18 May 2023 3 min read

Turning up the heat on Glencore’s coal production strategy

By Dror Elkayam , Jeannette Andrews

It's not clear how thermal coal production aligns with the company's commitment to the Paris Agreement, so we have co-filed a shareholder proposal calling for more disclosure.


In 2021, Glencore* made a public commitment to align its targets and ambition with the goals of the Paris Agreement. However, it remains unclear how the company’s planned thermal coal production aligns with global demand for thermal coal under a 1.5°C scenario.

Therefore, LGIM has co-filed a shareholder proposal at Glencore’s 2023 AGM calling for disclosure on how the company’s thermal coal production plans and capital allocation decisions are aligned with the Paris objectives.

The proposal was filed together with Ethos Foundation on behalf of Pensionskasse Post and Bernische Pensionskasse, Vision Super, HSBC Asset Management, the Australasian Centre for Corporate Responsibility (ACCR) and ShareAction.

First-ever shareholder resolution to Glencore focusing on thermal coal

This proposal was filed as an organic escalation following our multi-year discussions with the company since 2016 on its approach to the energy transition. By filing this first-ever shareholder resolution to be submitted to Glencore on thermal coal, we are exercising our commitment as a large, responsible investor to hold companies to account on their approach to the energy transition.

In 2021, we publicly called on companies to propose a ‘Say on Climate’ vote, allowing shareholders to cast their verdict on the climate-transition plans proposed by management. A year later, we laid out LGIM’s criteria to support such plans, and committed to increase the pressure on companies that fail to put suitably ambitious and credible transition plans to a shareholder vote by filing shareholder resolutions, as we consider them to be a targeted tool to drive impact.

At the 2022 AGM, we voted against the company’s climate plan, which was subject to a significant level of shareholder dissent, with 24% of the shareholder vote cast against the plan. Some of our key concerns included the potential misalignment between the company’s planned thermal coal production and its climate-related targets and commitments.

Why Glencore?

Glencore is a large global diversified miner, with a sizeable asset base of metals such as copper, zinc and nickel, which are critical to support the energy transition. However, it is also the world’s largest producer of thermal coal,1 a commodity primarily used in electricity generation, where demand is expected to decline rapidly if we are to achieve the Paris objectives of 1.5C.

Phasing out coal for electricity generation is a central pillar in the most recent 2022 IEA Net Zero Emissions (NZE) scenario, with demand falling by two-thirds between 2021 and 2030.

Given its diversified business, we want to see Glencore playing a leading role in the energy transition as the global economy decarbonises. There is currently a question mark over exactly how the company’s net zero commitments align with its thermal coal production outlook. This is why we have collaborated with like-minded investors to seek more disclosure by filing this proposal. In what we see as a strong sign of support, the most influential proxy advisers, ISS and Glass Lewis, have recommended shareholders to vote in favour of the proposal.

For more information about how we are voting, please refer to our pre-declaration blog.  


*For illustrative purposes only. Reference to a particular security is on a historic basis and does not mean that the security is currently held or will be held within an LGIM portfolio. The above information does not constitute a recommendation to buy or sell any security.


1. Source: https://www.glencore.com/who-we-are/at-a-glance#:~:text=Founded%20in%20the%201970s%20as,emerging%20regions%20for%20natural%20resources.

Dror Elkayam

Senior Global ESG Manager, Investment Stewardship

Dror joined the investment stewardship team in 2021 as a Global ESG Analyst, leading engagements with the energy and mining sectors, as well as the development of LGIM’s ESG scores. Dror Joined LGIM from Georgeson, a boutique corporate advisory firm, where he acted as an adviser to investors and corporates on shareholder engagement strategies, in preparation for general meetings, proxy contests and M&A in the UK and globally. Prior to that, Dror had spent nearly five years at Bloomberg as an ESG specialist. Dror graduated from Bar-Ilan University in 2012 with a BA in Economics and Business Management and obtained the CFA chartership in 2019.

Dror Elkayam

Jeannette Andrews

Senior Global ESG Manager

Jeannette has responsibility for implementing LGIM's corporate-governance strategy across engagement, integration, voting and the development of ESG products. Jeannette represents LGIM on the UK's Company Reporting & Auditing Group. Jeannette joined LGIM in 2015 from USS Investment Management where she held the title of Senior Analyst, Responsible Investment. Jeannette joined USS in 2008, dividing her time between developing and implementing USS's stewardship policies and working as an equity analyst where she was responsible for researching and making stock recommendations for a £420 million global equity income portfolio. Prior to that, she worked for five years as a governance analyst at Manifest Information Services, a proxy voting service provider. Jeannette graduated from Anglia Ruskin University in 2008 and holds the CFA and CAIA charterships. In 2014 Jeannette was recognised by Financial News as one of the 40 under 40 Rising Stars of Asset Management.

Jeannette Andrews