Rio Tinto Loses Execs After Breaching Social Licence – Governance Groups

The move comes as investors are demanding increased transparency in how companies manage environmental, social and governance (ESG) risks, said Danielle Welsh-Rose, Aberdeen Standard Investments ESG Investment Director, Asia Pacific.

“The leadership changes at Rio Tinto today are significant in many ways, including showing that investors and other stakeholders will hold companies to account on their ESG performance,” she said.

Rio had been slow to recognise the importance of ESG issues following recent banking scandals in Australia, said Vas Kolesnikoff, Australian head of governance adviser ISS.

“This is the social licence to operate. If you don’t adhere to appropriate conduct and standards you’re going to fall foul of investors,” he said.