ACCR seeking shareholders for resolution at Rio Tinto AGM

The Australasian Centre for Corporate Responsibility (ACCR) is seeking Rio Tinto shareholders to support a resolution on lobby group spending at Rio’s forthcoming AGM.

ACCR is seeking 100 or more shareholders to support a resolution calling on Rio Tinto to quit its membership in the Minerals Council of Australia (MCA). ACCR says that Rio Tinto’s position on climate change and energy policy is no longer aligned with MCA’s lobbying policies, and thus, it “doesn’t make sense” for Rio Tinto to spend shareholder money on supporting the MCA.

ACCR launched its public call for Rio shareholders at the beginning of February, and have already seen sign-ups via its website, said Brynn O’Brien, ACCR executive director.

“We need 100 qualified members of the company to co-file a resolution with us, and we’re not there yet,” she said. “We’re confident of getting there, but we’re not there yet. As I understand it, institutional investors in Australia have been engaging with Rio for at least three years, specifically on the topic of trade associations with unaligned agendas. These are not new concerns. They’re concerns that have been put to Rio over some years.”

Rio Tinto’s Australian AGM will be held in Melbourne on 2 May. O’Brien says the engagement with Rio Tinto on the subject of its membership in MCA will be “very focused” because of the timeline to the AGM.

Last year, ACCR engaged with BHP Billiton on the same issue and gathered sufficient shareholder support to put a similar resolution to its AGM. BHP subsequently published a report outlining differences between BHP Billiton’s climate and energy policy and several lobby groups of which it has been members. As a result, BHP Billiton announced it would leave the World Coal Association at the end of March 2018, and that it would review its membership in MCA in 12 months if MCA continues to lobby for coal-fired power generation.

There are similarities between the engagement campaign that ACCR conducted with BHP Billiton and with Rio Tinto, O’Brien said.

“Rio’s business is different in some notable extents, but the concerns about lobbying by trade associations that don’t align with the business are uniform across Rio and BHP,” she said.

ACCR’s 2017 engagement campaigns included BHP Billiton as well as a resolution lodged at Woolworths’ AGM that was subsequently withdrawn. The resolution asked the company to provide annual disclosure to shareholders on potential and actual human rights impacts in the company’s supply chain. It was withdrawn after Woolworths committed to providing more disclosure on human rights impacts.

ACCR would consider pulling its shareholder resolution to Rio if the company made commitments to following through on what the resolution proposes, O’Brien said.

“Resolutions are very effective instruments in focusing the board’s attention,” she said. “Rio knows that it’s on the table, and that’s what ACCR is known for.”

ACCR is also planning for another busy year in 2018, O’Brien said.

“We usually to do a piece of research and follow that up with engagement,” she said. “In terms of our research, we have two planed – one is on trade associations, but beyond the mining sector and beyond the MCA. The other is on the gender pay gap across the ASX100. We’re still in the design phase of that research.”