Stockholm (NordSIP) – A shareholder resolution co-filed by Swedish National Pension Fund AP7 calling for improved governance over global mining company Rio Tinto’s membership of lobbying organisations in relation to climate change was defeated by the company board and proxy voters last week (May 2), despite drawing 18 per cent of the vote at Rio Tinto Limited [the company’s Australian branch]’s Annual General Meeting in Melbourne.
The resolution called on Rio Tinto Ltd.’s board to undertake a review of the current use of shareholder funds to support industry associations and lobby groups, and to publish how much is spent on these as well as ensure appropriate governance processes related to the issue.
Other sponsors of the resolution included the Church of England Pensions Board, the Australasian Centre for Corporate Responsibility (ACCR) and Local Government Super, an Australian pension fund.
Despite the failure of the resolution, it was the largest vote for a shareholder resolution related to climate change without board support in Australian corporate history, according to Adam Matthews, Head of Engagement for the Church of England Pensions Board. “It’s a highly significant vote on an important issue of Rio’s support of trade associations and their negative lobbying to prevent action to address climate change,” he said.
“This was a very reasonable resolution that has gathered the support of many shareholders with trillions in assets under management. It justified a better response from Rio’s Board and I would encourage the Chairman to now take the opportunity to commit to undertake the called for review as well as to publish Rio’s funding of trade associations. It is clear a large element of Rio shareholders would welcome such a step,” Matthews added.
The failure of the resolution was seen not as much as a defeat as a considerable wakeup call for corporations and a turning point for corporate governance by those supporting the motion. “This vote is a watershed moment in Australian corporate governance and it will have hit home with boards across the sector,” commented ClientEarth climate lawyer Sophie Marjanac.
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