Investors in Rio Tinto Ltd have renewed efforts to force the world’s biggest iron ore miner to commit to targets that would scale back emissions of its customers in line with the Paris Agreement on combating climate change.
A group of institutional investors represented by Market Forces has updated a resolution to be presented at Rio Tinto’s annual general meeting in Brisbane on May 7, the unit of environmental group Friends of the Earth said on Thursday.
Shareholders want Rio Tinto to report annually on short, medium and long-term targets for its direct and indirect greenhouse gas (GHG) emissions, as well as those of its end customers – known as scope 1, 2 and 3 emissions – and performance against those targets.
“Rio Tinto had set expectations that we would see Paris-aligned targets to reduce their operational emissions this year, but what they announced falls well short of anything that could be considered consistent with the Paris climate goals,” said Market Forces Executive Director Julien Vincent.
“Rio Tinto is essentially telling its shareholders it is aware of a massive financial liability sitting on its books, but isn’t planning to manage that risk down.”
Rio Tinto declined to add to last week’s comments when contacted by Reuters.
Rio announced plans last week to cut its carbon intensity by 30 per cent and its absolute emissions by 15 per cent by 2030, and said it would invest $US1 billion ($A1.5 billion) over five years in climate change initiatives.
As for customer emissions, Chief Executive Jean-Sebastien Jacques has repeatedly said they are outside Rio’s control.
“There is no clear pathway right now for the world to get to a net 0 emission by 2050,” Jacques said on an earnings call last week. “The ambition is clear, but the pathway is not.”
Rio’s direct and indirect emissions stood at 28.6 million tonnes in its 2018 climate report, just 5 per cent of a total – including scope 3 – which is almost as high as the total annual emissions of Australia, Market Forces said.
Steel-making generates 7 per cent to 9 per cent of global emissions, showed data from the World Steel Association, making it among one of the highest emitting industries.
“Rio Tinto has plenty of options to work with its customers to reduce its exposure to this transitional climate risk, from cleaner fuels to efficiency improvements, and can diversify its portfolio to minimise exposure to high levels of Scope 3 emissions,” Market Forces said.
An agreement last year with major steel maker China Baowu Steel Group Corp Ltd and Tsinghua University to explore methods of reducing carbon emissions along the steel value chain lacks detail or commitment to ensure Paris-aligned emission reductions, it said.
Peers BHP Group Ltd, Vale SA and coal giant Glencore PLC have agreed to cut exposure to scope 3 emissions, whereas Fortescue Metals Group Ltd has said policing emissions of its customers is not its job.