More than 36 per cent of Rio Tinto shareholders backed demands for the miner to commit to targets that would scale back emissions of its customers in line with the Paris Agreement during the company’s annual general meeting on 7 May, reported The Sydney Morning Herald.
Represented by Market Forces, a unit of advocacy group Friends of the Earth, the investors updated a resolution that was presented at the meeting. The shareholders wanted Rio Tinto to report annually on short-, medium- and long-term targets for its direct and indirect greenhouse gas (GHG) emissions, as well as those of its end customers – known as scope 1, 2 and 3 emissions – and performance against those targets, according to Reuters.
“Rio Tinto had set expectations that we would see Paris-aligned targets to reduce their operational emissions this year, but what they announced falls well short of anything that could be considered consistent with the Paris climate goals,” said Julien Vincent, executive director of Market Forces. “Rio Tinto is essentially telling its shareholders it is aware of a massive financial liability sitting on its books, but isn’t planning to manage that risk down.”
Rio Tinto’s direct and indirect emissions stood at 28.6 million tonnes in its 2018 climate report, just 5 per cent of a total – including scope 3 – which is almost as high as the total annual emissions of Australia, Market Forces said.
Mr Vincent said the resolution had gained six times more investor support at the meeting than the 6 per cent backing for the one filed last year, marking a "significant hardening of investor attitudes."
However, Rio Tinto Chairman Simon Thompson said the vote showed the majority of shareholders were still supportive of Rio Tinto's overall approach and understood that it was "not viable to set scope 3 emission reduction targets."
"We will continue to engage with our investors and other stakeholders on this topic," he added.
Rio Tinto recently announced plans to cut its carbon intensity by 30 per cent and its absolute emissions by 15 per cent by 2030. The miner said it would invest $1 billion over five years in climate change initiatives.
Peers BHP Group Ltd., Vale SA and coal giant Glencore PLC have agreed to cut exposure to scope 3 emissions, whereas Fortescue Metals Group Ltd. has said that policing emissions of its customers is not its job.