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Rio Tinto (ASX, LON: RIO), the world’s second largest miner, is recommending shareholders to vote against a resolution requiring the company to release its direct emissions details and strategies on how its greenhouse gas emissions and those of its customers can be cut.
In a letter from chairman Simon Thompson, Rio urged investors to vote against the proposed rule change that would have the miner to put in place transition plans to meet the Paris Agreement’s goal of limiting global warming to 1.5 degrees Celsius (2.7 Fahrenheit).
Options exist for the reduction of these emissions, but the speed, economic viability and ultimate deployment of these technologies lie within the control of our customers, not Rio Tinto — chairman Simon Thompson.
Those proposal would include short-, medium- and long-term targets to reduce scope 1, 2 and 3 greenhouse gas emissions. The company would also have to set detailed strategies to meet the targets in each annual report starting from 2020, according to the tabled 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 buyers of a company’s product. In Rio’s case, Thompson wrote, Scope 3 are “primarily the emissions of our customers, mainly steel makers in China.”
While the company is already undertaking detailed work on an asset-by-asset basis to replace current Scope 1 and 2 emissions reduction targets (which expire in 2020), Rio noted that managing the third kind was difficult because it had “very limited control” over them.
“Options exist for the reduction of these emissions, but the speed, economic viability and ultimate deployment of these technologies lie within the control of our customers, not Rio Tinto,” Thompson said.
Rio Tinto, which released its own climate change report last month, has reduced its emissions-intensity footprint by almost 30% since 2008, which puts the company on track to beat its 2020 targets. Renewable energy continues to be adopted and it is now used to produce almost three-quarters of the electricity the miner uses.
