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Ethical Investment Problems For Majors

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lse:glen

#1

Norway’s $1Trillion sovereign wealth fund could be forced to unload shares after the government proposed tightening restrictions on coal investments, the Financial Times reports.

Under the proposals, which still need to be approved by Norway’s parliament, the fund would be forced to sell out of any company that mines more than 20M tonnes or uses 10K MW of coal power production, which would include BHP and Glencore; the fund is a top 10 shareholder in both miners.

The fund already is banned from investing in companies that derive more than 30% of their revenues or activity from coal but can stay invested if the business has plans to bring it under the threshold. [Looks like freezing coal production at last year’s level isn’t going to be enough for GLEN, but shows just how important the move perhaps was as ‘ethical investment’ from these big funds is becoming more and more fashionable - Eadwig]


#2

AMSTERDAM (Reuters) - Environmentalist and human rights groups said on Friday they had started a lawsuit against Royal Dutch Shell in the Netherlands to force the energy firm to cut its reliance on fossil fuels.

The groups, including Greenpeace and Friends of the Earth Netherlands, handed over a court summons to Shell at its headquarters in The Hague, demanding it stop extracting oil and gas and cut its greenhouse gas emissions to zero by 2050. [Zero? Do its employees have to stop breathing? - Eadwig]

“Shell spends billions on oil and gas exploration each year, with current plans to invest just 5 percent of its budget in sustainable energy and 95 percent in exploiting fossil fuels,” the groups said.

They said Shell’s plans were “incompatible with the goal to limit global temperature rise to 1.5 degrees Celsius of warming” under the goals set out in the Paris Agreement to combat climate change.

Shell on Friday said the case should not be brought to court as it supports the goals of the 2015 pact and has promised to cut its contribution to global greenhouse gas emissions in half by 2050.

“We also feel action against climate change is needed right now”, the company said in a statement.

“We have invested billions of dollars in a range of CO2-light technologies, such as biofuels, hydrogen and wind energy and we want to continue to grow these activities.”

Activists say this commitment does not go far enough to ensure climate goals can be reached on a global scale.

“With their current strategy, they will keep the world dependent on fossil fuels in the next 40 years,” Greenpeace campaigner Eefje de Kroon said.

The groups said more than 17,000 Dutch citizens signed up to support their case against Shell.

The company has about six weeks to reply to the court summons, after which a judge will decide on further proceedings.


#3

In a closed meeting last week to discuss ensuring sources of ‘strategic metals’ for USA from Australia.

It was stated that ‘Tesla will continue to focus more on nickel, part of a plan by Chief Executive Elon Musk to use less cobalt in battery cathodes. Cobalt is primarily mined in the Democratic Republic of the Congo, and some extraction techniques - especially those using child labor - have made its use deeply unpopular across the battery industry, especially with Musk.’

Glencore are the largest miner of cobalt, mainly in the Congo, although I have never heard of allegations of child labour before, and may not be associated. Another example of ethics impacting on industry, potentially, though.

Glencore are expecting Cobalt to start to move the needle for them a little bit towards the end of 2019 and going into 2020. They also have plans to ramp up Nickel production, so this works both ways for them with Nickel already being one of their top 6 revenue streams whereas Cobalt has still to make it out of the ‘other’ column.

GLEN major revenue streams Commodity trading (which they call Marketing), Copper, Coal, Nickel, Lead and Zinc.


#4

A move to 100% Electric Vehicles around the globe will have this predicted impact on current levels of metals production. PLEASE don’t glance at this and think there is an opportunity in Lithium! Seek out my posts over the last few years why chasing Lithium is not a good idea.

Most interesting thing from my point of view is the relatively small increase in copper demand, despite all the additional wiring required in E.V.s as well as additional infrastructure and power generation…


#5

Norway’s $1T sovereign wealth fund may have to sell its $1B stake in commodities giant Glencore under a center-right government plan expected to be adopted today by Norway’s parliament.

The fund would also have to sell its 2.16% holding in miner Anglo American, worth $620M.

The proposed tighter ethical investing rules would prohibit investments in companies that derive more than 30% of their revenue from coal, mine more than 20M tons of coal annually or generate more than 10 GW of power with coal.


#6

ConocoPhillips, Hess cut from Norway wealth fund

Norway’s $1T sovereign wealth fund will no longer be able to invest in ConocoPhillips and Hess after a list used to decide which energy firms must be excluded was updated to include the two companies.

Norway’s parliament yesterday (jun 13) adopted a plan to drop all dedicated oil and gas explorers and producers, as defined by FTSE Russell, from the fund’s benchmark index; the fund can still invest in integrated companies with refineries and other downstream activities, such as Royal Dutch Shell and Exxon Mobil

At year-end 2018, the fund held a 1% stake in COP worth $714M as well as $64M worth of the company’s corporate bonds, and held 0.85% of Hess worth $102M plus $40M of the company’s bonds.