Glencore agrees to cap coal production

Mining and resource company Glencore is making a conversion to enabling a low carbon economy, saying that “this transition is a key part of the global response to the increasing risks posed by climate change.”

The company first addressed climate change in 2017, when it announced its first target of reducing our greenhouse gas emissions intensity by 5 per cent by 2020 compared to a 2016 baseline, but following engagement with investor signatories of the Climate Action 100+ initiative, it is now taking further steps on the transition to a low-carbon economy:

As the world’s top coal exporter, the group has faced investor pressure over fossil fuel and has vowed to cap its coal production at 150m tonnes per year.

Whilst falling a way behind becoming neutral, the announcement is none-the-less important given that the company is both so large a producer and has previously resisted any such moves. This points to the pressure that investors can yield and the advanced state of concerns that they have over climate change.

Engagement with the company was led by The Church Commissioners for England, with active participation from Investec Asset Management and Kempen, and Stephanie Pfeifer, a member of the global Climate Action 100+ Steering Committee and CEO, Institutional Investors Group on Climate Change commented: “ Glencore’s commitment to work within the Paris Agreement is a significant step forward for the company. As engagement moves to the next stage, we look forward to working with Glencore and the sector as a whole on reducing emissions across the value chain.”

In addition to this pledge, Glencore will actively report its progress and publish new long-term targets for reducing its greenhouse gas emissions. Furthermore, after criticism that it was supporting trade bodies that are at odds with its stated aims, Glencore will be reviewing its membership of trade associations that lobby for fossil fuels.

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