Investors in the mining giant Rio Tinto are being recruited to demand the company quit the Minerals Council of Australia.
The Australasian Centre for Corporate Responsibility (ACCR) has urged shareholders to co-file a resolution at Rio Tinto’s upcoming annual general meeting. In 2017 the centre successfully filed a similar motion at BHP’s AGMs, leading the company to review its membership of trade associations.
In that review, published in December, BHP warned the MCA it would quit the body if it did not change its lobbying practices in relation to coal.
BHP and Rio Tinto are the MCA’s two biggest members. BHP provides the MCA with 17% of its income from membership fees and it is believed Rio Tinto contributes a similar amount.
Emerging from a meeting with BHP executives on Monday, the chief executive of ACCR, Brynn O’Brien, said she had told them the group was preparing its shareholder motion. She said the group needed to find 100 shareholders by the end of the month to move a resolution.
She said it would be very similar to the one filed at BHP’s AGMs, which received support from more than 9% of shareholders.
That resolution said the Minerals Council had “diminished the federal government’s ability to resolve a national policy issue of material relevance to our company and the stability of its operations”.
“The MCA’s activities undermine the possibility of achieving what our company has stated an ‘effective policy framework’ should include: a complementary set of measures including a price on carbon, support for low-emissions technologies, energy efficiency and measures to build resilience.
“Over time, these activities have the potential to undermine shareholder value, given our company’s exposure to climate-related risk and energy instability.”
O’Brien said Rio Tinto shareholders might be even more likely to support such a resolution, since the company is based in the UK, where more active shareholder engagement is common.
“There’s a greater familiarity of UK investors to the process of shareholder resolutions and more comfort with robust engagement in public with big companies,” O’Brien said.
O’Brien said discussions with Rio Tinto were continuing and no decision would be made on filing the resolution until the last minute.
She declined to say what Rio could do to avoid the resolution but said simply committing to a review of trade association memberships – as BHP did – would not be enough.
“We think the commitment to doing a review doesn’t wholly manage the financial risks they face as a major energy user, or the social and reputational risks they face.”