AP7, Church of England defeated at Rio Tinto shareholder meeting

Rio Tinto shareholders have rejected a resolution calling for improved governance over the company’s membership of lobbying organisations in relation to climate change.

The company board and main proxy voting advisers had recommended a vote against the resolution.

However, there was strong support for the resolution’s co-filers, which included the Church of England Pensions Board (CEPB), Sweden’s AP7, Australia’s Local Government Superannuation Fund, and the Australasian Centre for Corporate Responsibility (ACCR).

The resolution was presented at the annual general meeting of Rio Tinto Limited (RTL), the group’s Australian arm, held in Melbourne. Rio Tinto is listed both on the London Stock Exchange and the Australian Securities Exchange, with headquarters in both London and Melbourne.

The resolution called on the board to undertake a review regarding the current use of shareholder funds to support industry associations and lobby groups. The board were asked to publish how much they spend on these trade associations and ensure appropriate governance processes surrounding the issue.

The resolution specifically sought to address RTL’s funding of trade associations – such as the Minerals Council of Australia – which lobby in public and in private, contrary to the company’s own stated support for the Paris Agreement and efforts to combat climate change.

Over 18% of shareholders voted for the resolution, representing investors with £1.8trn (€2bn) under management. The investors also included CalPERS, CalSTRS, Legal & General Investment Management and Aegon Asset Management.

Adam Matthews, head of engagement for the CEPB, said: “This is the largest shareholder revolt against management on the issue of climate change in Australian corporate history.”

He added: “This was a very reasonable resolution that justified a better response from Rio Tinto’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 Tinto’s funding of trade associations.” 

Matthews also said that the CEPB would continue to engage with Rio Tinto’s board and work together with the funds that had supported the resolution.

Last year, Church Commissioners for England – a sister organisation to CEPB that manages post-1998 retirement benefits – was part of a consortium that successfully persuaded oil giant ExxonMobil to implement climate change measures. This was despite losing a shareholder vote on a resolution in 2016.