Sustainability Economics News’ Post

How destructive can shareholders' power be. #Glencore changes plans and keeps its #coal business, #fossilfuels' biggest carbon bomb. Despite 'Paris' 2015. Despite promises at #COP28 in Dubai to 'transition away' from fossil fuels. Despite catastrophic #climatechange. In May 2024, over 7,500 institutional investors still held bonds and shares in coal, oil, and gas companies amounting to $4,300,000,000,000, of which $1.2 trillion in coal. Since 2021, commercial banks channelled $470 billion to the coal industry. Some even increased their support for this sector. Check our financial research #InvestinginClimateChaos https://lnkd.in/ev-aXVgy and Stillbankingoncoal.org Profundo

Lead investors, Fidelity International’s Daniela Jaramillo, Head of Sustainable Investing – Australia, and ACSI’s Ed John, Executive Manager of Stewardship: “Steel is one of the hardest sectors to abate and will require meaningful coordination between the steel and iron ore sector. As the Australian co-lead investors for Rio Tinto for Climate Action 100+ we welcome the company’s commitment to boost disclosure of efforts to decarbonise the iron ore and steel sector. “We see these commitments as an important step to give long-term investors greater visibility of how Rio Tinto is future-proofing its business and where necessary investments are being made. This is why this has been one of the key priorities in our engagement with Rio in the last few years.” “Increased transparency is key to enable coordination between the iron ore and steel sectors, and will provide greater insight into the progress being made in decarbonising the whole sector. We look forward to continuing to see accelerated progress towards the reduction of their scope 3 emissions.” https://lnkd.in/dw8r-GFE Investor Group on Climate Change (IGCC) #climateaction100+

Glencore’s plan for Teck coal spin-off a risk for British Colombia taxpayers. Spinning the coal operations off into a separate stand-alone company could see remediation liabilities worth billions of offloaded to the new company. The liabilities would instead rest with a stand-alone company reliant on a product with declining demand – for both thermal and metallurgical coal – and with revenues that could dramatically dwindle in the coming years. British Columbia taxpayers could be left to pick up the bill if the new company is unable to pay due to declining demand for coal.  #coal #Canada #BritishColumbia #Glencore #energytransition #investing https://lnkd.in/ghM-ucRc

IEEFA's Energy Finance Analyst Andrew Gorringe's latest research finds there is strong merger & acquisition (#M&A) activity in Australia's #coal #mining industry, but with traditional coal financiers becoming increasingly wary of the sector, there has been an influx of new and higher-cost #debt markets supporting coalmining deals. 💲Coalmine debt is already highly priced, reflecting the higher #risks and introduction of #privatecredit risks, which raise #costs even further. 🚫 Australia's big 4 #banks have split policies on coalmine #investment exposures. These restrict investments in #thermal #coalmining but provide continued support for #metallurgical coal #financing. 🌫 Metallurgical coalmines, including those with some thermal coal, account for about 70% of Australian coalmines’ #methane #emissions (A potent greenhouse gas). Yet financing of metallurgical coal mines continues to grow. 📈Coalminers have paid down debt, and returned funds to shareholders, but are now saddled with a historically high #operating cost base 💠 While some coal miners are sitting on healthy balance sheets at the moment, as profit margins compress, they may need to reconsider their growth ambitions. 💠 For coal mine operators to remain profitable, coal #prices must remain higher than historical levels. 🔍The strength of coalminer's cashflows will be revealed in the upcoming reporting season. ➡ Read the full article below https://lnkd.in/esM8g9s9 IEEFA Asia Pacific #mining #coal #australia #exports #investment #commodity #economy

I recently spoke with Mining Journal's Paul Harris to discuss different types of carbon credits, the role of offsets to help miners reach climate ambitions, and the future of voluntary carbon markets.   The key takeaway? Despite reputational challenges for a small portion of offsets, high integrity credits will be essential for companies to reach net zero targets.    Two additional thoughts:    📍 To gauge market health, focus on where the action is happening. Direct projects investments dwarf the value of carbon credit purchases (see Abatable’s 2023 State of the Market Report calculating US$10bn of investments from 65 announced projects). We are seeing corporate VCM budgets expanding. This is strikingly like the uranium market’s fixation on the spot price which accounts for a tiny percentage of uranium transactions. 📍 Changing offsetting habits for miners: Carbon projects will be increasingly treated as financial assets so will likely move from local CSR budgets to the CFO’s office. Carbon project proximity to a local operation will become less important over time. We expect more focus on optimal and cost-effective sequestration opportunities, like Key Carbon's tropical mangrove plantations.   Read more here: Miners need to rethink carbon offset projects (https://lnkd.in/enu7vjqC)   #Sustainability #KeyCarbon #ClimateAction #CarbonCredits  

