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Legal & General has stepped up its wake-up agenda under new boss Antonio Simoes by dumping Glencore shares over its coal production plans.
The insurance giant’s asset management division said it was adding the mining and commodities trading giant to its “divestment list.”
Glencore failed to meet L&G’s annual climate “engagement” assessment, which aims to ensure the companies it invests in “play their part” in achieving global climate change goals.
Warrior awake: L&G’s new boss Antonio Simoes (pictured) looks set to continue the company’s ethical agenda set out under previous boss Sir Nigel Wilson.
The decisions cover a portion of General Legal and Investment Management (LGIM) funds, including those flagged under the environmental, social and governance (ESG) label, with a total value of around £176 billion.
LGIM said the divestment followed years of “extensive engagement” with Glencore, in which it holds a 0.44 per cent stake worth about £250m.
He added: “We remain concerned that Glencore will not meet our red line by asking mining companies to disclose whether they plan to increase thermal coal capacity.”
Thermal coal – the type that is burned to produce electricity – is particularly rejected by ESG investors, as there are increasingly more alternative energy sources, such as gas, nuclear or wind.
Glencore, which already plans to close its thermal coal mines by the mid-2040s and close at least 12 by 2035, declined to comment on the divestment.
Earlier this month, chief executive Simoes, who took over in January, announced a restructuring of 188-year-old L&G that will allow it to sell “non-strategic” investments – such as homebuilder Cala Homes – but retain its “Purpose” driven investing, including owning a heat pump business.
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