Rio Tinto: 18% vote against coal lobby
A shareholder resolution focusing on Rio Tinto’s relationship with lobby groups drew over 18% of the vote at the Annual General Meeting of Rio Tinto Limited (ASX:RIO) in Melbourne today.
The resolution was co-filed by the Australasian Centre for Corporate Responsibility (ACCR), Local Government Super, the Church of England Pensions Board and The Seventh Swedish National Pension Fund (AP7).
This is the largest vote for a shareholder resolution related to climate change, without board support, in Australian corporate history.
Brynn O’Brien, Executive Director of Australasian Centre for Corporate Responsibility (ACCR) 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.
“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.”
Bill Hartnett, Head of Sustainability at Local Government Super (LGS) said:
“This strong vote shows the power of being an active owner and sending a strong, clear message to companies on long term ESG issues which in turn are integral to protecting shareholder value.
“The resolution was well researched, well targeted and has gained significant traction globally. We welcome the sentiments expressed by the Rio Tinto board at the AGM. We look forward to constructively engaging with them on an ongoing basis so that all their business activities are aligned to their Paris commitments.”
Adam Matthews, Head of engagement for the Church of England Pensions Board said: “This is a highly significant vote on an important issue of Rio’s support of trade associations and their lobbying on climate change. As the vote shows this was a very reasonable shareholder resolution that has gathered the support of many shareholders. It justified a better response from Rio’s Board and I would encourage the Chairman to now take the opportunity to commit to undertake the called for review and publish their funding of trade associations. We look forward to continuing to engage with Rio and working with the funds that have indicated their support for the resolution.”
Sophie Marjanac, Lawyer, ClientEarth said: “This vote is a watershed moment in Australian corporate governance. 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 Rio Tinto 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.”
Bill McKibben founder of 350.org said: “It’s obvious that the Australian Government isn’t prepared to stand up to big coal to save the climate. The most powerful way to stop the fossil fuel industry is to starve it of investment. Companies can expect to see more of this sort of shareholder action, and Rio Tinto would do well to heed this call."