A resolution co-filed by the Church of England Pensions Board challenging Rio Tinto’s continuing support for pro-coal lobby groups has failed at the company’s AGM. But the resolution attracted the support of 18.3 per cent of Rio Tinto’s shareholders, including Aegon and Legal & General, in what the C of E described as “the largest vote for a shareholder resolution related to climate change, without board support, in Australian corporate history.” In addition to the C of E Pensions Board, the resolution was co-filed by the Australasian Centre for Corporate Responsibility, the Australian pension fund Local Government Super, and The Seventh Swedish National Pension Fund.
Rio Tinto has moved out of coal mining, saying it did not provide a long-term fit for its portfolio. It sold its last coal operation, the Kestrel mine in Australia’s Queensland state, in March, for $2.25 billion USD (approximately £1.65 billion GBP). But it retained its membership of the coal mining lobbying firm the Minerals Council of Australia, and it was this that was the subject of the C of E’s resolution, as the body continues to campaign in support of coal.
“This is the largest shareholder revolt against management on the issue of climate change in Australian corporate history,” Adam Matthews, the head of engagement for the Church of England Pensions Board, said. “It’s a highly significant vote on an important issue of Rio’s support of trade associations and their negative lobbying to prevent action to address climate change.
“This was a very reasonable resolution that has gathered the support of many shareholders with trillions in assets under management. It justified a better response from Rio’s Board and I would encourage the Chairman to now take the opportunity to commit to undertake the called for review as well as to publish Rio’s funding of trade associations. It is clear a large element of Rio shareholders would welcome such a step.
“Going forward we will continue to engage with Rio’s board and will work together with the funds that have supported our resolution. I would also like to pay tribute to the partnership we have developed with the co-filers, as well as the support we have had from Client Earth and ShareAction.”
Anita Foerster, senior research fellow at the University of Melbourne and Jacqueline Peel, the university’s professor of environmental and climate law, said that the resolution “signals a coming of age for investor engagement on climate change in Australia.” Writing in The Conversation, they said: “Shareholder resolutions have clearly become an important part of the toolbox for civil society in Australia seeking to influence corporate decision making on climate change.
“As mainstream investors come on board with these resolutions, their potential impact is heightened considerably. For their part, Australian institutional investors seem to be increasingly willing to stand behind calls for better disclosure and management of climate risks by the companies in which they invest, including by forming new alliances and supporting the use of these more activist tools.”