Via Financial Times

Anglo American, one of the world’s biggest miners, has moved to head off a clash with shareholders over membership of powerful advocacy groups that engage in lobbying for the fossil fuel industry.

Following discussions with institutional investors, the London-listed group has signed up to a number of commitments that will more clearly align its lobbying activity with the Paris agreement on climate change.

These include a pledge to publish industry association memberships — including fees and its rationale for joining — by its annual meeting in May. It will also set out a process to tackle “misalignments” in policy positions.

In a previous audit of lobby groups, Anglo identified policy differences with the World Coal Association, the Minerals Council of Australia (MCA), the Hydrogen Council, the Fuel Cell and Hydrogen Energy Association and the Northwest Territories Chamber of Mines.

Stephanie Pfeifer, chief executive of the Institutional Investors Group on Climate Change, which is backed by funds with more than $4.7tn under management, welcomed Anglo’s move but said the company must follow through “by meaningfully putting its commitment into practice”.

“Trade bodies must be called to account where they are opposing, impeding or evading the policy required to support decarbonisation and reduce global emissions,” she said. 

Membership of industry groups that engage in obstructive lobbying for the fossil fuel industry has become a flashpoint between investors and natural resources companies. This is especially the case in Australia, where groups such as the MCA are highly influential. 

BHP was hit by a shareholder revolt at its AGM this year, with more than a quarter of votes cast in favour of a resolution — tabled by activist investors — to cut ties with groups such as the MCA.

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These investor groups have said they will pursue the issue with other mining companies, including Anglo and Rio Tinto. They say lobby groups are one of the biggest blocks preventing the transition to a cleaner, greener economy.

“Anglo American has now joined the group of global companies expected to slam the door on trade associations which seek to undermine climate action,” said Anders Schelde, chief investment officer of Danish pension fund, MP Pension.

“This demonstrates that shareholder action works and that those companies who fail to address inconsistencies in their support for the Paris agreement will increasingly be challenged.” 

Anglo believes lobby groups play an important part in helping shape the debate on key issues such as global warming and community engagement.

“Transparency drives trust and we believe in our ability to influence industry associations positively through our participation,” said an Anglo spokesman.

Separately, Anglo on Saturday secured a licence needed to raise the height of the tailings dam at Minas Gerais, its Brazilian iron ore mine.

The award paves the way for the mine — one of the company’s most important assets — to ramp up to its full capacity of 26.5m tonnes a year. Anglo said Minas Rio would now produce 18 to 20m tonnes of iron ore in 2019, up from previous guidance of 16m to 19m.