At Friday’s event Glencore pledged to reduce its greenhouse gas emissions, including “scope 3” created when customers burn raw materials, to net zero by 2050.
It plans to do this mainly by placing its coal business into managed decline in which reserves are not replaced as they run down.
By setting out a credible pathway to net zero, Mr Glasenberg believes Glencore will be able to hang on to a business it can milk for cash and not be penalised by investors.
Coal accounts for about 10 per cent of earnings before interest, tax, depreciation and amortisation, and 5 per cent of revenue, so it is not a huge part of its business.
The move has met a positive response. While Glencore’s commitments require careful consideration, they are “significant”, according to Adam Matthews, director of ethics and engagement at the Church of England Pensions Board and co-chair of the Transition Pathway Initiative.
Glencore needs to decide what it wants to be in the post-Ivan, ESG world,” said Paul Gait, a mining expert at Azvalor Asset Management. “My gut feeling is that coal will be separated eventually.”
— Anne-Sylvaine Chassany (@ChassNews) December 8, 2020