Rio Tinto faces $84 billion shareholder revolt over membership of the Minerals Council of Australia
Australia’s second biggest miner, Rio Tinto, faces a shareholder revolt over its membership of lobby groups including the Minerals Council of Australia (MCA) and the role it plays in Australia’s climate and energy debate. Global investors worth $84 billion, including the Church of England Pensions Board, have joined together to file a shareholder motion calling on Rio Tinto to rethink its membership of the MCA, NSW Minerals Council and the Queensland Resources Council. Adam Matthews, head of engagement for the Church of England Pensions Board, said Rio’s support of the Paris climate agreement demanded that it not support lobbying that is counter to the agreement’s aims. “For Rio Tinto to be part of the solution to climate change requires consistency in all the company’s activities and from the organisations it supports to lobby on its behalf,” Matthews said. (Guardian)
Sustainable Investment
Investment consultants questioned over climate change backing
Eight out of the world’s top 10 investment consultants or asset managers offering investment advice, including Aon Hewitt and Russell Investments, have not backed a series of recent major climate change initiatives, according to campaign group Preventable Surprises and research group Sustainix, despite the growing importance of the subject to investors. The research examined the signatories of three initiatives — Climate Action 100+, which calls on companies to cut greenhouse gas emissions and improve disclosure and oversight of climate-related risks; the Ceres G20 letter, in which large investors urge politicians to uphold the 2015 Paris climate accord; and the Task Force on Climate-Related Financial Disclosures (TCFD), which is backed by the Financial Stability Board, a body that makes recommendations to the G20. In response investment consultants have said they were taking climate change risk seriously when providing advice to clients and argued that not signing up to those three initiatives did not signal a lack of commitment to the issue. (Financial Times*)
Strategy
Amazon plans to expand into French grocery markets
US e-commerce giant Amazon has announced plans to launch its grocery delivery service in France as part of global ambitions to expand in food retail. Amazon’s purchase of Whole Foods in the US last year has prompted speculation that it could next target the European food and supermarket sector. “(Food) is a strong development axis for Amazon since the launch of our Amazon Fresh offer in the U.S. in September 2016,” Frederic Duval told the Journal du Dimanche, adding that the Whole Foods deal marked a new step in that ambition. Last month Amazon said it would create 2,000 new jobs in France and has also settled a long-running dispute with French tax authorities that had been seeking nearly 200 million euros from the company. (Reuters)
Tax
Benefits of US tax cut not trickling down to workers, says Just Capital
The new Republican tax cut is providing a powerful weapon for the law’s supporters and detractors, as well as investors and analysts, who are mining data on how companies are spending their windfalls in a battle to sway the behaviour of voters and executives alike. Whilst Republicans have credited wage increases and worker bonuses to the tax cut Democrats have focused on companies announcing stock buybacks, showcasing that as evidence the bill is benefiting the rich rather than trickling down to workers. Research conducted by Just Capital has highlighted that shareholders of 90 large corporations – including Home Depot, Pfizer and Capital One – are reaping more of the benefits of the law than workers or consumers. Pay or benefit increases for workers account for 6 percent of the savings those companies report from the law, the group calculates, while job creation accounts for 22 percent. More than half of the money going directly to workers takes the form of one-time bonuses, as opposed to permanent raises or benefits. (NY Times)
Energy
Report: US telecoms industry lags on clean energy
Findings from a report, Clean Energy is Calling by the non-profit Green America, has found that major players in the US telecommunications industry are not doing enough to reduce carbon emissions and make the transition to renewable energy. The organisation reviewed AT&T, Verizon, Sprint and T-Mobile’s commitments on renewable energy and their plans to reduce greenhouse gas emissions. The report reveals that only T-Mobile scored an A grade, recently committing to sourcing 100 percent of its energy needs from renewables by 2021, whilst Verizon received an F in all categories. Telecommunications is a massive industry in the US, and the four companies assessed consume more than 3 million megawatt hours of electricity each year making the issue an important one for the industry with Todd Larsen, who works on corporate engagement at Green America, suggesting that “If companies like Apple and Google can achieve 100 percent clean energy, telecom companies can too.” (Climate Action Programme)
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