Bluebell Capital Partners has told Glencore - which is the world's largest exporter of thermal coal - that it could realise more value for shareholders if it separated the business and simplify its asset base by taking coal out of its core business.
"Glencore is not an investible company for investors who place sustainability at the heart of their investment process," Bluebell reportedly said in a letter.
"A clear separation between carbonised and de-carbonised assets is needed to increase shareholder value and remove the 'coal discount', while simultaneously ensuring coal assets will be managed responsibly."
Newly-appointed Glencore CEO Gary Nagle said in an investment update that the company was engaged in dialogue with investor group Climate Action 100+, which was established in 2017 as a five-year initiative to support the 167 highest-emitting listed companies in the world to align with the goals of the Paris Agreement.
"We consider the advice and insights of CA100+ in developing our climate strategy," he said.
"In 2021, CA100+ undertook Glencore's first assessment against the benchmark and acknowledged the progress we have made in achieving positive scores for our net-zero commitment and targets."
Nagle said as the benchmark continued to evolve, Glencore would maintain its engagement activities with both the CA100+ and other investor bodies such as the Institutional Investors Group on Climate Change.
"We recognise there is significant movement underway to strengthen and standardise accounting of climate related risks and opportunities, including efforts by the IFRS [International Financial Reporting Standards] Foundation," he said.
"We also welcome the evolving scrutiny that a number of organisations are now providing on how corporates report and communicate on the impact of climate change on business resilience, as well as setting and progressing emission reduction targets.
"In addition to CA100+, many of our shareholders have expressed the importance that they attach to climate change and their expectation for Glencore to align its business strategy with the goals of the Paris Agreement.
"At our 2021 AGM, we provided our shareholders with their first advisory vote on our three-yearly climate action transition plan and 94.4% of our shareholders voted in favour of this plan."
Nagle said going forward, shareholders would have an advisory vote on the three-yearly climate action transition plan and its intervening progress reports at each AGM.
"As the named executive for driving strategy relating to climate within our board, relevant performance indicators have been added to my remuneration package," he said.
"Of the scorecard that will be used for setting my annual variable compensation, 15% is reserved for indicators that chart our progress towards our short- and medium-term absolute emission reduction targets."
Nagle said Glencore welcomed the Glasgow Climate Pact that was agreed as a result of the COP26 proceedings earlier this year.
"The pact signals a continued ambition to keep the average rise in global temperatures to below 1.5C," he said.
"The commitment to phase down the use of fossil fuels is consistent with our strategy of responsibly depleting our coal portfolio over time, as we prioritise investment in metals needed for the transition.
"During 2021 we progressed the identification of carbon abatement opportunities across the portfolio and significantly expanded our marginal abatement cost curve.
"We further assessed the impact of carbon prices on the industry cost structure across each of our major commodity businesses and incorporated the results into our resilience analysis.
"We are committed to reducing our total emissions [Scope 1, 2 and 3] by 15% by 2026 and 50% by 2035, both on 2019 levels.
"Post 2035, our ambition is to achieve net zero total emissions by 2050, with a supportive policy environment."
