Tuesday 6 April 2021 11:02 am

Retail investors back Rio Tinto climate accountable proposals

Retail investors have backed climate accountable proposals from Rio Tinto, which the miner will vote on this Friday, as accountability is pushed higher on this year’s agenda. 

71.5 per cent of retail investors have called for chairs and CEOs of the mining giant to be held to account on Environments, Social and Governance (ESG) standards, according to Interactive Investor, the UK’s second-largest consumer investment platform.

In the poll of 1,077 consumers, 72.2 per cent backed Rio Tinto introducing ESG measures into its short-term incentive plan.

Stronger ESG standards would boost climate change initiatives, diversity and inclusion and governance of the firm’s cultural heritage management – which is vital following the miner’s costly Jukkan Gorge controversy.

“It’s clear that retail investors want to get more involved on the issues that matter to them and the platform industry should be doing more to make this happen. It is only through strength in numbers that retail investor voices are heard,” CEO of Interactive Investor, Richard Wilson, said.

Seven out of 10 retail investors also support cutting memberships of organisations that lobby against climate action, the poll conducted at the end of March found.

However, 19 per cent of respondents saw no point in voting, believing the motions would be passed anyway, while nine per cent said they would vote against.

ESG

ESG has grown on the business and consumer agenda, as consumers are increasingly aware of the impacts of their spending.

63.9 per cent of retail investors wanted more involvement in decision-making and felt that shareholders should be asked to vote not just on ESG policy and targets, but on key company developments with a significant ESG impact.

“Too few are making use of their votes, and the investment platform industry needs to do a much better job of highlighting the influence that all shareholders can collectively wield. If more private investors voted, the power of their voice would be heard loud and clear,” Wilson continued. 

Last week’s anti-climactic 30 per cent slump of Deliveroo’s first day of trading has shown the importance of ESG concerns, Head of Equity Strategy at Interactive Investor, Lee Wild, said.

“Rio Tinto, and Unilever at its AGM next month, are proactively encouraging votes on this hot topic. But many aren’t, and shareholders, both retail investors and the big institutions, have much more to do if other influential businesses are to follow Rio and Unilever’s example,” Wild added. 

Rio Tinto’s climate positive proposals come as the mining giant was warned by shareholder advisers over the weekend that boardroom penalties for fatalities at its mines are too lenient. 

Newly appointed CEO Jakob Stausholm, who receives a salary of £1.15m, with the potential to earn between £1.15m and £2.3m extra including bonuses, would only lose 8 per cent of his bonus for an on-site death – around £92,000 to £184,000.

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