Market Forces has joined with more than 100 shareholders calling on investors to vote against Whitehaven Coal’s remuneration plan for its executives at the company’s annual general meeting (AGM) today. New Market Forces analysis finds Whitehaven is over-incentivising coal production growth compared to other coal miners, driving its executives to pursue risky, long life projects when the industry must be phased down due to mounting climate and economic risks. Whitehaven Coal is pursuing the largest coal expansion plans of any coal miner in Australia and these projects are not in shareholders’ best interests, according to Market Forces latest modelling. “Whitehaven Coal has its head stuck in the sand over the rapid transition to clean energy needed for a safe and secure economy, instead driving a misguided growth strategy through massive executive bonuses." – William van de Pol, Chief Executive Officer, Market Forces “Our modelling shows the value of Whitehaven’s planned growth projects would be decimated by even small policy and market shifts towards alignment with global climate goals.” As the transition to clean energy accelerates, coal growth projects are prone to risks including falling demand and prices, increasing emissions regulation, and decreasing access to finance. The new Market Forces analysis reveals that if all of Whitehaven’s coal projects were to proceed, production from its mines would increase by over 80 percent by the mid-2030s. Thermal coal output would grow by around 40 per cent, primarily from the Vickery and Winchester South projects. If all of Whitehaven’s coal expansion projects proceed, they would unleash around 3.6 billion tonnes of carbon emissions, which is 23 times the cumulative emissions reductions expected to be made under the Australian Government’s Safeguard Mechanism by 2030. The 2024 remuneration plan faces investor discontent at this year’s AGM as it uses nearly the same scorecard as last year, which received a first strike in 2023 with 41 per cent of shareholders voting against the company’s remuneration report. “At a time when coal must be wound back to avoid the worst social, environmental and economic impacts of climate change, Whitehaven is ramming ahead with dangerous plans to mine coal for decades." – Will van de Pol, Chief Executive Officer, Market Forces “Investors who understand the unacceptable gamble Whitehaven is making must bring the company into line with global climate goals, or publicly cut ties with this coal company that’s endangering our climate and shareholder value.” #climatechange #coal #energytransition #whitehavencoal Image credit: Dean Sewell, Oculi Greenpeace

"Constructive dialogue with CA100+, ACCR and others on the practical approaches we are taking to address Scope 3 is helpful in shaping our strategy and our reporting in this area" Alf Barrios, Rio Tinto. “The multi-pronged approach of strong investor engagement, backed by a credible shareholder escalation, underpinned by steel decarbonisation research has catalysed action and this important result. In particular, it highlights the importance of escalation as a necessary and logical component of effective stewardship. Rio’s announcement sets a new standard for iron ore producers globally and puts the company on the path to unlocking large emissions reductions and better ensuring long term value through the energy transition.” Naomi Hogan, ACCR. via Climate Action 100+

Australia’s biggest thermal coal producer, Glencore, has withdrawn a promise to keep annual coal production below 150 million tonnes, backpedalling from a climate pledge it made five years ago. What we have here is a clear trend, worldwide, to move backwards, both in the energy transition field and in adopting the ESG principles. In my opinion, this is fuelled by the current confusion on these subjects, due to the lack of clear signals from politicians, poor international cooperation, and geopolitical uncertainty. Some companies will try to benefit from this situation by prolonging their traditional profit sources. https://lnkd.in/d3-8EgRV

Check out our new investment report on Warrior Met Coal:

Join our session tomorrow at the OECD - OCDE minerals forum! 👇 and get in touch if you would like to connect at the forum to discuss opportunities to cooperate with CNV Internationaal on addressing labour rights in the minerals and metals supply chain in Indonesia, Peru, Bolivia, Colombia and South Africa #justtransition #OECDmineralsforum Myrthe Peek Maurice van Beers Elles van Ark