Blackrock voted against Glencore’s climate report

Breadcrumb Trail Links Mining BlackRock concerned about ‘inconsistencies’ in strategy…

BlackRock concerned about ‘inconsistencies’ in strategy

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BlackRock Inc. has revealed it didn’t support Glencore PLC‘s climate-resolution proposal at the miner’s annual general meeting in May.

In a report published late last month, BlackRock, a major Glencore shareholder, said that although Glencore improved its disclosure of climate-related risks and opportunities, it is “concerned” that aspects of the mining giant’s climate proposals and “recent developments have pointed to inconsistencies in the company’s stated strategy.”

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The move echoes concerns raised by some Canadian politicians earlier this year over Glencore’s failed attempts to take over Teck Resources Ltd., Canada’s largest diversified miner.

British Columbia Premier David Eby in April said he felt Glencore would struggle to meet his province’s high environmental, social and governance (ESG) standards, while some mayors of towns that host Teck’s steelmaking coal mines said a deal with the Swiss mining giant would hurt the region’s image since it would connect Teck to Glencore’s heavy reliance on thermal coal, which is a major carbon emitter.

Thermal coal is responsible for about 70 per cent of Glencore’s coal business. In the long run, the company hopes to run down its coal assets, but believes the commodity is still required as a transition fuel.

Glencore has committed to reduce its emissions by half by the end of 2035 compared to its 2019 numbers. It is aiming to stop mining activity at a minimum of 12 of its coal mines by the end of 2035 to support its target. Its long-term goal is to achieve net-zero emissions by the end of 2050.

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Teck’s B.C. coal assets

But the Swiss miner is still keen on expanding its coal business as it hopes to buy Teck’s coal assets in B.C. despite failing to purchase the entire company. In August, Glencore said it was holding back cash that it would have otherwise returned to shareholders for a potential purchase of Teck’s coal business.

Teck is expected to make a decision about the sale of its coal assets towards the end of the year. The company said it has received interest from multiple parties for its business. Some analysts believe Teck is more likely to do a partial sale of its coal unit.

Overall, shareholder dissent on Glencore’s climate report rose to 30.25 per cent in the 2023 AGM, up from 23.7 per cent in 2022 and 5.6 per cent in 2021.

While Blackrock voted against Glencore’s climate proposal, it also voted against a shareholder proposal urging the miner to provide more insight on how its climate-action plan meets global climate targets. The proposal was not in the shareholders’ best interests, BlackRock said in a disclosure on its website.

Both Glencore and BlackRock declined to comment.

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Bluebell Capital Partners Ltd., a much smaller Glencore shareholder, in a statement said Blackrock’s decision to stop supporting Glencore’s climate report was a “massive blow” for the Swiss miner.

Bluebell Capital in June said it wanted Glencore’s board to replace its chief executive Gary Nagle, as Glencore wasn’t following its goal of becoming a “world-class” player in green economy metals and was instead on its way to becoming an “undisputable leader” in coal.

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