A group of institutional investors led by the Australian
The group of institutional investors-which includes
Concern over Glencore's coal production led, at last year's annual general meeting, to almost a quarter of shareholders voting against the company's climate action plan. This resulted in a report published in October where the company agreed to "enhance disclosures" in its Climate Progress Report to be published in
Taking The Temperature: The Glencore resolution is a good example of the convergence of enterprise risk and opportunity assessment, and corporate governance, all arising from climate change. Company shareholders were permitted to require Glencore to circulate the resolution in connection with its Annual Meeting under Article 53.3 of Glencore's Articles of Association (AA). Article 53.3 provides the "Company is required to give notice of a resolution once it has received requests to do so from: (a) members representing at least 2.5 per cent. of the total voting rights of all the members who have a right to vote on the resolution at the Annual General Meeting to which the requests relate (excluding any voting rights attached to any shares in the Company held as treasury shares); or (b) at least 50 members who have a right to vote on the resolution at the Annual General Meeting to which the requests relate and who hold shares in the Company on which there has been paid up an average sum, per member, of at least
At the same time, the Glencore resolution highlights that shareholders, unsurprisingly, remain concerned about the potential impact of climate change on enterprise value. While acknowledging the risks to Glencore associated with climate change, the resolution also observes the potential opportunities arising from a transition to a green economy: "Our Company is well positioned to benefit in the new energy economy. It possesses significant potential to increase strategic focus on boosting transition metal production to aid renewable energy development. In contrast, thermal coal production faces declining demand and is misaligned with efforts to stabilize global temperature rise to 1.5°C. There is potential to enhance the Company's valuation by aligning coal production to a 1.5°C pathway and accelerating investment in transition minerals. Our Company will benefit from actively embracing the climate change challenge. By allocating capital to thermal coal expansion, Glencore is exacerbating its Scope 1 and 3 emissions impacts. We believe more value will be created for shareholders by allocating fossil fuel capex to the energy transition instead."
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