Rio Tinto (NYSE: RIO) which has earned a reputation as one of Australia's largest mining firms, confirmed its withdrawal from the state mining lobby group on Thursday, citing worries that its strategy on coal mine growth was incompatible with the Paris Climate Agreement. Global companies have been pushing for higher emission cuts across their operations to conform with the Paris Agreement to placate regulators and shareholders.
After careful thought, Rio Tinto has decided not to extend its membership with the Queensland Resources Council (QRC) for the fiscal year 2022-2023. Previously, BHP had discontinued its membership in the lobby group in 2020, after the global miner had lobbied against the Greens political party ahead of an election in coal-rich Queensland state.
The Australasian Centre for Corporate Responsibility (ACCR), an investment advisory business, submitted a shareholder motion to suspend Rio Tinto's participation in the resource council in February. While ACCR's shareholder resolution may have prompted Rio Tinto's resignation from the QRC, the firm was under growing pressure from its shareholders to engage in obstructive lobbying by its industry groups.
Furthermore, ACCR added that Rio Tinto has acknowledged that continuous support for the expansion of Queensland's coal and gas industry is not compatible with the Paris Agreement after more than four years of engagement in climate-related lobbying. The Queensland Resources Council (QRC) took advantage of the COVID-19 outbreak to persuade the Queensland government to speed up new coal projects and subsidize new gas infrastructure.