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Rio Tinto under pressure from activist group Market Forces to set carbon emission targets

Activist group Market Forces is pushing Rio Tinto to disclose its short and long-term carbon emission targets at its annual meeting.

Rio Tinto is under pressure to set targets for carbon emissions
Rio Tinto is under pressure to set targets for carbon emissions

Rio Tinto will be asked to outline short and long-term targets for its so-called Scope 3 carbon emissions, with environmental investor activist group Market Forces pushing for the disclosure at the mining giant’s upcoming annual meeting.

Market Forces, which is backed by environmental group Friends of The Earth, is taking aim at Rio Tinto with a shareholder resolution urging Rio to disclose short, medium and long-term targets for Scope 3 greenhouse gas emissions as well as performance against the targets.

The activist group has secured support from the minimum required 100 shareholders with Rio Tinto confirming the resolution will be included for its May 7 annual meeting in Brisbane.

“Targets should reflect decarbonisation pathways for the company’s products in line with the climate goals of the Paris Agreement,” Market Forces said in briefing notes accompanying the shareholder resolution.

Market Fores is seeking support from super funds for its shareholder resolutions.

Rio Tinto is also scheduled to hold an annual meeting in London on April 8, although the resolution only applies to the Australian meeting.

Rio is one of three companies Market Forces is targeting for the coming annual general meeting season, with financial services group Suncorp and insurer QBE both facing shareholder resolutions demanding the company cut “investment and underwriting exposure to oil and gas assets”.

Rio Tinto last traded at $98.43
Rio Tinto last traded at $98.43

Rio has previously sidestepped demands from activist shareholders for it to set targets for so-called Scope 3 carbon emissions — those made as Rio’s products are smelted or used downstream — saying it could not control how its customers ran their businesses.

However, last September it took a step to addressing pressure from environmentalists and activist shareholders, striking a deal with one of its biggest steel customers to research ways to reduce ­carbon emissions in the steel ­industry.

Rio entered into an memorandum of understanding, which includes Chinese university Tsinghua as a partner, with China’s biggest steelmaker China Baowu Steel Group (formerly ­Baosteel). The aim is to develop new methods to reduce carbon emissions and improve environmental performance across the steel value chain — including Rio’s iron ore operations, Baowu’s steel mills, and the massive logistical chain connecting Pilbara mines with China’s mills.

But Market Forces said in its resolution notes that Rio’s agreement with China Baowu Steel Group and Tsinghua University “lacks any detail or commitment to ensure Paris-aligned emission reductions”.

It also noted that Rio’s two major global diversified mining peers, BHP and Vale, have committed to set scope 3 emissions targets in the near future. BHP’s former CEO Andrew Mackenzie last July outlined a plan to set targets on so-called Scope 3 emissions, in what represented a significant shift in positions typically held across the resources sector.

BHP’s new chief executive Mike Henry has said BHP’s position of climate change remained unmoved. Swiss mining giant Glencore, the world’s biggest coal producer, made a commitment early last year to start reporting on projections for the intensity reduction of Scope 3 emissions.

David Rogers
David RogersMarkets Editor

David Rogers began writing about financial markets in 1987. He has worked for Standard & Poor's, Thomson Financial, BridgeNews, Tolhurst Noall, Dow Jones Newswires and The Wall Street Journal. David has extensive real-time reporting experience in economics, foreign exchange, equities, commodities and bonds.

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Original URL: https://www.theaustralian.com.au/business/mining-energy/activist-group-pushes-rio-tinto-to-set-carbon-emission-targets/news-story/9e1e26a5527168cfe099652d4f0ea0ed