Glencore PLC will cap its coal production and take other steps to align itself with the Paris Agreement on climate change, in response to investor pressure, the global natural-resource producer said Wednesday.
"To meet the growing needs of a lower carbon economy, Glencore aims to prioritize its capital investment to grow production of commodities essential to the energy and mobility transition and to limit its coal production capacity broadly to current levels," Glencore said in a statement.
"To deliver a strong investment case to our shareholders, we must invest in assets that will be resilient to regulatory, physical and operational risks related to climate change," the statement added.
The move came after engagement with investor signatories of the Climate Action 100 Plus initiative, the company said. Climate Action 100 Plus represents more than 300 investors with a collective $32 trillion in assets under management who are engaging companies on improving governance, curbing emissions and strengthening climate-related financial disclosures. Engagement with Glencore was led by The Church Commissioners for England, with active participation from Investec Asset Management and Kempen, according to a Climate Action 100 Plus statement.
"Glencore's new commitments to its investors are a vital step forward in the path to align strategy with the goals of Climate Action100 Plus," said Anne Simpson, chairwoman of the group's global steering committee and director of board governance and strategy for the $354.7 billion California Public Employees' Retirement System, Sacramento, in the same statement.
Glencore also pledged to disclose its longer-term projections for emission reductions, including mitigation efforts, beginning in 2020.
In May 2016, shareholders of the Baar, Switzerland-based Glencore overwhelmingly approved a shareholder resolution co-sponsored by CalPERS calling for the company to report on environmental risks and opportunities associated with climate change.