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May 19, 2023

Glencore investors advised to vote against climate progress report

PIRC behind similar recommendations to BP and Shell shareholders

Investors are being urged to oppose commodity company Glencore’s climate progress report, which lacks transparency on how targets will be implemented, according to Pensions & Investment Research Consultants (PIRC).

PIRC has asked shareholders to instead support resolution 19 at the upcoming AGM. Resolution 19 calls for Glencore’s projected thermal coal production to align with the Paris Agreement, which focuses on limiting global warming to 1.5°C.

Glencore’s climate progress report, released in March, aims to reduce Scope 1, Scope 2 and Scope 3 emissions by 15 percent before the end of 2026. It also focuses on further reducing the emissions by 50 percent by the end of 2035 and having net-zero emissions by 2050.

Glencore investors advised to vote against climate progress report
Paul Hunter, PIRC

But PIRC argues that the company’s short and medium-term targets are not aligned to a realistic 1.5°C pathway.

Paul Hunter, head of policy at PIRC, says: ‘Time is running out to avoid the worst impacts of climate change and reduce the climate-related risks facing investors. This means those companies in high-emitting sectors, including mining, urgently need to be setting adequate short-term targets as part of climate-credible action plans.’

Failure to address climate risks

The proxy adviser made a similar recommendation to shareholders at energy companies BP and Shell. In Shell’s case, PIRC says resolution 25, which asks shareholders to approve Shell’s Energy Transition Progress for the year 2022, failed to address its climate risks in the latest report.

The adviser further expresses concerns over Shell allegedly not setting ‘absolute’ emissions reduction targets for Scope 3 emissions.

PIRC instead recommends investors vote in favor of shareholder resolution 26, filed by activist group Follow This, which calls on the company to align its Scope 3 reduction targets with the goals of the Paris Agreement.

The Glencore board has asked investors to vote against PIRC’s recommended resolution at the upcoming AGM. It says it considers the resolution to ‘not be in the best interests of the company and its shareholders as a whole’ and unanimously recommends voting against it.

In the AGM notice statement, Glencore says: ‘It is unclear what exactly the resolution is calling for the company to do. Resolution 19 therefore seeks both to undermine the board’s role in setting the company’s strategy and to impair the effectiveness of the process for shareholder engagement on climate-related matters that the board has already set out.’