Rio Tinto investors vote against financial statements in climate protest

theguardian.com:

Rio Tinto investors have voted against the company’s financial statements over a lack of clarity about climate change risks at the mining giant’s London annual general meeting.

Ahead of the vote, investment management firm Sarasin & Partners declared its intention to vote against the company’s financial statements, against keeping accounting firm KPMG on as auditor and questioned the performance of the company’s audit committee.

A note from the firm’s head of stewardship, Natasha Landell-Mills, said Rio Tinto had not disclosed key material about how it would transition to a zero carbon economy.

“While Rio has increased its discussion of climate risks and made clear that its accounts are not 1.5C aligned, thereby providing welcome transparency, it does not provide disclosures on its quantitative assumptions, or visibility as to how it would be impacted if its own stated goal to be 1.5C-aligned were achieved,” Landell-Mills said.

The note did not say the firm was voting against the company’s climate statement.

Auditors are essential to making investment decisions and any failure to identify, discuss and disclose whether a company is able to meet its climate commitments, and the risk of stranded assets, means investors will be left on the hook.

Rio Tinto’s largest source of carbon emissions are scope 3 emissions – the emissions created by assets not owned or controlled by the reporting organisations.

As the smelters responsible for turning its iron ore into steel operate in China, Japan and South Korea, and are not owned by the company, the mining giant has so far resisted placing a target on scope 3 emissions.

But investors have been increasingly putting pressure on the company to act.

An assessment by the Australasian Centre for