Funds worth US$4 trillion are calling on Anglo American, Glencore and Rio Tinto to assess their exposure to climate risk
By Megan Darby
Anglo American, Glencore and Rio Tinto are facing pressure to phase coal out of their portfolios.
Investors worth US$4 trillion are planning to co-file shareholder resolutions later this month, calling on the mining giants to reveal their exposure to climate risk.
The Church of England, UK local authority pension funds and Aviva are among those backing greater transparency over how firms are preparing for global decarbonisation.
Helen Wildsmith, ethical investment specialist and founder of the ‘Aiming for A’ coalition, said: “These resolutions are a vital opportunity for shareholders to signal their support for the development of low carbon transition plans.”
At least two thirds of proven coal, oil and gas reserves cannot be burned if global warming is to be held to 2C, analysts estimate.
In Paris on Saturday, 195 countries agreed to hold temperature rise “well below 2C” and aim for a more stringent 1.5C limit. That goal implies rapid reductions in polluting fuel use.
With “unmistakable policy tightening” and technological progress in clean energy, Wildsmith said it “has never been more crucial” for carbon-intensive businesses to respond.
The resolutions urge miners to support clean energy research and development, green their own operations and – most significantly – maintain “a portfolio of assets resilient to future energy scenarios”.
Earlier this year, 98% of shareholders in Shell and BP backed similar proposals. Part of a wave of investor advocacy, they force fossil fuel majors to consider the threat greenhouse gas emissions curbs pose to their business models.
Edward Mason, head of responsible investment at the Church Commissioners for England, who are leading the engagement with Glencore, urged more funds to join.
He said: “The BP and Shell resolutions have helped change the way the European oil and gas companies integrate climate change into their business strategies. We are now keen to see the same from the major mining companies.”
It comes as coal prices are in the doldrums on slower than expected demand growth from China.
Peabody, the world’s largest private pure-play coal company, has been haemorrhaging value. Its shares tumbled 12.6% on Monday, the first day of market opening after the Paris Agreement.
Some major investors are ditching multi-billion dollar coal holdings on climate grounds, including Norway’s sovereign wealth fund and California’s two largest pension funds.
Anglo American wholly owns seven thermal coal mines in South Africa, according to its website. Glencore has interests in more than 30 coal mines worldwide, while Rio Tinto produces coal from five mines in Australia. All three firms also trade in other commodities, including metals and precious stones.