HSBC AM and LGIM among coalition challenging Glencore thermal coal production

HSBC Asset Management and Legal and General Investment Management are among a group challenging Glencore over its thermal coal production and impact on the planet.

The coalition, which collectively represents $2.2trn of assets under management, has co-filed a shareholder resolution with the world's largest coal trader seeking transparency on how its thermal coal production aligns with the Paris Agreement's 1.5-degree target.

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It marks the first climate resolution focused on Glencore's thermal coal production and follows the recent challenges for the firm, which saw almost 25% of shareholders reject its climate plan in 2022.

Co-filed with the Australasian Centre for Corporate Responsibility and ShareAction, the proposals seek disclosure of how Glencore's projected thermal coal production and capital expenditure aligns with the Paris Agreement.

Global ESG analyst at LGIM Dror Elkayam called for a "higher degree of transparency" from Glencore in order to understand whether the firm's exposure to thermal coal corresponds with its net zero commitment.

Meanwhile, Naomi Hogan, strategic projects lead at ACCR, highlighted the "significant exposure" Glencore has to thermal coal and described the resolution as a "catalyst" for clear disclosure of the firm seeks to manage climate risks, adding the recent withdrawal of an application for a new coal mine in Australia shows substantial reductions in coal output are possible.

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Michael Wyrsch, CIO and deputy CEO at coalition member Vision Super, described Glencore's continued thermal coal investment as "disappointing" and incompatible with its public commitment to the Paris Agreement.

He added the firm has a "tremendous opportunity" to be part of and profit from the global energy transition, particularly with its exposure to growing key commodities copper and nickel, along with its expanding recycling business.