Dutch civil service scheme ABP has sold its stake in mining giant Glencore after engagement with the firm over human rights violations and other sustainability risks produced insufficient results.
The €523bn scheme took the decision to sell its €57m stake in Glencore after a reassessment of the fund’s ongoing engagement with the mining firm, which had been running since 2018.
The pension fund concluded significant sustainability risks remain, including corruption, conflicts with local communities, pollution and poor working conditions. “We do not expect Glencore to be able to sufficiently reduce these risks in the short term,” ABP said in a press release.
ABP noted it has specifically engaged with Switzerland-headquartered Glencore on child labour that is used in cobalt mines in Congo. Cobalt is an important input for mobile phones and batteries for electric cars.
The scheme said: “There is no evidence or suspicion that Glencore uses child labour itself, but in and around cobalt mines in Congo – including those of Glencore – small-scale cobalt mining is widespread. Child labour and unsafe working conditions in these mines are ubiquitous.”
ABP’s decision comes roughly half a year after Denmark’s Danica Pension took the same step. At the time, the DKK465bn (€62.5bn) Danske Bank pensions subsidiary cited similar reasons as ABP for the divestment, namely Glencore’s involvement in corruption and the use of child labour.
PMT buys Glencore
Interestingly, the €97bn scheme for the metals industry PMT included the stock in its passively managed equity portfolio as recently as May after Glencore’s MSCI ESG rating was upgraded to BBB, the minimum threshold for inclusion.
“We recognise the worries about working conditions in several locations where Glencore is active and keep monitoring the situation at the firm,” a spokesperson for PMT told IPE.