Investors in Rio Tinto Ltd have made it clear that they will not stand by and watch while the company funds lobby groups that block climate policy.
At the miner’s AGM in Melbourne this week, 18% of shareholders voted for a resolution that rejects the corporation’s funding of lobby groups like the Minerals Council of Australia, which fight to keep coal’s foothold in national and global energy markets.
ClientEarth climate lawyer Sophie Marjanac said: “This vote is a watershed moment in Australian corporate governance and it will have hit home with boards across the sector.
“Shareholders with a significant financial stake in Rio Tinto Ltd have said loud and clear that they understand and care about climate lobbying. They have demanded that the company address the risks that climate obstructionist organisations like the Minerals Council of Australia pose to their business.
“We expect more investors to take companies to task over this issue and drive them to start delivering on the Paris Agreement.”
Brynn O’Brien, Executive Director of Australasian Centre for Corporate Responsibility (ACCR), which co-filed the resolution, said: “Including abstentions, over 20% of Rio Tinto shareholders, representing nearly $4 billion in shareholder capital, have voted against management.
“This sends a strong, clear signal to Rio Tinto that investors are fed up with the toxic influence that lobby groups like the Minerals Council have had on sensible climate and energy policy. It is now apparent to the board and management of Rio Tinto that investors will no longer accept their capital being spent in this manner.
Taking a stronger line on climate change policy
When dual-listed Rio Tinto blocked UK investors from voting on the lobbying resolution at the London AGM, ClientEarth, ShareAction and InfluenceMap called for shareholders to vote against the company’s accounts in protest, producing a briefing to explain why and how. The Church of England and other significant investors lodged such protest votes at the London AGM last month.
Rio Tinto encouraged shareholders to vote against the resolution, insisting that it did not need to commit further on climate, having already signed onto a previous ‘Aiming for A’ resolution. This is not the case. The company may have moved out of coal, but its funding of lobbyist groups undermines its purported backing of the Paris Agreement goals.
O’Brien added: “The Chair said today that the company objected to formulating ‘red lines’ of accountability for industry associations. If a company does not have red lines, a company does not have a real position on climate change.”
Sophie is an Australian-qualified lawyer.