Rio Tinto: An Analysis of Governance and Sustainability Strategies

This report provides an in-depth analysis of Rio Tinto's approach to governance and sustainability. It examines the company's organizational background, highlighting its commitment to sustainable development, safety, and stakeholder management. The discussion covers Rio Tinto's stakeholder engagement, including its Sustainability Committee's role in overseeing health, safety, environmental, and community practices. The report details the company's business structure, focusing on its diverse operations and product offerings. It also presents key performance indicators from 2016, such as investments in community programs, injury frequency rates, and greenhouse gas emission reductions. The conclusion summarizes Rio Tinto's dedication to sustainable development, emphasizing its commitment to responsible business practices, environmental considerations, and community well-being. The report also includes a comprehensive list of references and bibliography for further research.

Running head: GOVERNANCE AND SUSTAINABILITY
Governance and Sustainability
Name of the Student
Name of the University
Author note

1
GOVERNANCE AND SUSTAINABILITY
Table of Contents
Introduction......................................................................................................................................2
Discussion........................................................................................................................................2
Conclusion.......................................................................................................................................6
References and Bibliography...........................................................................................................8

2
GOVERNANCE AND SUSTAINABILITY
Introduction
Rio Tinto Limited is an Australian organization, producing minerals and metals which
are extremely important for human progress. Rio Tinto has extreme belief in contributing for
sustainable development by production of materials that are vital for the world around in a
socially responsible way. They share the profits of their business and reduces any kind of
negative effect on people, the environment and the communities. Rio Tinto is committed towards
operations of their business with complete respect and consideration towards the health and
safety of their people, their communities, and the risks and responsibilities related with the
regional and international environment. With the help of partnership agreements, Rio Tinto
works with affected communities for sharing the wealth their operations generate and direct
funds where they are required most. Participation in industry organizations happen for helping to
drive change and set up sustainability benchmarks which represent the different societal
expectations and challenges. Partnerships with non-governmental organizations are there for
helping in better understanding and meeting the requirements of the stakeholders. Their approach
towards sustainable development gets directed by their international code of conduct for business
“The way we work” and get reinforced by their health, safety and environmental policies
(Riotinto.com 2017).
Discussion
Organizational background
The contribution to sustainable development at Rio Tinto allows them to run their
operations, all the while upholding the appropriate associations with their many stakeholders.
This contribution allows the organization in looking to the long term and even planning and

3
GOVERNANCE AND SUSTAINABILITY
running the future operations. It assists them in securing new deposits and then converting those
into new mines and some other facilities, which drive value for their business and their
stakeholders. At Rio Tinto, safety is of topmost priority and has been so for more than 140 years
and their ambition is defined (Riotinto.com 2016). They are focused on creating an environment
that is safe and where everyone is safe at home at all time. The safety culture within the
organization is strong, with safety being the core value embedded in the minds of all employees
and contractors across all the different operations and all the different areas. In this industry and
specifically in Rio Tinto, partnerships are vital. With just one license for operating, they make
sure they are having the appropriate relationship and the right amount of trust among themselves
and in the communities, with employees, governments and suppliers. In their industry, they have
found that climate change is one of the long-term challenges that they face and are preparing to
respond to (Flitton 2016). They are also attempting to better their carbon footprint by means of a
clear focus on energy sufficiency. They are even creating a series of carbon pricing situations for
informing their decisions, which includes capital expenditure. At Rio Tinto, passionate and
proud people are working for Rio Tinto, making the workforce capable and professional. With a
strong culture, the value set is the same everywhere and safety is given the top priority. Not just
the employees are proud of working for Rio Tinto, they are even proud of supplying the main
metals and minerals necessary for the modern society. Rio Tinto puts absolute importance on
diversity and inclusion for their future. The main aspects of diversity given importance are
gender, nationality and millennials. Not just diversity, inclusion is what is important. It is to
make sure they make the most of the wide group of people for finding solutions to difficult
problems. What the organization is concerned about is developing people from the local

4
GOVERNANCE AND SUSTAINABILITY
communities in which they operate so that they can ensure a sustainable license of operating in
those areas (Kruesman 2013).
Stakeholder management
At Rio Tinto, they are committed towards the operations of their business responsibly, in
the context of health and safety of their people, their local communities and the associated risks
and responsibilities with the local and global environment. On a local level, they take care of
issues like water supply, while balancing the needs of their operations with the requirements of
their local communities. Like other organizations, they also face larger, global issues like the
evolution to low carbon energy systems and climate change (Rühmkorf 2015). The company has
a separate Sustainability Committee that is focused on reviewing and advising regarding the
efficiency of the company’ s practices, policies and programmes related to health, safety,
security, environment, communities and sustainability. They possess oversight regarding the
major sustainability issues and uncertainties, all the while ensuring they are being clear with their
stakeholders regarding the areas they are responsible for as a Committee. The Committee takes
care of extensive reviewing of major risks and exposures on a revolving basis. In 2016, their
reviews were concentrated on underground safety, water and tailings management, and process
safety. They also take care of the reviews related to water, energy, biodiversity and climate
change. The committee meets at least four times every year and visits their different sites. Site
visits are taken very seriously and when they are on visiting they take up a hands-on role in
confirming the sustainability performance of the operations and even provides advice and
motivation to the local teams. Many thousands of men and women are working hard at Rio Tinto
every day for producing metals and minerals which are necessary for human development (Eaton
2016). The people make a constructive difference both at the international level and with local

