Publication Pre-AGM analysis: Glencore plc 2023
Research presentation for investors, covering our analysis of Glencore’s 2022 Climate Report; updated analysis on forward coal emissions; the Teck bid; and the co-filed shareholder resolution on thermal coal disclosure.
This May, Glencore investors have an opportunity to provide feedback to Glencore via a vote on the co-filed shareholder resolution that is seeking greater transparency on how the company’s thermal coal production aligns with the Paris Agreement.
ACCR has carefully reviewed the latest coal-related disclosures in Glencore’s 2022 Climate Report, the Teck bid as it stands in mid April 2023, and the Paris-aligned pathway for coal to 2050 according to the IEA Net Zero Emissions pathway.
ACCR is of the opinion that a vote FOR the projected thermal coal production resolution is warranted. All investors - current or potential future shareholders - must have the ability to evaluate exposure to financially material risks in the energy transition. Glencore’s forward thermal coal production and how it is aligned with the Paris Agreement is not currently demonstrated to shareholders, nor is there guidance on how coal capex is aligned.
Key points from the analysis include:
- The 2022 Climate Report fails to demonstrate Glencore’s thermal coal business is aligned with the Paris Agreement, or that its capex commitments on thermal coal are Paris-aligned.
- When charting its emissions reductions targets, Glencore is persisting in using an IEA pathway that includes all fossil fuels, including the slower decline rate of gas (see p.10, 2022 Climate Report), when a coal specific pathway is more appropriate considering emissions from coal production make up ~90% of Glencore’s total emissions. Glencore has resisted investor encouragement to demonstrate alignment with the coal-specific pathway outlined in the IEA’s Net Zero Emissions pathway.
- Based on current disclosures by Glencore and its stated strategy, Glencore’s forecast cumulative emissions from coal production do not appear to be Paris-aligned.
- If Glencore wants investors to trust its strategy is both value accretive and Paris-aligned, then investors require clearer disclosure on the specific alignment of the coal business.
- The proposed Teck merger, demerger and calls for thermal coal spin out, only heightens the importance of greater transparency on how the company’s thermal coal production aligns with Paris, and for investors to signal support for greater disclosure of the climate impact of Glencore’s thermal coal production.
ACCR intends voting FOR the thermal coal production resolution, AGAINST the Climate Report 2022. Investors may choose to vote AGAINST directors as per each investors’ own climate voting policies.
Download our Pre-AGM analysis: Glencore plc 2023 here.
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