Investment Manager LGIM Divests From Glencore Over Coal Business

Legal & General Investment Management (LGIM) is divesting shares in Glencore from its ESG funds over concerns that the mining giant doesn’t have a path to net zero amid continued thermal coal production.

Legal & General (L&G) has expanded its climate engagement reach and, as part of the engagement with consequences, comes the decision that LGIM is divesting from Glencore, L&G said in a statement on Wednesday.

The divestment from Glencore follows extensive engagement with the company since the first Climate Impact Pledge launched in 2016.

Last year, LGIM filed a shareholder resolution at Glencore, requesting that the company disclose how its projected thermal coal production aligns with the Paris Agreement and efforts to limit the global temperature increase to 1.5 degrees Celsius.  

“LGIM remains concerned that Glencore has not disclosed plans for thermal coal production that are aligned with a net zero pathway,” the investment company said today.  

LGIM holds a 0.44% stake in Glencore, which is currently worth about $325 million, according to LSEG data cited by Reuters.

Glencore’s current targets and ambition are to achieve net zero emissions by 2050, subject to a supportive policy environment.

Despite the ambition, Glencore has been called out by campaigners for its coal output and trade and coking coal assets.

In 2020, Norway’s $1.667 trillion sovereign wealth fund, the world’s largest, decided to exclude Glencore from its portfolio due to its coal involvement.

Amid growing calls for divestment from coal in recent years, pension and investment funds dropping coal companies from their portfolios will not make a difference for the world’s efforts to get to net zero, the chief investment officer of a large Australian pension fund said this week.

“We don’t see it as a victory, us holding a net zero portfolio while the world goes to hell in the hand basket, which is its current trajectory,” Michael Wyrsch, Chief Investment Officer at Australia’s Vision Super Pty, told Bloomberg in an interview on Tuesday.  

By Tsvetana Paraskova for Oilprice.com

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