Resolution round-up: CA100+ leads steer clear of Glencore thermal coal proposal

LGIM and HSBC AM among co-filers at Swiss miner; plus, latest on shareholder proposals in the US, including Uyghur phaseout proposal withdrawn at Apple following commitment.

Big investors including Legal & General Investment Management (LGIM) and HSBC Asset Management have co-filed a climate proposal at Glencore, pushing the Swiss miner to disclose how its thermal coal production aligns with the Paris climate agreement.  

The shareholder resolution, co-ordinated by seasoned filers the Australasian Centre for Corporate Responsibility (ACCR) and UK-based responsible investment NGO ShareAction, is being supported by a global coalition of investor heavyweights, representing $2.2 trillion.  

But the lead engagers on Glencore for Climate Action 100+, Royal London Asset Management and Northern Trust, are not among the co-filers of the proposal.  

A spokesperson for Royal London declined to comment on the proposal but a spokesperson for Northern Trust told RI that it has been “engaging with Glencore both individually and collectively with other investors, co-leading engagements with the company as part of the CA100+.” 

They added that the big investment firm voted against Glencore’s climate progress report in April, and added that the company “needs to accelerate the reduction in coal production over the next decade to meet the goals of the Paris Agreement.” 

CA100+ is the multi-trillion-dollar investment engagement initiative targeting the world’s largest emitters. LGIM, HSBC AM and fellow co-filers Ethos Foundation – the body representing large Swiss pension funds and foundations – and Australian super fund Vision Super are all members of the initiative. 

Naomi Hogan, strategic projects lead at ACCR, told Responsible Investor that the Australian NGO had been in discussion with a “broad range of Glencore stakeholders” throughout the process and that “CA100+ leads are aware of the resolution”. 

“Shareholder resolutions are generally used sparingly by large investors,” she added. “This co-ordinated action by institutional investors from across the globe indicates a deep level of concern from within the investor community that Glencore is not adequately demonstrating the climate commitments it’s made to the market.”  

Specifically, the proposal asks Glencore to disclose how its projected thermal coal production and thermal coal capital expenditure aligns with the Paris Agreement’s goals and the International Energy Agency (IEA) Net Zero Emissions pathway. 

This information should be presented as part of the company’s transition plan and voted on by shareholders at its 2024 annual general meeting. 

Glencore’s climate plan was the worst-supported in Europe last year, with 76.3 percent of shareholders voting in favour. By comparison, according to US proxy solicitation firm Georgeson, the average support for 2022 corporate transition plans in Europe was around 91 percent.  

According to Glencore’s 2021 annual report, coal accounted for around 90 percent of the firm’s total disclosed emissions (Scope 1, 2 and 3). Ninety percent of its total coal production is thermal coal, which is used to produce heat or steam for electricity production.  

Last month, Glencore announced it had cancelled a A$2 billion ($1.3 billion; €1.3 billion) coal mine development in Australia, citing among other factors its net-zero 2050 goal as the reason for stopping the Valeria project. 

The proposal at Glencore is the second time HSBC AM has collaborated with the ACCR on a coal-focused climate proposal.

Last year, the investor co-filed with ACCR at J-Power, calling on the Japanese utility to amend its articles to formulate and disclose a Paris Agreement-aligned business plan with targets, as well as disclosing how future capital expenditure will align with that strategy and how remuneration policies facilitate the achievement of emissions reduction goals. 

None of the proposals achieved the two-thirds majority needed. The closest was the 26 percent support for the Paris-aligned strategy and emissions reduction targets. The other two saw support of around 20 percent.  

Early last year, LGIM revealed that it would start to file shareholder proposals at companies failing to put “suitably ambitious and credible transition plans to a shareholder vote” from 2023.  

Jeannette Andrews, senior global ESG manager, told RI that LGIM did not support Glencore’s Say on Climate vote last year and voted against the chair of the miner “for not quite meeting our expectations on their climate transition”.  

Her colleague Dror Elkayam, global ESG analyst in LGIM’s investment stewardship division, stressed the value of companies providing more insight into their transition strategies through mechanisms such as Say on Climate votes. That allows investors to understand better where the “gaps” are and collaborate with other shareholders and stakeholders to engage on them, he added 

Shifting to the US  

A proposal at Apple, calling on the tech giant to develop an Uyghur region phaseout plan has been withdrawn, following a commitment from the company to provide additional disclosure. 

The resolution, which was filed by campaign group SumOfUs, urged Apple to develop and publish a “phaseout transition plan” to cease any supply chain links with China’s Xinjiang province “in light of human rights abuses in the region and the reputation and operation impacts posed” to the company.  

Apple had sought to exclude the proposal via the SEC’s “no action” mechanism, the process by which companies can appeal to the financial watchdog for its blessing to block an item from being taken to the vote at its annual meeting.   

But Christina O’Connell, senior campaign manager, shareholders and investments at SumOfUs, told RI that the nonprofit was able to engage in “a series of candid and positive discussions”.

“Apple has agreed to include additional disclosures in its upcoming reports regarding its supplier responsibility programme in 2023,” she said. In response, SumOfUs withdrew its resolution.  

O’Connell added that SumOfUs is “very pleased with developments in response to our resolution addressing the possible use of forced Uyghur labour by Apple”.  

American Express seeks to block NYC’s gun safety proposal 

US payment services giant American Express is seeking to block a shareholder proposal filed by the Office of the New York City Comptroller calling for disclosure over its decision-making around introducing a dedicated merchant category code (MCC) for standalone gun and ammunition stores, which the investor believes would help address gun crime. 

The Comptroller’s office, which oversees the city’s five pension pots, cited reports that American Express had pushed back against an application to global standards body ISO to introduce such a dedicated code. American Express was part of an internal committee within ISO, the proposal stated.

ISO approved the creation of a new MCC for gun retailers in September, a month after the proposal was filed.

As a result, American Express argued in its “no action” request that the proposal is excludable on the ordinary business and substantial implementation rule.

“While the company has not issued a public report concerning management’s decision-making with respect to applications to the ISO, it is clear that it has satisfied the proposal’s essential objective of adopting a new MCC specific to gun and ammunition stores,” the company said.

Veganism on the ballot in 2023? 

Proposals filed at Molina Healthcare, HCA Healthcare and Elevance Health are calling on the US healthcare firms to require their hospitals to provide “plant-based food options to patients at every meal”. 

The new proposal has been filed by Beyond Investing, the US-based investment firm launched in 2017 that was behind the US Vegan Climate Index. 

All three firms are seeking to omit the resolution, with Molina and Elevance arguing that they do not have the power or authority to implement the ask as formulated in the proposal (Rule 14a-8(i)(6)). HCA argued that the proposal touches on matters of ordinary business and that it has already substantially implemented it.