In a notable development at Glencore’s annual general meeting this year, BlackRock and MFS Investment Management, two of its largest institutional shareholders, voted against the company’s climate plan. This decision highlights a growing concern among investors regarding environmental policies.
Glencore, recognized as the world’s most profitable coal miner, has been under scrutiny from its investors for its strategies to reduce emissions while maintaining coal production. Despite this, Glencore’s climate report received 70% approval, although dissent rose to 30%, an increase from 24% in the previous year.
BlackRock, holding an 8.2% stake in Glencore and being its third-largest shareholder, cited inconsistencies in Glencore’s environmental strategy as the reason for its opposition. MFS Investment Management, with a 1.1% stake, also expressed similar concerns.
Prior to the AGM, Glencore attempted a takeover of Teck Resources, a Canada-based coal and metals miner, which was ultimately rejected. However, discussions continue about Glencore potentially acquiring Teck’s coal operations. Glencore has plans for net zero emissions by 2050 and aims to reduce its emissions by 15% by 2026 from a 2019 baseline.
Glencore’s total emissions for 2022 were approximately 370 million tonnes of carbon dioxide equivalent, mainly from indirect emissions due to coal burning by its customers.
Gary Nagle, Glencore’s chief executive, asserted that the vote on the climate report reflected strong shareholder support, attributing the increased dissent to what he described as a superficial evaluation process by some ESG (Environmental, Social, and Governance) focused entities.
Another shareholder resolution, demanding greater clarity on Glencore’s coal strategies, also encountered significant opposition, with 29% in favor and 71% against. This resolution was backed by Legal and General, State Street, and HSBC Asset Management, though none of Glencore’s major institutional shareholders, including BlackRock, supported it.
Following the AGM, Glencore is engaging in consultations with key shareholders about its climate strategy and the shareholder resolution.
Notably, Glencore’s top shareholders include current and former directors, with former CEO Ivan Glasenberg holding the largest share of 9.8%. These private holdings are typically not listed in public shareholder registries unless they constitute over 3% of the company’s shares.
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