Glencore's shareholder opposition to climate report grows

FILE PHOTO: The logo of commodities trader Glencore is pictured in front of the company's headquarters in Baar

LONDON (Reuters) -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 recognise 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.

(Reporting by Clara Denina in London and Anchal Rana in Bengaluru; editing by Simon Jessop and Susan Fenton)