9th April 2018
Rio Tinto’s response to a shareholder revolt over its support for coal lobby groups has been condemned by green groups, which are calling on shareholders to fight back by voting against the company’s accounts at its AGM on Wednesday.
Investors representing AUS$84bn filed two resolutions with the miner’s Australian arm in February, urging it to publish what it spends on membership to lobby groups that obstruct climate policy and push governments for coal subsidies to keep coal alive.
But Rio Tinto has positioned itself in direct opposition to several large European institutional investors, including the Church of England, insisting its existing climate commitments are enough and encouraging shareholders to vote against the resolutions.
ClientEarth climate lawyer Sophie Marjanac said: “Rio Tinto can’t dig its way out of this one. It may be pulling out of coal, but it can’t claim its hands are clean while funding lobbies that keep coal very much alive. This is outright climate hypocrisy and investors must demand action.
“You cannot say you are actively working to tackle climate change while pouring money into pressure groups that exist to keep the road open for high-carbon energy projects. It is disingenuous and a threat to the value of investors’ shares.”
The mining giant has also refused to let UK shareholders vote on the resolutions at the UK AGM, restricting votes to the Australian AGM.
This makes Rio Tinto far weaker on climate than rival BHP, which, after a similar shareholder intervention in 2017, released a report laying out ground rules for its continued membership to industry associations, and committed to withdraw from the World Coal Association.
ClientEarth, ShareAction and InfluenceMap have issued investor recommendations on how to react to Rio Tinto’s blocking of the resolution at the UK AGM on April 11, including voting against the company’s accounts and publicly grilling the board.
ShareAction senior campaigns officer Jeanne Martin said: “Rio Tinto is using the ‘Aiming for A’ resolution as a smokescreen to hide its failure to take further action on climate-related issues. But a closer look at what they are actually doing in response to the resolution reveals that smoke and mirrors is all there really is. Investors must ask Rio Tinto to come clean and cut ties with trade associations whose positions on climate and energy policy are seriously misaligned with theirs.”
Resolutions 19 and 20 were filed by over 100 Australian retail shareholders as well as the Church of England Pensions Board, Australia’s Local Government Super and the Seventh National Swedish Pension Fund (AP7).
Resolution 20 calls on Rio Tinto’s board to:
In the briefing, ClientEarth, ShareAction and InfluenceMap state the following:
We recommend that shareholders in Rio Tinto plc should:
We recommend that shareholders in Rio Tinto Limited should: