11 April 2019
Today Rio Tinto has announced that it has set the following expectations of its industry associations:
- Public commentary on energy policy will be shaped by a technology neutral approach. This means that no technology will be put forward over others.
- Commentary on decarbonisation and carbon pricing will be framed by the same technology neutrality principles.
- Recognise the valuable contribution that renewables make in reducing emissions, and not undermine the role they have in the energy portfolio.
- Support government’s emission reduction targets in line with achieving Paris Agreement goals.
Rio Tinto has also announced that it will hold its Australian industry associations to the following standards:
- Any advocacy on the use of coal in the long term will note that it will require advanced technology, and in the medium to long term must be consistent with Paris targets.
- Publicly argue against subsidies for coal and for the development of energy supply to be done in a technology neutral way, consistent with Paris targets.
This commitment by Rio Tinto follows months of private engagement with the Australasian Centre for Corporate Responsibility (ACCR).
Commenting on the announcement, Brynn O’Brien, Executive Director at the Australasian Centre for Corporate Responsibility (ACCR) said:
“We have been engaging with Rio Tinto for 18 months, and this announcement represents a noticeable deepening of their commitment to aligning their policy advocacy through industry associations with their commitment to the Paris Agreement’s goals. We commend Rio Tinto’s revised approach and the willingness they have shown to address lobby groups opposed to progressive action on climate change.
“There are serious rifts emerging between lobby groups which campaign vociferously against climate action, and their members. BHP has previously reviewed the advocacy of the MCA and found it inconsistent with the Paris Agreement. Glencore has recently committed to do the same. Shell has just announced it will exit the American Fuel & Petrochemical Manufacturers and has committed to tightening the screws on its other trade associations.
“Today, Rio Tinto has given its industry associations a strong warning: align their advocacy with Paris or Rio Tinto are prepared to exit. We expect that this will be looked upon very favourably by Rio Tinto’s major investors.
“Perhaps the most significant demand Rio Tinto makes of its Australian industry associations in this new set of commitments is to argue against public subsidies for coal fired power.
“This commitment would require many of its industry associations, including in particular the Business Council of Australia, the Minerals Council of Australia (MCA) and the Queensland Resources Council, to do an about-face on their previous advocacy, if they want to retain Rio Tinto as a member.
“The MCA has steadfastly supported the Coalition’s plans to underwrite new power generation. In fact in its November 2018 submission, the MCA specifically called for government support for new baseload power — namely coal, gas or hydro.
“MCA CEO Tania Constable recently described coal as ‘reliable, affordable and clean’. Just today, she called for the use of Kyoto carryover credits to discount Australia’s Paris Agreement targets, a cynical move which is akin to cheating. Rio Tinto’s interests are not served by this advocacy, as these fresh commitments from Rio demonstrate.
“It is imperative that all ASX companies understand the role their lobby groups have played in delaying and destroying effective climate policy. If we want any chance of limiting global warming to less than 2 degrees Celsius, we cannot tolerate these blockers having any further influence on policy and lawmaking. In the run up to this climate-critical federal election, ACCR will be watching the activities of lobby groups like a hawk.”