Three more reasons why UBS should stop doing business with Glencore
At least three other financial institutions have excluded Swiss firm because of human rights impacts of Colombian coal mine
Two months ago I wrote an article on Substack highlighting how a delegation of Colombian activists had met with the giant Swiss bank UBS in Switzerland to talk about the multinational company Glencore and the devastating social and environmental impacts that its Cerrejón mine in northern Colombia is alleged to have had on indigenous Wayúu and Afro-Colombian communities. The general thrust: UBS can’t continue to claim it respects indigenous people’s rights, as it does, if at the same time it is one of Glencore’s biggest financial backers, as it is.
Towards the end of that article I noted that, according to the Financial Exclusions Tracker (FET), more than 30 financial institutions have excluded Glencore - some on human rights grounds. But whose human rights exactly, and might any of those institutions have excluded the company because of Cerrejón in particular? Knowing that could be helpful for the Wayúu, Afro-Colombians and activists concerned about the mine, and could be used to further pressure UBS to divest from the company.
Of the nine financial institutions which have cut ties with Glencore because of human rights, according to FET, I was able to contact eight and obtained replies from six. Two of those six - KPA Pension and Folksam, both part of Sweden’s Folksam Group - told me they had initially excluded Glencore because of “their operations in the occupied Western Sahara but since then other human rights issues have also been discovered”, although neither would provide further details. Another of the six, Denmark’s Lægernes Pensionskasse, said that actually Glencore was only now excluded because of its general coal operations, but that it had been excluded for human rights grounds because of “the (previous) violation of norms/human rights issue [originating] from a coal mine located in Colombia”, which a spokesperson subsequently confirmed was Cerrejón.
And the remaining three? All Cerrejón.
“I can confirm [we have] excluded Glencore from [our] investments,” a spokesperson from the Netherlands’s CZ Groep tells me. “Our main reasons: exceeding the UNGP [United Nations Guiding Principles on Business and Human Rights], exceeding the UNGC [United Nations Global Compact], and coal mining (5% turnover threshold). Both the exceedance of the UNGP and UNGC are related to Glencore’s Cerrejon coal mine in Colombia. There is persistent criticism from the indigenous population (the Wayuu) about pollution, expropriation and water stress, which results in food insecurity and malnutrition among the local population.”
For PensionDanmark it is similar: Cerrejón only - and no mention or even a hint of any of Glencore’s other mines or operations around the world.
“PensionDanmark excluded Glencore from our investment universe in 2018 due to the questionable operation of the Cerrejon coal mine in Colombia,” says Head of ESG and Sustainability Jan Kæraa Rasmussen. “The mine was a major nuisance to the local indigenous population, the Wayuu people, who experienced pollution, noise, and health issues. Through dialogue with Glencore and the other then-owners of Cerrejon, PensionDanmark tried to get the companies to take responsibility for ensuring that the local people's habitats and the surrounding nature and environment were respected. But due to a sufficient lack of progress, we chose to exclude the companies behind the mine.”
“Since then,” Rasmussen continues, “Glencore has acquired full ownership of the Cerrejon mine, and since PensionDanmark has also decided to exclude all companies that generates more than 5% of their revenue from the production of thermal coal, Glencore, as one of the world's largest producers, remains excluded from [our] investment universe.”
For the UK-based Cardano it is similar too: only Cerrejón was specifically mentioned as the reason for exclusion on human rights grounds, although arguably other projects were implied.
“The main reason for exclusion has been the overall performance of the company,” a Cardano spokesperson tells me. “We engaged with the company from 2016 to 2021, and the engagement focused mostly on its climate transition strategy. In May 2020 the company was classified as “At-Risk” of failing to transition under our sustainable investment framework. In January 2022, Glencore took full ownership of the Cerrejon coal mine which has been a subject of numerous environmental and social concerns, including direct adverse impact on local indigenous communities, furthering concerns.”
“The number of controversies show that Glencore, despite having quite decent policies (e.g. around water governance), is persistently unable to mitigate the social and environmental impacts of its operations,” the Cardano spokesperson continues. “Due to the nature and frequency of events and the absence of a satisfactory solution from Glencore, we downgraded the classification from “At Risk” to “In Violation of International Standards” in Q3 2022.”
This should be instructive for UBS. If the bank employees who met the Colombian delegation last year weren’t sufficiently moved or convinced by what they heard to exclude Glencore, then perhaps these decisions by other European financial institutions can move the dial instead.