Submitted by a coalition of international investors with the support of the Ethos Foundation, the shareholder resolution calls for greater transparency from the Zug-based company, in particular with regard to the compatibility of its production and investments in coal with a global warming limit of 1.5°C.
At Glencore's 2023 Annual General Meeting to be held on 26 May, Ethos recommends the approval of a shareholder resolution calling for greater transparency on the company’s climate strategy (item 19 of the agenda). On the other hand, Ethos recommends to vote against the climate report ("Say on Climate", item 13) proposed by the board of directors. Ethos believes that Glencore's climate strategy is insufficient. The company does not have a scientifically validated reduction target and its current exposure to fossil fuels remains too high.
The shareholder resolution supported by Ethos asks Glencore to clarify how its production and investments in coal are compatible with the objectives of the Paris Agreement (limiting global warming to 1.5°C) as well as with its own climate commitments. As a reminder, the Zug-based – but London-listed – company has set itself the target of reducing its net greenhouse gas emissions to zero by 2050 ("Net Zero 2050").
However, according to the investor coalition behind the shareholder resolution, there is currently insufficient evidence to demonstrate that Glencore's planned developments and investments in the coal sector will bring the company's emissions in line with the Paris Agreement targets.
0.6% of global greenhouse gas emissions
The climate resolution was filed at the end of 2022 by a coalition of institutional investors led by the Australasian Centre for Corporate Responsibility (ACCR) and ShareAction and representing over USD 2 trillion in assets under management. Although Ethos was not directly part of this coalition – its investment policy excludes companies active in the coal sector – it nevertheless contributed to mobilise some of its members, including the pension funds of the canton of Bern (BPK) and of the Swiss Post, in order to increase the number of Glencore shares required to file the resolution.
This is the first time that investors have filed a climate resolution specifically on Glencore's thermal coal production. The increased engagement follows the rejection of the company's climate strategy by 24% of shareholders at the 2022 AGM, the full takeover of the Cerrejon coal mine in Colombia and the opening of new coal mines in Australia.
In a document published in early May, ACCR reminds that Glencore's annual emissions amount to 280 million tonnes of CO2e, or about 0.6% of total global emissions, and that coal ac-counts for 90% of these emissions.
While some of Glencore's activities are well positioned to benefit from the energy transition, others pose a significant climate risk for shareholders, particularly financial," says Vincent Kaufmann, CEO of Ethos. “The transparency called for by the climate resolution will allow shareholders to verify whether Glencore's capital expenditures are in line with the company's commitments. It is essential to protect the long-term interests of all the company's stakeholders”.