Glencore urged to appoint climate specialist director
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The news: The Australasian Centre for Corporate Responsibility (ACCR) is urging Glencore to appoint at least one director with climate reporting and energy transition expertise to improve governance outcomes and perceptions.
The context: The recommendation was made in a report prepared by OpenEngagement, on behalf of the ACCR, that examined the composition of skills, experience, background and competencies of Glencore’s directors relating to climate, climate risk and the energy transition.
It said the appointment of a director with this expertise should be prioritised as “there are few climate experts, and climate reporting matters will only become more complex”.
The report said these skills should be regarded with the same seriousness as “having a director with verifiable financial expertise to chair an audit committee”.
The report compared how the Glencore board compared to the boards of Rio Tinto, BHP, Anglo American, Vale SA, Teck Resources, Freeport-McMoRan, Fortescue and South32.
Glencore has been urged to chair its sustainability committee with a director with verified climate experience “as is the case across the comparator group”.
It is unclear whether Glencore committee chairs have verified expertise in this area, according to the report.
It found that Glencore and similar resources companies appear to have “well-developed matrices defining the skills and experience of directors” but on closer examination they are “often poorly defined, if defined at all”.
A lack of adequate climate and energy transition skills at the director level could lead to committees that don’t prioritise these issues as oversight topics “potentially jeopardising governance over company strategy, which could negatively affect a company’s performance”.
What they said: The ACCR report flagged that most of the evaluated companies have “room for improvement in aligning executive pay with their sustainability performance, as well as their climate and energy transition efforts”.
“Coupled with some companies utilising only short-term approaches to address these issues, there may be a perception that companies are not adequately prioritising how they manage emissions while operating in an emissions-intensive industry," it said.
The source: Australian Centre for Corporate Responsibility report
