Multinational mining giant Glencore is bowing to investor pressure and putting a cap on the amount of coal it extracts—but will still produce about 145 million tonnes of the climate-busting fuel per year.
The announcement “is the latest example of private business responding to public pressure to act on climate change even as so many governments globally—including, notably, the United States—fail to do so,” the Washington Post reports. “For the Switzerland-based company in particular, the announcement is a swift public shift for a firm once at the forefront of promoting coal.”
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“I’m not going to tell you it’s a coup,” said Ceres President and CEO Mindy Lubber, whose organization has been pushing companies to reduce their greenhouse gas emissions, “but it’s a good first start.”
Indeed, the announcement is more a business-as-usual commitment than a fundamental shift, at a time when the International Energy Agency is projecting flat global demand for coal. “With its pledge, Glencore is essentially promising to keep the status quo when it comes to coal mining,” the Post notes.
“This is a small step in the right direction but further commitments will likely be required over time,” Deutsche Bank wrote in an investor note. The Post cites analysts’ observation that Glencore “still gets to produce tens of millions of tons of coal per year from existing mines, while limiting costly investments in new mines and redirecting capital toward areas of growth.”
But it’s still being interpreted as a step in the right direction that more than 200 institutional investors began demanding in mid-2018, with pressure on fossil companies to align their business plans with the targets in the 2015 Paris Agreement. Colossal fossils BP and Royal Dutch Shell have made similar announcements in recent months.
“The reality of our climate system is that it imposes finite limits on emissions, yet too often fossil fuel investment dollars seem to operate on a different planet,” said Carbon Tracker Senior Analyst Andrew Grant. “Crucially, the Glencore and BP announcements begin to acknowledge the need to bridge the gap.”
