At the upcoming May 2023 AGM, Glencore’s shareholders are encouraged to vote in favour of an institutional investor co-filed resolution focused on thermal coal. The resolution asks Glencore to disclose how its projected thermal coal production and capital expenditure aligns with the Paris Agreement’s goals and the International Energy Agency (IEA) Net Zero Emissions pathway.
This is the first time investors have filed a climate resolution specifically focusing on Glencore’s thermal coal production, and is an escalation of pressure on Glencore, already on notice after nearly one quarter of shareholders rejected its climate plan in 2022.
Glencore plc is the world’s largest coal trader and ~90% of its disclosed scope 1, 2 and 3 emissions are attributable to its coal production activities.
Major institutional investors spanning Europe, the United Kingdom and Australia have co-filed this shareholder resolution at Glencore plc for a vote at its AGM on 26th May 2023. The resolution is seeking greater transparency on how Glencore’s thermal coal production going forward aligns with the Paris objective of keeping global temperature increase to 1.5°C.
This is the first time investors have filed a climate resolution specifically focusing on Glencore’s thermal coal production. Investors want clarity on how Glencore’s ongoing pursuit of thermal coal projects aligns with the company’s public commitment to support the Paris Agreement.
This resolution comes after years of climate engagement with the company. Glencore investors have already placed the company on notice over its lack of a credible plan to run down coal, with 24% of shareholders voting against the company’s Climate Plan at the 2022 AGM.
This resolution will be voted on at the 2023 AGM, due to be held in Switzerland in May, and asks Glencore to outline:
- How its forward thermal coal production is Paris aligned
- How its CAPEX for thermal coal is Paris aligned
- If its thermal coal production aligns with the IEA NZE timelines for the phase out of unabated thermal coal for electricity
The most recent 2022 IEA Net Zero Emissions (NZE) scenario offers a 1.5°C-aligned outlook for coal demand that considers the impact of the global energy crisis. Phasing out coal for electricity generation is a central pillar of the scenario, with demand falling by two thirds between 2021 and 2030. The report states, “Despite a temporary boost from the current energy crisis… the share of unabated coal in global electricity generation falls rapidly from 36% in 2021 to 12% in 2030, and to zero percent by 2040 and beyond.”
While Glencore has made a public commitment to “manage the decline of [its] fossil fuel portfolio in a responsible manner”, its latest Climate Report outlines the company is continuing with brownfield coal mine extensions and expansions in Australia, and is considering a new greenfield coal to hydrogen project. These latest disclosures do not provide the desired certainty surrounding Paris alignment sought in the resolution.
With investment and capital allocation towards thermal coal carrying higher climate transition risks over the coming decade, we believe this resolution warrants engagement from all Glencore investors.
Institutional co-filers of this resolution include Legal and General Investment Management (LGIM), Ethos Foundation on behalf of large Swiss pension fund members of the foundation including Pensionskasse Post and Bernische Pensionskasse, Vision Super and HSBC Asset Management. The proposal was facilitated and co-filed with the Australasian Centre for Corporate Responsibility (ACCR) and UK-based responsible investment NGO ShareAction.
Investors are urged to vote in support of this thermal coal disclosure resolution to Glencore plc.