Prominent Glencore investors including Legal & General and HSBC have filed a shareholder resolution challenging the mining giant over its coal production plans.
The investors want to force Glencore to disclose how its projected output of polluting thermal coal is compatible with the Paris climate goal of limiting global warming to 1.5C.
Glencore is one of the world’s biggest commodities groups, with operations spanning mining and trading. The FTSE 100 group reported bumper net profits of $12.1 billion in the first half of last year, driven in large part by the soaring price of thermal coal, which is burnt in power stations.
Coal accounted for almost $9 billion out of $15 billion adjusted ebitda (earnings before interest, tax, depreciation and amortisation) in its mining business. Although this includes some coking coal for steelmaking, thermal coal makes up about 90 per cent of its production.
Glencore has pledged to cut its carbon footprint to net zero by 2050, including eliminating the emissions generated by customers using its products. It has said that it will retain but run down its coal business and last month said it would close 12 coalmines by 2035.
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The shareholder resolution is backed by investors with $2.2 trillion of assets under management, among them Legal and General Investment Management, Britain’s biggest asset manager; Vision Super, an Australian industry super-fund; and HSBC Asset Management. It has been co-ordinated by the UK-based NGO ShareAction and the Australasian Centre for Corporate Responsibility.
Legal & General said that “a higher degree of transparency is necessary” from Glencore.
At its annual meeting in April last year almost 24 per cent of shareholders rejected Glencore’s climate progress report. Glencore said in October that “the overwhelming majority of shareholders reiterated their support for our current responsibly managed coal decline strategy and associated targets”.
A Glencore spokesman said the company “will publish its next climate progress report in March”.
