Glencore’s head offices in Switzerland.
More than two-thirds of a shareholder vote served to shoot down a climate disclosure resolution tabled at Glencore’s annual general meeting on Friday.
The resolution, which sought greater disclosure from the company, in relation to its coal business and climate goals, was requisitioned by a group of shareholders coordinated by the Australian Centre for Corporate Responsibility and ShareAction, UK-based NGO.
The vote result showed 70.8% of shareholders voted against the resolution while 29.2% voted in favour of it.
Ahead of the AGM, Glencore has advised shareholders not to vote in favour of the resolution.
The resolution proposed that the company be required to disclose how its projected thermal coal production aligns with the Paris Agreement’s objective to pursue efforts to limit the global temperature increase to 1.5 degrees Celsius. It also asked that Glencore provide details of how its capital expenditure allocated to thermal coal production will align with the aforementioned disclosure.
The proposal further required Glencore to explain the extent of any inconsistency between these disclosures with the International Energy Agency’s Net Zero Scenario timelines for the phaseout of unabated thermal coal for electricity generation.
Glencore’s board of directors said they did not consider it to be in the best interests of the company and its shareholders.
The board criticised the resolution as unnecessary, unclear, and undermining the board’s responsibility for the company’s strategy.
Glencore said it was unnecessary because the company’s most recent Climate Report, published on 23 March 2023, clearly sets out details of its strategy in respect of its coal portfolio and capital allocation, and also provides details of progress in meeting strategic objectives, including reducing Scope 3 industrial emissions. The review of the Climate Transition Action Plan during 2023 further presents an opportunity for input from shareholders, the company said.
The board also argued that it is unclear what exactly the resolution is calling for the company to do, as there is inadequate detail on how it is expected to enhance its disclosure.
“The lack of specificity and clarity in the requests set out in the resolution would create uncertainty for both shareholders and the company … [and] would undermine the Company’s effective corporate governance,” the board had said.
While the resolution ostensibly focuses on disclosures, the Glencore board said it believed that the supporting statement gives a strong indication that it is, in fact, intended to direct the company’s strategy by directing the company as to how to manage its thermal coal production and allocate its capital expenditure.
A resolution to approve Glencore’s 2022 climate report was passed at Friday’s AGM, although with only 69.75% of the vote.
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