Glencore has been divested from Legal & General Investment Management’s (LGIM) ESG funds due to concerns over its lack of plans to achieve net zero emissions while continuing thermal coal production. LGIM, a subsidiary of Legal & General (L&G), made the decision after extensive engagement with Glencore since the first Climate Impact Pledge in 2016 and a shareholder resolution filed by LGIM last year requesting information on thermal coal production alignment with the Paris Agreement.
Glencore has not disclosed plans for thermal coal production in line with a net zero pathway, leading to LGIM’s decision to divest. The investment company currently holds a 0.44% stake in Glencore, valued at around $325 million. Despite Glencore’s aim to reach net zero emissions by 2050, concerns persist over its coal output and coking coal assets, leading to exclusion from some investment portfolios like Norway’s sovereign wealth fund.
However, Michael Wyrsch, Chief Investment Officer at Australia’s Vision Super Pty, expressed skepticism about the impact of divestment on global efforts to achieve net zero emissions. He emphasized the need for broader changes beyond individual investment decisions to address climate change effectively. This highlights the ongoing debate surrounding the role of divestment in achieving climate goals and underscores the need for continued engagement between investors and companies to drive meaningful change towards a more sustainable future.