Background In 2021 Rio Tinto Group launched a new business strategy focused on low-carbon transition. At Rio Tinto’s annual general meeting held in April 2022, investment management firm Sarasin & Partners voted against the 2021 company’s financial statements 1 due to its lack of disclosures on actions to align with a 1.5°C temperature resilience target and the related financial implications (i.e., net zero accounting disclosures). Rio Tinto is a significant emitter of greenhouse gas emissions with large Scope 3 emissions.

Specific Requirements Assume you are a business consultant, reporting to the Board of Directors of Rio Tinto, the world’s second-largest metals and mining corporation. Rio Tinto Group is a dual-listed company traded on the London Stock Exchange (trading as Rio Tinto Plc) and the Australian Securities Exchange (trading as Rio Tinto Ltd). You have been contracted to provide a business report to Rio Tinto’s Board of Directors which:

Provides recommendations to Rio Tinto on how to address Sarasin & Partners’ criticisms of its net zero accounting disclosures. 

Hint: You may refer to the net zero accounting disclosures (particularly Scope 1, 2, and 3 emission disclosures) of Rio Tinto’s peer firms (e.g., Anglo American, BHP Group, Fortescue Metals Group, and Vale)

Answer rating: 100% (QA)

I recommend that Rio Tinto improve its disclosures in the following areas 1 Rio Tinto should provide ... View the full answer