Glencore, the Hunter Valley's biggest coal miner, is in trouble. A growing proportion of global investors refuses to buy shares in companies with thermal coal interests, or lend them money. Analysts say Glencore's share price would be significantly higher if it didn't operate thermal coal mines. Yet, on the back of Russia's invasion of Ukraine, record prices for thermal coal are delivering windfall profits to Glencore. Glencore has a dilemma: coal, or no coal.
The problem has been brewing for ages. Scientists have been warning for decades of climate change impacts from burning coal to generate electricity. The ESG investment movement - signifying concern for environment, society and governance issues - has been growing. ESG principles are now widespread in the business community. Firms know that commitment to ESG principles is demanded by employees, shareholders, host communities and the governments that regulate business operations. Without genuine commitment a firm loses its social licence to operate.