5
GOVERNANCE AND SUSTAINABILITY
communities. Rio Tinto has a wide comprehension of the regular operational risks the workers
face every day and their Sustainability Committee offers their support and help in managing of
the mitigation of those risks. Moreover, they have an accountability of being an agent of
constructive change, helping this industry in eliminating fatalities and displaying leadership on
the benchmark levels they set.
The Sustainability Committee
The Sustainability Committee at Rio Tinto focuses on the following areas:
 Monitoring the commitment levels of the management towards the systems, behaviour
and processes necessary for the standards and policies within their scope.
 Ensuring local and international sustainability associated risk gets properly understood
and considered within the company’s risk profile.
 Annually reviewing sustainability targets and the metrics used for analyzing them.
 Reviewing the performance of Rio Tinto against those targets (Yakovleva 2017).
The business
Rio Tinto Group is a dual listed company that is structured as a single economic entity
formed from the combination of Rio Tinto PLC from London and Rio Tinto Limited from
Australia. The interests of this Group are both geographically and product-wise diverse. Majority
of the company’s resources are in North America and Australia. They have operations in Asia,
Europe and Africa too (Riotinto.com 2017). Their business comprises of mills, open pits and
underground mines, smelters and refineries, along with technology, exploration and service
facilities. Their products assist in helping the fulfillment of important customers requirements
and improving the living standards of people. Their operations and closing of their operations are

6
GOVERNANCE AND SUSTAINABILITY
both done responsibly, safely and sustainably. Long term approaches are taken for their business.
It implies the development of first class orebodies into long-term, large and effective operations
and development and application of new technologies at their mines, smelters and refineries.
Because of that, their operations have the capability of sustaining competitive advantage across
business cycles. The Group pursues prospects for cost reductions, prudent growth and
productivity improvements. Their business policies, principles and standards express their values
of teamwork, respect, safety, excellence and integrity. These values reinforce the process in
which they take care of the social, economic and environmental influences of their operations
and how they are governing their business. The life cycle of the business stretches across the
exploration, development, operation and closure of their assets, how the minerals and metal
products are marketed, and the legacy that is left at the completion of an assets economic life.
With the help of their risk management framework, every phase contains the sustainable
development considerations (Roeder 2016).
2016 for Rio Tinto
In 2016, Rio Tinto spent US $166 million on community programmes. Their direct
economic contribution all over the globe was US $35.1 billion. The company saw a 34%
decrease in their overall injury frequency rate (per 200000 hours toiled) over the last 5 years. The
year also saw a 25.9% reduction the emission intensity of their greenhouse gas since 2008. With
Australia, the US and Madagascar, three new community agreements were signed by Rio Tinto
Group. 2016 saw just one fatality at managed operations, with the AIFR remaining same as 2015
(Riotinto.com 2016).

7
GOVERNANCE AND SUSTAINABILITY
Conclusion
This sustainability report of Rio Tinto is presenting a complete overview of the
company’s contributions to global and local sustainable development. There is commentary and
additional data regarding the performance of the Group in 2016. It has been found from the
discussion of sustainability at Rio Tinto that they have extreme belief in contributing for
sustainable development by production of materials that are vital for the world around in a
socially responsible way. Rio Tinto is committed towards operations of their business with
complete respect and consideration towards the health and safety of their people, their
communities, and the risks and responsibilities related with the regional and international
environment.

8
GOVERNANCE AND SUSTAINABILITY
References and Bibliography
Eaton, C., 2016. Building social license to operate through community engagement: the WUSC-
Rio Tinto Alcan partnership in Ghana. Field Actions Science Reports. The journal of field
actions, (Special Issue 14).
Flitton, D. 2016. Rio Tinto's billion-dollar mess: 'unprincipled, shameful and evil'. [online] The
Sydney Morning Herald. Available at: http://www.smh.com.au/world/billiondollar-mess-a-
major-disaster-the-people-do-not-deserve-to-have-20160817-gquzli.html [Accessed 21 Sep.
2017].
Hilson, G., 2012. Corporate Social Responsibility in the extractive industries: Experiences from
developing countries. Resources Policy, 37(2), pp.131-137.
Kruesman, M., 2013. Digging for compliments: Rio Tinto Group, corporate social responsibility
and the diffusion of international norms. The London School of Economics and Political Science.
Owen, J.R. and Kemp, D., 2013. Social licence and mining: A critical perspective. Resources
Policy, 38(1), pp.29-35.
Riotinto.com. 2016. Partnering for progress. [online] Available at:
http://www.riotinto.com/documents/RT_SD2016.pdf [Accessed 21 Sep. 2017].
Riotinto.com. 2017. About us. [online] Available at: http://www.riotinto.com/about-us-108.aspx
[Accessed 21 Sep. 2017].
Riotinto.com. 2017. Sustainable development. [online] Available at:
http://www.riotinto.com/australia/pilbara/sustainable-development-9604.aspx [Accessed 21 Sep.
2017].

9
GOVERNANCE AND SUSTAINABILITY
Roeder, R.W., 2016. Foreign Mining Investment Law. Springer Verlag.
Rühmkorf, A., 2015. Corporate social responsibility, private law and global supply chains.
Edward Elgar Publishing.
Slack, K., 2012. Mission impossible?: Adopting a CSR-based business model for extractive
industries in developing countries. Resources Policy, 37(2), pp.179-184.
Yakovleva, N., 2017. Corporate social responsibility in the mining industries. Routledge.