Rio Tinto (ASX: RIO), the Anglo-Australian group and one of the world’s largest suppliers of iron ore, is the latest firm in the extractives industry to be under investor pressure to improve its disclosure on carbon emissions and climate risk. The Rio board has just agreed to put a resolution on such disclosure to shareholders next month. It looks as if the ‘Aiming for A’ coalition, the shareholder group behind the resolution, is steadily gaining ground across the industry as a whole. 

Under a feature of U.K. law whereby 100 shareholders with at least 100,000 shares in a company can act in unison to force a board to consider a resolution, the ‘Aiming for A’ coalition has already succeeded in having proposals demanding disclosure on climate risk accepted at oil and gas companies Royal Dutch Shell (NYSE: RDS.A; LON: RDS.B) and BP plc (LON: BP). 

In Rio’s boardroom last week, they voted to endorse such a resolution, and to put it to a vote by both Rio Tinto’s Australian and U.K. shareholders at their next meetings. 

For the last four years – since 2012 - the founding members of ‘Aiming For A’ (who include the Local Authority Pension Fund Forum (LAPFF) and the largest members of Church Investors Group (CIG), CCLA, and Rathbone Greenbank Investments) have been engaging with the 10 largest extractives and utilities companies listed in the U.K. CIG alone brings together institutional investors who collectively manage about $29 billion worth of funds. 

To date, their work has focused on shareholder resolutions demanding “strategic resilience for 2035 and beyond.” 

“There are several reasons why U.K. asset owners and managers came together to support these companies in their preparations for the low-carbon transition. These range from systemic risk management and their collective fiduciary duty to engage in economic transformation, through to amplifying longer-term investor voices and involving ultimate beneficiaries,” says the coalition. 

It works closely with the Principles for Responsible Investment (PRI) and the Global Investor Coalition on Climate Change’s Carbon Asset Risk initiative. The coalition targeted BP and Shell first because they had the largest carbon footprints in the FTSE 100 index. 

Now it is Rio’s turn. On March 2 last week its chairman Jan du Plessis wrote in a letter to shareholders: 

“Rio Tinto plc has received a shareholder requisition requesting the board and shareholders to support a climate change resolution. We set out background to this in Appendix 1 to this document and have set out in Appendix 2 the explanatory statement from the shareholders who have requisitioned the resolution. This is an unusual event, although not unprecedented having been previously adopted by shareholders of other major companies operating in the natural resources sector. 

Your directors are unanimously of the opinion that all of the resolutions to be proposed are in the best?interests of shareholders and of Rio Tinto as a whole. Accordingly, they recommend that you vote in favor of all the resolutions.” (emphasis added) 

But despite the endorsement of the Rio Tinto board, the resolution’s adoption is far from guaranteed: it needs buy-in from at least three-quarters of votes cast to be carried. 

The next few months will be telling: BP’s AGM is in mid April, while Shell and Rio Tinto wait until mid-May for their shareholders to vote. But, even as they wait, the mining industry is preparing for an extended downturn, as Rio Tinto’s CEO Sam Walsh made clear last week when he said 2016 would be even tougher for miners than last year. 

Announcing a change in dividend policy last month, Rio’s chairman Mr. du Plessis said: “With the continuing uncertain outlook, the board believes that maintaining the current progressive dividend policy would constrain the business and act against shareholders’ long-term interest.” 

Rio Tinto is not alone among miners to cancel annual dividends – it follows Glencore (LON: GLEN) and Anglo-American (LON: AAL), for example. But as the extractive industries come under pressure, it seems they may have decided that one way to show shareholders they are still listening, is to react positively to investor groups demanding a changing attitude on climate resilience. 

Dina Medland is an independent writer, editor and commentator with a strong focus on issues around corporate governance, ethics, the workings of the boardroom and sustainable business. She is on the team of contributors to @ForbesEurope and is an ex-Financial Times staff member who has been a regular contributor in recent years. Further details about her background and a portfolio of work – including her commercially sponsored blog ‘Board Talk’ are available on her website http://www.dinamedland.com