Mining giant Rio Tinto loses investor votes in AGM

April 15, 2022

Rio Tinto is under fire from investors following a lack of clarity about climate change risks, questionable audit committee performances, and reports of sexual harassment and bullying.

Investors have voted against the financial statements of Rio Tinto, the world's second-largest metals and mining corporation, over a lack of clarity about climate change risks and the audit committee's questionable performance.

Ahead of the vote at Rio Tinto’s annual general meeting (AGM) on 8 April 2022, investment management firm Sarasin & Partners declared its intention to vote against the company’s financial statement due to a lack of disclosure on 1.5°C resilience.

Sarasin & Partners also voted against keeping KPMG as auditor, with the firm’s head of stewardship Natasha Landell-Mills noting that “KMPG provides commentary on climate considerations but provides no disclosure as to how it has tested consistency with a 1.5°C pathway, or the emission targets set by the firm”.

In the A100+ Climate Accounting and Audit Assessment – 2022 Update, it was noted there were “significant reporting concerns over which the Audit Committee (AC) has responsibility on behalf of the board – both the financial statements and the audit”.

It also highlighted: “The AC also explicitly confirms that the 'central case' assumptions used in the financial statements 'is not aligned with the goals of the Paris Agreement'.”

Meanwhile, the investment manager abrdn abstained from approving Rio Tinto’s reports and accounts following a report that exposed sexual harassment, bullying and racism, according to media reports.

This follows publication of the Broderick Report which concluded that bullying at Rio Tinto is systemic, sexual harassment and everyday sexism occur at unacceptable rates and racism is common across a number of areas.

ESG Clarity reported that Andrew Mason, abrdn stewardship director, said: “In light of the nature, severity and systemic impacts of the issues raised, we have decided to abstain from our vote to approve the company’s reports and accounts. If we do not see progress against the milestones set by the company, we will take further actions.”

The results of the AGM will not be fully disclosed until after an AGM takes place in Melbourne on 5 May.

Minerva covered these Rio Tinto developments extensively in our Minerva Briefing released in March. Watch a summary of the Briefing or download the full document.