Mining cooperation Rio Tinto has announced new commitments to “enhance” disclosure on plans to reduce Scope 3 emissions from iron ore processing for steel production following investor engagement.
This decision comes after the Australian Centre for Corporate Responsibility (ACCR) informed Rio Tinto of its intention to file a shareholder proposal requesting additional disclosure on plans to reduce Scope 3 emissions from the processing of iron ore at its Annual General Meeting (AGM).
Currently, the mining company emits 400 MtCO2 from the processing of iron core, which is 65% of the company’s total carbon footprint.
Alongside the ACCR, Fidelity International and the Australian Council of Superannuation Investors, which are both members of Climate Action 100+, were also part of the investor group leading engagement with Rio Tinto.
Rio Tinto has committed to enhancing disclosures prior to its 2025 AGM, which includes: expenditure on steel decarbonisation and its forecast over a three years; expenditure on Rio-Tinto-led decarbonisation projects and financial contributions to related partnerships; and abatement opportunities of announced projects and partnerships.
Alf Barrios, chief commercial officer at Rio Tinto, said: “Our commitment on Scope 3 is to partner with our customers and suppliers to help them achieve their emissions targets a decade earlier.
“Constructive dialogue with CA100+, ACCR and others on the practical approaches we are taking to address Scope 3 is helpful in shaping our strategy and our reporting in this area.”
According to Climate Action 100+, Rio Tinto’s Scope 3 emissions from iron ore processing relies on its customers shifting to green steel manufacturing technology. Therefore, investor engagement focused on enhancing the Scope 3 disclosure and abatement plans of the company.
Daniela Jaramillo, head of sustainable investing at Australia, Fidelity International, said: “On reflection, the key elements that we believe were key to this success are: first, as investors, recognising the need to pivot our approach, be pragmatic and sometimes adjust our engagement objective to the second-best outcome; second, alignment between stakeholders like the CA100+ leads in Australia and Europe as well as ACCR.
“Third, using multiple stewardship tools including engagement at board and management levels, having disclosure asks and also incentive/remuneration related asks.
“Finally, we must recognise the role of ACCR’s threat of escalation with a shareholder proposal, which catalysed the commitment from the company. These learnings can contribute to future successful corporate engagement outcomes.”
This collective shareholder success comes as some asset owners such as JP Morgan and State Street have left Climate Action 100+, whilst manager BlackRock has stepped back its involvement.
