Investor support for Glencore’s climate change strategy weakened, obliging the world’s top coal shipper to again consult with shareholders as it defends one of its most profitable businesses.
While many rivals have long retreated from thermal coal under pressure from investors, Glencore has continued reaping massive profits from mining the dirtiest fossil fuel. The company says the hydrocarbon is essential for the energy transition, but an increasing number of investors don’t want to own coal.
Glencore secured about 70% support for its climate progress report at its annual general meeting on Friday, less than the 76% backing it received last year. Almost 30% of shareholders also backed a resolution urging the company to explain how its thermal coal business aligns with efforts to limit the increase in global temperatures to 1.5 C. That means the commodities giant must engage with investors on both resolutions.
“We will continue to engage with shareholders so as to ensure their views are fully understood and to better understand the reasons behind these results,” Glencore said.
The vote comes as Glencore is in the process of trying to buy rival miner Teck Resources in a $23-billion deal. Glencore — which has been rebuffed by Teck so far — wants to create two new companies, combining their respective metals and coal businesses.
A resolution put forward by shareholders with more than $2-trillion of assets under management, urging the company to explain how its thermal coal business aligns with efforts to limit the increase in global temperatures to 1.5 C, failed to get the 50% backing needed for it to be adopted. However, the support it did receive will force Glencore to engage with investors.
Glencore has already introduced a cap on its coal production and promised to reach net-zero emissions by 2050.
About 10% of shareholders also voted against the reelection of the company’s chairman,