Rio Tinto engages with investor and civil society organisations on enhanced advocacy approach
April 05 2023 - 2:00AM
Business Wire
In the lead up to its Annual General Meetings, Rio Tinto is
engaging with investor and civil society organisations on an
enhanced approach to advocacy to support the decarbonisation of its
operations, in line with the goals of the Paris Agreement.
The discussions have highlighted the need for greater
transparency and conversation on the critical role of government
policy signals in decarbonisation by creating the right framework
for change in hard to abate industrial value chains, coupled with
real business action and societal shifts.
Rio Tinto put the low carbon transition at the heart of its
business strategy in 2021, setting a clear pathway to provide the
materials the world needs for the energy transition and ambitious
targets to decarbonise its business.
Rio Tinto’s enhanced climate advocacy approach will include
publishing briefing papers on specific assets and emission sources
this year, detailing how the right policy-settings can support its
Scope 1 and 2 emissions targets, which are aligned with the goal of
limiting global warming to 1.5°C, as well as decarbonising the
wider value chain. Rio Tinto will engage with the Australasian
Centre for Corporate Responsibility during the development of these
briefing papers, particularly on the detail included on the
identified policy-settings.
Notes to editors
Summary of Rio Tinto’s positions on climate change policy:
- We agree with the mainstream climate science published by the
Intergovernmental Panel on Climate Change. We support the Glasgow
Climate Pact, in which governments resolved to pursue efforts to
limit the global temperature increase to 1.5°C that “requires
rapid, deep and sustained reductions in global greenhouse gas
emissions, including reducing global carbon dioxide emissions by
45% by 2030 relative to the 2010 level and to net zero around
mid-century, as well as deep reductions in other greenhouse gases”.
Consequently, we do not advocate for policies that undermine the
Paris Agreement or discount Nationally Determined Contributions
(NDCs).
- Business has a vital role in addressing and managing the risks
and uncertainties of climate change and driving emissions to net
zero. A range of policy measures is necessary to support the early
movers in our sector that innovate and deploy low-carbon
technology. Our policy principles provide a common architecture for
the positions we take in different jurisdictions – policy should be
effective, fair, pragmatic, market-based and support free
trade.
- A market-based price on carbon is the most effective way to
incentivise the private sector to make low-carbon investments and
drive down emissions. Based on our current assumptions, carbon
prices below $100 /tCO2e may be enough for us to decarbonise power
and support our investment in renewable generation and firming
infrastructure. Higher carbon prices and other forms of support are
necessary to address harder-to-abate parts of our carbon footprint,
such as process heat and carbon anodes, and remain commercially
competitive in a global market.
- Minerals and metals are globally traded, so effective climate
policy should incentivise the private sector to invest in
low-carbon technology without undermining the competitiveness of
trade-exposed industries and shifting production, jobs and supply
chains to countries with lower emissions standards (carbon
leakage). If there is significant regional variation in carbon
prices, carbon border adjustment mechanisms (CBAM), or alternative
policies, are necessary to limit leakage, provided they can be
executed pragmatically and effectively.
- Carbon pricing, on its own, might not be sufficient to
transform the metals sector. Other policy tools are necessary to
tackle emissions and simultaneously achieve objectives related to
industrial policy. These can include: – grant funding, tax
incentives and investment incentives to support R&D, innovation
and first-of-a-kind projects – product standards and procurement
obligations (such as minimum and rising requirements for low or
zero carbon metal) that drive deployment of pre-commercial
technology.
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