The board of Rio Tinto has backed a shareholders push that would require the company to set emissions targets consistent with the Paris agreement and suspend membership of industry associations that lobby against action on the climate crisis.

In a statement to the ASX on Friday afternoon, the mining company recommended shareholders endorse two resolutions brought by activist groups, the Australasian Centre for Corporate Responsibility (ACCR) and Market Forces, ahead of Rio’s annual general meeting in May.

“For the first time, the board of an Australian company has supported a shareholder resolution, Rio Tinto should be commended for this,” Dan Gocher, the director of climate and environment at the ACCR, said.

“The board of Rio Tinto, already under significant pressure from shareholders, has finally acknowledged that its funding of Australia’s climate stalemate goes against its own long-term interests.”

In an addendum to its notice of its 2021 AGM, the company said it was recommending shareholders vote in favour because its current approaches were already “substantially consistent” with both of the proposed resolutions.

The ACCR’s resolution calls on Rio Tinto to strengthen its annual review process examining industry and lobby groups of which it is a member, such as the Minerals Council of Australia, the Queensland Resources Council and the Chamber of Minerals and Energy of Western Australia.

The resolution proposes the company suspend its membership if the association’s record of advocacy and lobbying is found, on balance, to be inconsistent with the Paris agreement.

Gocher said Rio Tinto’s most recent review, published last month, failed to identify any misalignment within its Australian industry associations, despite an advertising campaign run by the Queensland Resources Council during last year’s state election and the council’s support for the Morrison government’s so-called gas-fired recovery.

“Yet Rio Tinto has steadfastly refused to comment on this advocacy, or attempted to rein it in,” he said.

Rio Tinto said on Friday it would consider suspending its membership if it identified significant inconsistencies but remained of the view that “securing advocacy aligned with the Paris agreement is best pursued from a position of influence from within such associations”.

“In weighing up the relative merit of continued membership, the board will exercise a balanced judgement of what is in the best interests of the company and will consider suspension of membership as a measure of last resort,” the statement said.

The resolution moved by Market Forces asks Rio Tinto to disclose its short, medium and long-term targets for its Scope 1 and Scope 2 emissions, its performance against those targets, and for those targets to be independently verified as consistent with the goals of the Paris agreement.

Scope 1 emissions are the direct emissions from a company’s operations, while Scope 2 emissions are the indirect emissions from the energy used by the company.

Julien Vincent, the executive director of Market Forces, said the board’s recommendation was an “important recognition from Rio Tinto that its climate ambition has been inadequate so far”.

Rio Tinto said its 2020 annual report set out its Scope 1 and 2 targets and its performance against them was “independently assured”.

It said the company described how these targets aligned with the Paris agreement in its climate change report.

“Rio Tinto will continue to disclose these targets and its independently assured performance against them in its annual reports in the decade ahead,” the company said.

Market Forces, in its supporting statement to its shareholder resolution, said targets announced by Rio Tinto in February last year to reduce Scope 1 and 2 emissions by 15% by 2030 from a 2018 baseline fell well short of what could be considered consistent with the Paris agreement.

Vincent said that assessing the company’s performance against those targets was not sufficient if they were not also being independently audited for consistency with the Paris agreement.

“The material supporting our resolution makes clear that Rio Tinto’s current targets fall well short of what’s required to be in line with the Paris agreement,” Vincent said.

“It’s a really odd contradiction – Rio Tinto is claiming to be Paris aligned while endorsing a resolution that establishes how it isn’t.”

Vincent said the bigger task would be to address Scope 3 emissions and the organisation intended to lodge a shareholder resolution on Scope 3 emissions ahead of Rio Tinto’s 2022 AGM.

Scope 3 emissions are indirect emissions that occur in the value chain, such as from the processing and use of products a company sells and the transportation of those products, both domestically and overseas.

“The main game on climate is Rio Tinto’s Scope 3 emissions, which are 94% of the company’s total carbon footprint, and equivalent in size to Australia’s total emissions,” Vincent said.

“Rio Tinto’s next climate risk report needs to clarify its risk appetite to this massively carbon liability, and tell shareholders how much it is prepared to be exposed to Scope 3 emissions in future.”

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