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Rio asks shareholders to vote against emissions resolution

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Rio asks shareholders to vote against emissions resolution
FILE PHOTO: A sign adorns the building where mining company Rio Tinto has their office in Perth, Western Australia, November 19, 2015. REUTERS/David Gray/File Photo   -   Copyright  David Gray(Reuters)
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MELBOURNE (Reuters) – Rio Tinto said on Monday it would recommend that shareholders vote against a resolution requiring the miner to report its direct emissions and those of its customers in greater detail.

In a notice ahead of its annual general meeting in May, Rio said shareholders should vote against the proposed rule change that would have it set transition plans that adhere to the goals of the Paris Agreement to limit global warming to 1.5 degrees Celsius (2.7 Fahrenheit).

Those plans would include short-, medium- and long-term targets to reduce scope 1, 2 and 3 greenhouse gas emissions, and detailed strategies to meet the targets in each annual report starting from 2020, according to the proposed resolution.

Scope 1 emissions refer to direct emissions from company’s activities, scope 2 emissions are indirect such as from purchased power. Scope 3 emissions are those created by customers of a company’s product.

“Rio Tinto is currently undertaking detailed engineering, economic and policy analysis on an asset-by-asset basis to inform new Scope 1 and 2 emissions reduction targets to replace our existing targets, which expire in 2020,” Chairman Simon Thompson said in a filing to the Australian bourse.

Rio Tinto, which released its own climate change report last month, advised voting against the plan because it was not in control of its customers emissions, and because an analysis it was currently undergoing was based on a different framework.

“Scope 3 emissions are primarily the emissions of our customers, mainly steel makers in China, over which we have very limited control.”

The emissions resolution was submitted by Melbourne-based non-profit Market Forces, acting as agent for 109 shareholders who hold approximately 0.02 percent of the Australian listing.

“By recommending shareholders vote against this resolution, Rio Tinto has failed to take the opportunity to assure shareholders that its new emission reduction targets will be entirely consistent with the climate goals set out in the Paris Agreement,” Will van de Pol at Market Forces told Reuters.

Rio said its current analysis was based on “less than 2 degrees”, reflecting a scenario for sustainable development from the International Energy Agency, and that it would release targets and strategies on how to meet them in 2020.

Rio is among Australia’s top five carbon emitters, according to combined data from the Clean Energy Regulator.

The miner said it produced 28.6 million tonnes of scope 1 and 2 emissions last year, and 536.0 million tonnes of Scope 3 emissions, but that it was on track to beat a target of reducing its emissions intensity by 24 percent from 2008 levels by 2020.

(Reporting by Melanie Burton)

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