Own coal! Pushback on Glencore climate plans

The results from Glencore’s AGM last Friday are out, and they make for interesting reading. There were strong votes for a shareholder resolution filed by investors led by the Australasian Centre for Corporate Responsibility (ACCR) and against the company’s own climate plan and Chair. This followed PIRC’s call for shareholders to oppose Glencore’s current climate policies, and leaves the company with plenty of work to do to reengage shareholders on these issues.

29.2 percent voted in favour of the shareholder resolution calling for greater disclosure of climate metrics. It called for an explanation of how Glencore’s projected thermal coal production and capital expenditure aligns with the Paris Agreement’s 1.5C target. It also demanded clarification on the extent of any inconsistency between the company’s projected coal production and the IEA Net Zero Scenario’s timeline for phasing out unabated coal.

Many investors were clearly amenable to PIRC’s thinking that greater disclosure would benefit shareholders, who could make a more informed judgement related to the impact of different climate scenarios on their investments. Investors deserve greater clarity regarding their holdings, and if companies are not able or willing to provide it, then escalation is the next obvious step to ensure that they are in possession of all relevant information.

Similarly, PIRC recommended voting against the company’s own climate plan. 30.25 percent did so, up from 23.72 percent last year. PIRC’s Carbon 1.5 Proxy Voting service identified the lack of shortand medium-term targets aligned to a realistic 1.5C pathway, essential for a company considered vital for the global transition. Without them, shareholder accountability on climate performance becomes so much harder, again raising questions about whether investors have all the relevant information to make informed decisions on their holdings.

PIRC also advised voting against the re-election of Kalidas Madhavpeddi as Chair, with 11.19 percent opposing his reappointment (up marginally from 10.69 percent last year). He is ultimately responsible for the company’s climate plans, and with it the lack of meaningful short- and medium-term plans, as well as the shortage of relevant disclosures on how Glencore plans to align with the Paris Agreement and IEA stipulations.

Simon Rawson of ShareAction, who also supported the shareholder resolution, said: “The scale of investor support for this resolution reflects the levels 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”.

With three votes against the company exceeding 10 percent, management should work to engage with shareholders on how these issues can be rectified. Following 2022’s vote against the chair, the company failed to disclose how it would address the issues raised by shareholders. Rawson called for a change in approach following 2023’s vote.

“Instead of ignoring the realities of the damage coal is doing ot our planet and its people, Glencore needs to meaningfully engage with their investor and civil society stakeholders who have driven this resolution, and deliver a robust plan showing how they will transition from a dirty past to a clean future.” The company has committed to updating investors on engagement over the shareholder resolution and vote against the climate action plan within six months, as stipulated by the UK Governance Code.

If Glencore genuinely takes this opportunity to engage with investors about what needs to happen to avoid such votes in the future, then climate policies that are more robust and sustainable (for the planet and returns) can be devised. This vote sends a message to Glencore that for a large part of its shareholding, it can no longer be business as usual.