Investor Insight Investor Bulletin: Rio Tinto’s anti-climate advocacy prompts ACCR to disengage from policy collaboration

You may have seen news this week that ACCR has made the difficult yet necessary decision to disengage from year-long discussions with Rio Tinto on improving its climate-related lobbying. This follows revelations the company engaged in negative advocacy that undermines a public commitment Rio Tinto made to enhance its approach to climate advocacy.

The fact that Rio Tinto undertook lobbying of the Australian Government only came to light due to a Freedom of Information (FOI) request from Greenpeace Australia Pacific. It showed Rio Tinto was a signatory on a letter to the Prime Minister, written earlier this year, asking him to “personally intervene” on pending reforms to the Environmental Protection and Biodiversity Conservation Act 1999 (EPBC Act) - including by removing a proposed new object in the Act that would require climate change and greenhouse gas emissions be considered when assessing new projects.

ACCR considers Rio Tinto’s advocacy directly to the Prime Minister to be inconsistent with the company’s own commitments for enhanced climate advocacy and transparency. It is also a breach of the good faith agreement between ACCR and Rio Tinto, which had seen ACCR meeting with the company since July 2023, working towards supporting Rio Tinto’s public commitment to positive climate advocacy and decarbonisation briefing papers.

Ongoing advocacy-related engagement with Rio Tinto by ACCR can only be possible again if the company clearly and formally updates its advocacy position on the EPBC Act reforms and undertakes Federal climate engagement that better reflects its own commitment to enhancing climate policy in Australia.

ACCR informed Rio Tinto of its position directly in a Civil Society Roundtable forum on Monday 29 July.

There is no doubt that other powerful stakeholders, including the Business Council of Australia and the Minerals Council of Australia, want to keep any mention of climate change out of federal law. Rio Tinto has an opportunity to be a leader, and update its public position to support greater climate considerations in federal environmental assessments and to be more transparent about its climate lobbying activities into the future.

Key points:

• Negative climate-lobbying is a risk to investors. It hinders both the capacity of the economy to meet net-zero in a timely fashion, along with investors' own portfolio-wide climate targets.
• Positive policy advocacy is an opportunity to mitigate climate risk. Investors are intensifying their focus and monitoring of corporate lobbying, understanding it is essential not only for securing their investments but also for navigating a future shaped by stricter environmental regulations and a shift to a low-carbon economy. ACCR would expect climate-aware companies to engage with the federal environmental reforms as an opportunity to discuss how climate change impacts of proposed new projects could be considered by federal decision makers.
• It is critically important for companies to provide transparent and comprehensive disclosures on their lobbying efforts to ensure they align with their stated climate goals.
• ACCR welcomes constructive company engagement. This disengagement is specific to an arrangement we have had with Rio Tinto to assist and provide insights into decarbonisation of their assets and positive climate policy opportunities. It was untenable to continue working in good faith on these briefings when Rio Tinto is actively lobbying in a way that undermines the objective of this working relationship.
• ACCR has made it clear to the company that it is now up to Rio Tinto to demonstrate an updated position regarding climate considerations in the EPBC Act, and policy engagement that better reflects its own commitment to enhancing climate policy in Australia. At that point we will re-engage on the decarbonisation policy opportunities.
• Rio Tinto has argued the proposed EPBC changes duplicate requirements in the Safeguard Mechanism (SGM) - this is not quite right. While the SGM does require reporting of scope 1 & 2 operational emissions for certain large projects, it was never designed to assess the lifecycle climate change impacts of proposed new major projects. The EPBC Act sets the federal government’s assessment considerations for new projects.

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