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Rio Tinto swings behind activist shareholder demands on climate

“We’re looking forward to the company improving its [direct] emissions reduction targets over the next year to actually match the trajectory required to meet the Paris climate goals and are glad to have the company on board with that mission,” Mr Vincent said.

In the second resolution, the ACCR called on Rio Tinto to immediately review its links to powerful fossil fuel lobby groups to determine whether their public positions were aligned with the Paris climate accord’s goals. It calls on Rio Tinto to suspend membership of groups deemed out of step.

“The board of Rio Tinto, already under significant pressure from shareholders, has finally acknowledged that its funding of Australia’s climate stalemate goes against its own long-term interests,” Mr Gocher said.

“Groups including the Minerals Council of Australia, the Queensland Resources Council and the Chamber of Minerals and Energy of Western Australia should see this as a clear warning: lobby in support of the Paris Agreement or they will lose one of their largest members.”

Rio Tinto supported the motion, telling investors it regularly reviewed its membership of industry associations yearly, but would “further enhance this review process in 2021”, he said.

“If we identify significant differences in climate-related policy and advocacy, we will as part of that process consider suspension of membership,” he said. “Our preference is to work within, and influence, industry associations to ensure that their policy positions and advocacy is consistent with the goals of the Paris agreement.”

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Since former Rio CEO Jean-Sebastien Jacques resigned amid the fallout from the blasting of ancient Aboriginal rock shelters last year, Mr Stausholm has laid out ambitions to lift the company’s environmental, social and governance performance, improve ties with traditional owners and accelerate its decarbonisation agenda.

On climate change in particular, Rio and other big emitters around the world are facing ever-growing pressure from activists and long-term institutional investors seeking to reduce their exposure to greenhouse gases on ethical and financial grounds.

Shareholder activist groups have become a feature of corporate Australia’s annual general meeting season in recent years. By encouraging enough shareholders to co-file strategic meeting resolutions, groups including the ACCR and Market Forces have managed to elevate social and environmental issues above the usual debates over executive pay, and their motions have been attracting growing levels of support.

Mr Vincent predicted the dual Rio resolutions could receive an extraordinary 95 per cent of investor support due to the boardroom’s support.

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