Institutional investors in Rio Tinto, have filed a resolution calling on the mining group to cease membership of the Minerals Council of Australasia (MCA)  which they believe is primarily a lobby group for the coal industry. Rio Tinto will hold its UK AGM in April and its Australian AGM in May.

The shareholder action has been coordinated by the Australasian Centre for Corporate Responsibility (ACCR) and among the co-filers of the resolution such as the Church of England Pension Board and the Swedish pension fund, AP7. The ACCR contends that membership of the MCA is an expensive use of shareholders money and that the Rio Tinto and the MCA’s positions on climate change and energy policy are increasingly divergent.

The ACCR said: "Put simply, the MCA is lobbying for more coal and use of fossil fuels, and still believe this is the future of energy. Rio Tinto, on the other hand, needs to be a part of Australia’s transition to renewable energy sources. It just doesn’t make sense for Rio Tinto to spend shareholders funds’ on supporting the MCA, who have all their eggs in one basket, when that basket is full of coal."

The campaign follows the announcement last year by rival mining group, BHP Billiton, that it would cease membership of the World Coal Association following a review of its membership of industry associations based on their policies relating to climate and energy. The company said it would remain a member of the MCA but stated it would formally communicate identified material differences with its policies to the MCA board; request that the MCA refrain from policy activity or advocacy in these areas; and it would maintain a register of material differences.

Banks still need to do more to address climate change

Banks have improved their knowledge-sharing of climate risks but overall still have more work to do to address climate change, according to the analysis of 59 global banks by Boston Common Asset Management.

The research found that while 97% are involved at some level in industry or multi-stakeholder groups to advance knowledge-sharing and collaboration around climate risks and solutions and 95% have adopted specific climate governance only 58% of the banks had a group-wide climate strategy in place and less than half (41%) ensured the trade associations or industry groups of which they are members adopt progressive climate policies in line with their own.

Boston Common Asset Management has been engaging with the 59 banks for the past four years after initial analysis of their climate change analysis published in 2014. The latest analysis stated that banks continue to be exposed to carbon-intensive sectors with a recent report from environmental groups, indicating that between 2014 and September 2017, the global banking sector provided $600 billion in financing for the top 120 coal plant developers.

At the same time, Boston Common Asset Management said climate change should mean opportunities for banks with $12 trillion of investment needed by 2030 in renewable power generation alone to limit global warming to 2ºC. Meanwhile, green bond issuance is predicted to reach $250 billion in 2018, according to Moody’s. Banks that finance the transition to a low carbon economy stand to benefit across all business functions, the report stated.

The report forms part of Boston Common Asset Management's campaign to improve the response of the banking sector to climate change. Last year it and responsible investment group, ShareAction, co-ordinated a letter signed by over 100 investors with $1.8 trillion assets under management, to the chief executives of 60 of the world’s largest banks. This called or more robust and relevant climate-related disclosure to be supplied to investors on four key areas: climate-relevant strategy and implementation, climate-related risk assessments and management, low-carbon banking products and services, and banks’ public policy engagements and collaboration with other actors on climate change.