Media release

Rio Tinto becomes first Australian company to commit to climate vote

17th February 2021

The Australasian Centre for Corporate Responsibility (ACCR) is welcoming Rio Tinto’s commitment to an advisory vote on its climate strategy at its AGM in 2022.

Rio Tinto is the first Australian-listed company to commit to such a vote, joining Glencore, Unilever, Aena and Moody’s in making such a commitment.

ACCR has filed shareholder resolutions for 2021 to Santos (ASX: STO) and Woodside Petroleum (ASX: WPL), asking for an annual vote on the adoption of a Climate Report consistent with the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) and the Climate Action 100+ Net-Zero Company Benchmark as developed by institutional investors.

Commenting on Rio Tinto’s commitment, Dan Gocher, Director of Climate and Environment, said:

“We welcome Rio Tinto’s leadership and commitment to put its climate strategy to a vote in 2022, and urge Rio Tinto to commit to making this vote an annual exercise.

“There is currently no legal obligation for major polluters to disclose climate-related risks.

“Rio Tinto is Australia’s third largest carbon emitter, responsible for more than 30 million tonnes CO2-equivalent annually. Rio Tinto’s existing climate commitments are underwhelming to say the least, compared to its peers BHP and Fortescue Metals Group.

“We expect Rio Tinto to substantially increase its ambition before 2022.

“This commitment heaps further pressure on Santos and Woodside to support ACCR’s resolutions, which will allow shareholders a vote on their climate plans.

“Currently, Santos and Woodside targets amount to business-as-usual, relying largely on buying cheap carbon offsets in the short term, and unproven technologies—like carbon, capture and storage (CCS)—in the long term. Yet shareholders have no formal mechanism to object to these plans.

“Due to the rapid transition taking place in the energy sector, it is imperative that shareholders are provided with sufficient information to assess the future earnings and value of these companies.

“The Say on Climate framework will provide shareholders with the opportunity to send a clear signal to the board about whether the company is effectively managing the risks of climate change.”

Background

Say on Climate is a major, global climate-corporate governance initiative launched in 2020 by TCI Fund Management, the activist fund run by Chris Hohn, and its charitable foundation, the Children’s Investment Fund Foundation (UK) (CIFF).

The aim of the initiative is to generate a widespread increase in focus of listed companies and their investors on developing and delivering Paris-aligned plans, with increased accountability around substance of and performance against those plans through annual shareholder votes.

The precedent for this approach was set by TCI’s work at the Spanish airport group, Aena’s AGM in October 2020, where the resolution to introduce this requirement received 98% support after it was endorsed by the company’s board.

Companies which have voluntarily adopted a shareholder vote:

Resolutions have been filed with a number of companies globally, and statements of support made by various asset managers and asset owners (see Attachment). Mark Carney (UN Special Envoy for Climate Action and Finance) is a public supporter of the initiative.

Learn about global Say on Climate activity on their website.