Rio Tinto Ltd said on Friday that it would endorse resolutions to set targets for cutting carbon emissions and take tougher measures against lobby groups that do not follow its climate change goals ahead of shareholder meetings next month.
Mining companies around the world are under growing shareholder pressure to reduce their carbon footprint and take stringent climate actions to cut emissions, as calls for a shift towards cleaner forms of energy accelerate.
“As Rio Tinto’s current approach is substantially consistent with both of the proposed resolutions, the Rio Tinto Board is recommending that shareholders vote in favour of these resolutions,” Rio said in a statement to the stock exchange.
Rio should disclose short, medium and long-term targets for direct and indirect greenhouse gas emissions and chalk out its performance against those targets, Market Forces proposed, pushing for stronger cuts than Rio has set out.
It should also undertake an annual review of industry lobbyists to identify inconsistencies with the 2015 Paris Agreement and suspend membership of those out of line with the objectives, according to a resolution by the Australasian Centre for Corporate Responsibility (ACCR).
While both groups are small shareholders in their own right, at 0.02% and 0.01% respectively, they come with the backing of larger investors.
“This is important recognition from Rio Tinto that its climate ambition has been inadequate so far,” Market Forces Executive Director Julien Vincent said in a statement.
Vincent said that Rio Tinto still needed to better manage its scope 3 emissions, or those of its steel making customers, which Market Forces estimates account for 94% of Rio’s total carbon footprint, similar to Australia’s total emissions.
“Rio Tinto’s next climate risk report needs to clarify its risk appetite to this massive carbon liability, and tell shareholders how much it is prepared to be exposed to scope 3 emissions in future,” he said.
(By Melanie Burton; Editing by Stephen Coates)