses More Support for Climate Plan as Coal Questioned
This content was published on May 26, 2023 -
(Bloomberg) -- Investor support for Glencore Plc’s climate change strategy weakened, obliging the world’s top coal shipper to again consult with shareholders as it defends one of its most profitable businesses.
While many rivals have long retreated from thermal coal under pressure from investors, Glencore has continued reaping massive profits from mining the dirtiest fossil fuel. The company says the hydrocarbon is essential for the energy transition, but an increasing number of investors don’t want to own coal.
Glencore secured about 70% support for its climate progress report at its annual general meeting on Friday, less than the 76% backing it received last year. Almost 30% of shareholders also backed a resolution urging the company to explain how its thermal coal business aligns with efforts to limit the increase in global temperatures to 1.5 C. That means the commodities giant must engage with investors on both resolutions.
“We will continue to engage with shareholders so as to ensure their views are fully understood and to better understand the reasons behind these results,” Glencore said.
The vote comes as Glencore is in the process of trying to buy rival miner Teck Resources Ltd. in a $23 billion deal. Glencore — which has been rebuffed by Teck so far — wants to create two new companies, combining their respective metals and coal businesses.
While that would allow Glencore to hive off its thermal coal business, the company has said it has no plans to do so outside of a transaction unless the majority of its shareholders demand it.
A resolution put forward by shareholders with more than $2 trillion of assets under management, urging the company to explain how its thermal coal business aligns with efforts to limit the increase in global temperatures to 1.5 C, failed to get the 50% backing needed for it to be adopted. However, the support it did receive will force Glencore to engage with investors.
Glencore has already introduced a cap on its coal production and promised to reach net-zero emissions by 2050.
About 10% of shareholders also voted against the reelection of the company’s chairman, Kalidas Madhavpeddi.
This content was published on May 26, 2023 -
(Bloomberg) -- Investor support for Glencore Plc’s climate change strategy weakened, obliging the world’s top coal shipper to again consult with shareholders as it defends one of its most profitable businesses.
While many rivals have long retreated from thermal coal under pressure from investors, Glencore has continued reaping massive profits from mining the dirtiest fossil fuel. The company says the hydrocarbon is essential for the energy transition, but an increasing number of investors don’t want to own coal.
Glencore secured about 70% support for its climate progress report at its annual general meeting on Friday, less than the 76% backing it received last year. Almost 30% of shareholders also backed a resolution urging the company to explain how its thermal coal business aligns with efforts to limit the increase in global temperatures to 1.5 C. That means the commodities giant must engage with investors on both resolutions.
“We will continue to engage with shareholders so as to ensure their views are fully understood and to better understand the reasons behind these results,” Glencore said.
The vote comes as Glencore is in the process of trying to buy rival miner Teck Resources Ltd. in a $23 billion deal. Glencore — which has been rebuffed by Teck so far — wants to create two new companies, combining their respective metals and coal businesses.
While that would allow Glencore to hive off its thermal coal business, the company has said it has no plans to do so outside of a transaction unless the majority of its shareholders demand it.
A resolution put forward by shareholders with more than $2 trillion of assets under management, urging the company to explain how its thermal coal business aligns with efforts to limit the increase in global temperatures to 1.5 C, failed to get the 50% backing needed for it to be adopted. However, the support it did receive will force Glencore to engage with investors.
Glencore has already introduced a cap on its coal production and promised to reach net-zero emissions by 2050.
About 10% of shareholders also voted against the reelection of the company’s chairman, Kalidas Madhavpeddi.
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