Rio Tinto Urged to Change Tack on Climate Lobbying
ACCR accuses the mining company of hypocrisy and greenwashing after it advocated for the weakening of climate rules.
The Australasian Centre for Corporate Responsibility has said it could re-engage with mining giant Rio Tinto if it formally changed its “hypocritical” policy on a key climate reform in Australia.
Last week, the shareholder advocate and activist group announced it had ended a year-long engagement with Rio Tinto on climate advocacy after it emerged the company had lobbied the Australian government to water down new environmental laws.
ACCR said this was a “difficult but necessary” decision following an unsatisfactory meeting with Rio Tinto management.
But in a subsequent note to investors issued two days after it announced the decision, ACCR said it could re-engage with the world’s second biggest miner if it “clearly and formally updates its advocacy position” on the law, and “undertakes federal climate engagement that better reflects its own commitment to enhancing climate policy in Australia”.
Nature-negative
The origin of the dispute was a letter Rio co-wrote with fellow iron ore miner Hancock Prospecting, calling on Australian Prime Minister Anthony Albanese to personally intervene to water down amendments to the Environment Protection and Biodiversity Conservation (EPBC) Act 1999.
The letter was written in March, but was only recently released under Australia’s freedom of information laws at the request of non-profit Greenpeace.
In it, Rio’s CEO of Iron Ore Simon Trott and Hancock CEO Garry Korte issued a long list of requested changes to the EPBC Act – known as the Nature Positive Plan and designed to “better protect, restore and manage” Australia’s unique environment.
Rio and Hancock’s wishlist included a request that the government abandon a requirement that new mining and other developments report their expected Scope 1 and 2 emissions, and “disclose how their project aligns with Australia’s national and international obligations to reduce emissions”.
It was this request that the ACCR objected to, viewing it as anti-climate lobbying.
“ACCR considers Rio Tinto’s advocacy directly to the Prime Minister to be inconsistent with the company’s own commitments for enhanced climate advocacy and transparency,” the group explained in a statement on Wednesday.
“It is also a breach of the good faith agreement between ACCR and Rio Tinto, which had seen ACCR meeting with the company since July 2023, working towards supporting Rio Tinto’s public commitment to positive climate advocacy and decarbonisation briefing papers.”
In response, Rio said in a statement: “We believe reform should drive both stronger environmental and heritage protections and more efficient approvals processes.”
Another reputational blow
The developments are a setback for Rio in its attempt to restore its reputation after it blew up ancient Aboriginal rock shelters at Juukan Gorge, Western Australia, in May 2020. That culturally destructive act was a public relations disaster for the company and led to the resignation of then-CEO Jean-Sébastien Jacques.
Jacques was replaced by Jakob Stausholm, who has since ramped up the group’s production of copper – a key metal in electrification – and stressed the company’s broader role in supplying materials for the green transition.
Unlike major sector rivals such as BHP, Anglo American and Glencore, Rio Tinto does not produce coal or any other fossil fuels. It is also one of the few major diversified miners to pursue lithium, an essential metal in electric vehicle batteries, and is working with steelmakers in Australia and China to develop low-carbon methods of steelmaking.
Still, the company has an eyewatering carbon footprint, dwarfing those even of main competitor BHP – thanks to the Scope 2 emissions from its electricity-intensive aluminium business, and the Scope 3 emissions from its vast iron ore division, the biggest in the world.
Last year, Rio’s total Scope 1, 2 and 3 emissions represented a shocking 610.7 million tonnes of CO2 equivalent. That’s more than Australia’s emissions per annum, and almost as much as Germany, Europe’s biggest economy and an industrial powerhouse, produced in the same period.
‘Hypocritical’
Climate lobbying is one ACCR’s key focuses, and its decision to abandon engagement with Rio further demonstrated how seriously it takes the issue.
On 26 July, ACCR met Rio’s Australia CEO Parker who apologised for the way the company had managed its engagement with ACCR on the issue and “acknowledged the need to rebuild trust”. However, Parker stopped short of providing assurances that the group would end its lobbying against the law.
Naomi Hogan, Company Strategy Lead at ACCR, said Rio’s position was hypocritical, and that in light of its lobbying activities – constructive engagement could “rightly be perceived as greenwashing”.
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