Shareholder revolt at Rio Tinto’s London AGM over “outright climate hypocrisy” 

Major UK institutional investors in Rio Tinto have today used their voting power in protest against the company’s affiliation with obstructive lobby groups on climate change. 

The Church of England Pensions Board and South Yorkshire Pension Fund have both voted down the miner’s company accounts at the AGM of its London subsidiary. This is on account of Rio’s stated policy on combatting climate change and its membership of trade bodies that actively campaign against this goal.  

The Church of England Pensions Board, along with ACCR, Local Government Super of Australia and AP7 of Sweden, filed two resolutions with the miner’s Australian arm in February, urging it to publish what it spends on membership to lobby groups that obstruct climate policy and push governments for coal subsidies to keep coal alive.  

However, the mining giant blocked shareholders in the UK from voting on this resolution, a move condemned by NGOs on Monday. ShareAction, ClientEarth and InfluenceMap issued, in response, recommendations to shareholders to vote against approval of the company’s 2017 accounts.  

Importantly, the Board’s response to resolution 20, which seeks greater transparency and active management of climate-related industry association memberships, relies heavily on Rio Tinto’s stated support of the 2016 ‘Aiming for A’ climate resolution. Yet analysis by climate experts reveals that the company has fallen short of fully complying with the requirements of the 2016 resolution. 

At the AGM today, Adam Matthews, Head of Engagement for the Church of England Pensions Board, said: “I would like to record our considerable disappointment at the decision by the Board not to grasp the opportunity to have supported the resolution and in particular not to allow a vote to have taken place on this issue at today’s AGM… As a result of your decision not to treat shareholders equally in relation to this resolution, the Church of England Pensions Board have today voted against Rio’s Report and Accounts.  We do not do this lightly and hope that the Board will reflect upon the missed opportunity in its response.” 

Jeanne Martin, senior campaigns officer at ShareAction, the responsible investment organisation, said: “We are delighted to see investors speaking up on poor corporate governance practices and irresponsible climate behaviour. For too long investors have blindly followed management advice and failed to exercise their stewardship responsibilities on financially important ESG issues at some of the world’s biggest companies. Yet they seem to be finally waking up to the challenge. With AGM season on our doorstep, let’s hope that this is just a taster of things to come.” 

ClientEarth climate lawyer Sophie Marjanac said: “Rio Tinto’s glaringly inadequate response to the issue of corporate climate lobbying has led to a shareholder revolt in London. The miner may be pulling out of coal, but it can’t claim its hands are clean while funding lobbies that keep coal very much alive. This is outright climate hypocrisy and today at the London AGM, investors demanded action.  

“You cannot say you are actively working to tackle climate change while pouring money into pressure groups that exist to keep the road open for high-carbon energy projects. It is disingenuous and a threat to the value of investors’ shares. The board must give this serious issue the attention it deserves.” 

Brynn O’Brien, Executive Director, Australasian Centre for Corporate Responsibilitysaid: “There was a far better path for Rio Tinto to take here. Rio should not only have honoured the spirit of their dual listing, but also acknowledged the reality of global anti-climate lobbying. It affects the Plc as well as the Ltd, and Plc shareholders have legitimate and well-founded concerns. 

“The steps the co-filing group have set out in our resolution are reasonable, and are designed to address those concerns. A company confident in their response to these issues would have no reason to avoid a conversation about them at their AGM.” 

Thomas O’Neill, Research Director, InfluenceMap, said: “The corrosive effect of trade associations on climate change policy must not be underestimated.  As long as companies such as Rio Tinto negate their responsibility for their indirect policy footprint, the default position of these institutions will be to undermine ambitious climate policy, particularly in North America, Europe, Australia and Japan.” 

The resolution requesting Rio Tinto’s disclosure of its climate lobbying spend will go to the vote at the firm’s Australian arm on 2 May. 

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Notes to editors: 

  • For more information, please contact Beau O’Sullivan on beau.osullivan@shareaction.org 
Beau O'SullivanShareholder revolt at Rio Tinto’s London AGM over “outright climate hypocrisy”