Under pressure on numerous fronts, not least on environmental grounds thanks to heavy exposure to coal assets, commodities firm Glencore (GLEN) is only just recovering from 12-month lows at 280p.

In February Glencore announced it would cap coal production but in a sign of the increasing relevance of ESG (environmental, social and governance) issues analysts at investment bank Jefferies believe more radical action is required to address this issue, with pressure on thermal coal prices also hurting the company.

They argue Glencore should commit to paying out 100% of its cash flow from thermal coal, in recognition of the fact that ‘the multiple investors are willing to pay for thermal coal EBITDA (earnings before interest, tax, depreciation and amortisation) is likely to continue to decline as ESG becomes a more prominent theme’.

Although they concede that depressed coal prices mean this might not have a significant impact on capital returns they add that ‘a strategy of explicitly segregating coal cash flows to return to investors would change the perception of Glencore’s coal business and stabilise if not re-rate the Glencore (earnings) multiple’.

The company continues to face several other issues including its substantial borrowings, last reported at $14.7bn.

A US Department of Justice probe into alleged money laundering and a separate investigation by US regulators are expected to hang over the investment case for some time and the company has also been hit by a more onerous mining code in Democratic Republic of Congo.