Rio Tinto (“Rio”) is one of the three largest players in the mining industry. Rio operates four business units that focus on finding, mining, processing and marketing: (i) Aluminum; (ii) Iron Ore; (iii) Copper & Diamonds; and (iv) Energy & Minerals. Rio is at the crossroads of the climate change crisis: it consumes a significant amount of energy in its operations and it also produces energy.
Rio is threatened by climate change in numerous ways and it is working to mitigate these threats through changes in operations.
Severe weather and water management. From exploration through closure of a mine, water is required in each stage of Rio’s business. Unfortunately, climate change has created conflict over the allocation of water. All geographies require water for consumption and food production and severe weather conditions have created long periods of drought as well as the melting of glaciers. These conditions are pushing the global population down a path where the overall demand for water is expected to outstrip supply by 40% in 2030 1.
Rio’s reliance on water puts it at risk from tightening water regulations and/or lack of supply. As a result, Rio has created a water strategy to manage water risk and water performance via key performance indicators (KPIs) through 2018. As of 2015, 60% of Rio’s water performance targets were on track to meet their 2018 goal.2 Further Rio is using hydropower wherever possible and at this point, the majority of electricity Rio uses in aluminum production is from hydropower (~55%).3
Greenhouse gas emission. Carbon dioxide, nitrous oxide, oxides of sulphur, and fluoride gas are all types of greenhouse gases (“GHG”) that Rio emits via its operations. Given GHG emissions critical role in warming the Earth, companies that emit vast quantities of GHG have come under scrutiny from governments, regulators and the public over the past 10-20 years. Most recently, the Paris Agreement, which was reached in December 2016 between 195 countries and goes into legal effect on Friday, November 4, 2016, has the goal of bringing the world’s warming to below 2 degrees Celsius above pre-industrial levels by 2030 while striving for a 1.5 degree limit.4 To achieve this goal, the countries party to the Paris Agreement will agree to a reduction in annual GHG emissions.
Since Rio’s business is energy intensive it is at risk for regulations of GHG emission. Rio is tackling this issue head on and in 2008 set a target of ten percent reduction in total GHG emissions intensity to be achieved by 2015. Rio not only outperformed that goal (achieved a 21.1% reduction) but also significantly reduced total carbon dioxide equivalent emissions by 37% in that same period (from 49.4 million tons to 31.3 million tons).2 In addition, Rio has recently taken two steps to cement its commitment to action on climate change. First, Rio developed a Climate Change Position Statement in 2012 that lays out the company-wide goal of substantial decarbonization of the business by 2050. Rio plans to achieve this by leveraging new technologies, working with suppliers and engaging in policy debates.5 Most recently, in 2015, Rio signed the Paris Pledge for Action which is the non-government party stakeholders support for the Paris Agreement on climate change.3
Despite the significant threats to its business, Rio seems to be handling the issues well by implementing the right restrictions and metrics and working with the right parties to make progress. Their focus on water management and GHG emissions is aligned with the broader effort to stem climate change. Further, there are opportunities for Rio to further help the mitigation process and benefit financially by selling product that emit less carbon for use in everyday life such as aluminum for production of lighter vehicles that uses less gas and copper for smart technologies, renewable energies and electronic cars.3 Ultimately Rio has taken significant steps to align its operations with the goal of reducing climate change and it will continue to do so in the future through changing operations as well as selling more energy efficient products.
 Source: Giulio Boccaletti, Sudeep Maitra, and Martin Stuchtey, “Transforming Water Economies,” McKinsey & Company, 2012, p. 1 https://www.mckinsey.com/~/media/McKinsey/dotcom/client_service/Sustainability/PDFs/McK%20on%20SRP/SRP_09 _Water.ashx, accessed November 2016.
 Source: company website: http://www.riotinto.com/documents/RT_SD2015_Environment.pdf, accessed November 2016.
 Source: company website: http://www.riotinto.com/ourcommitment/spotlight-18130_18280.aspx, accessed November 2016.
 Source: https://www.washingtonpost.com/news/energy-environment/wp/2016/11/03/the-world-is-racing-to-stop-climate-change-but-the-math-still-doesnt-add-up/?utm_term=.0bee3596ee9d, accessed November 2016.
 Source: company website: http://www.riotinto.com/documents/ReportsPublications/corpPub_ClimatePosition.pdf, accessed November 2016.