A closer look at most active companies, in terms of ESG factors for the week, reveals Environmental progress by Rio Tinto distracting from their social issues in the workplace. Hydrogen continues to emerge as a theme companies are willing to invest in and collaborate to expand their reach
This week, findings on our ESG Safeguard platform exhibited some exciting Clean Technology developments, coupled with negative attention on Rio Tinto (RIO:GB) for workplace misconduct. Green hydrogen was a key focus with two companies expanding their reach in the emerging market, Plug Power (PLUG) and Adani Industries (512599:IN).
The controversial mining company, Rio Tinto unveiled new procedures after a troubling report that surfaced in February indicated widespread sexual harassment in the workplace. The misconduct was a known issue, but this report was based on an internal survey that backed up the past allegations with numbers and metrics. The report revealed that 30% of women and 7% of men had been sexually harrassed in the workplace, plus 21 reported cases of sexual assault. The news arrives just a few short years after the company destroyed a sacred Aboriginal site in Australia during mining operations. It is clear that the company needs to do better in the social and governance aspect despite the progress they are making on the environmental front.
The social failings of Rio Tinto eclipse the environmental strides recently taken to implement renewables into their operations. This week the company has sent out formal RFPs to develop industrial-scale renewables for operations in Queensland, Australia. The operations would primarily focus on aluminum smelting and mining.Rio Tinto is looking to power three facilities there with renewable energy by 2030.
Exploring the other top theme of the week, Plug Power signed a 30 year lease agreement to build a green hydrogen facility in Belgium for the port of Antwerp-Bruges, adding to their growing list of projects. Plug Power, based in Latham, New York, continues to grow their leadership in the space. The company has broken ground on 2 projects in North America this year and 5 more slated for development in the coming years on the continent. Adding the port of Antwerp-Bruges to their list of projects shows the company's global reach and ability to adapt their solutions.
Adani Industries and Total Energies SE (TTE:FR), through a joint-venture agreement, will invest $50B over the next 10 years to develop green hydrogen solutions. India has been a hub for renewable energy development lately with multiple companies pledging capital to expand solar, wind, and hydrogen capabilities in recent months. It has only been a few short months since BlackRock took a stake in Tata Power’s renewable energy division.
Renewable energy and technologies that support it, like green hydrogen, are of paramount importance in the fight against Climate Change. However, it is inexcusable that companies like Rio Tinto have such poor workplace track records when it comes to sexual harassment. No amount of investment into solar and wind changes the fact that companies need to do better for the employees that implement these green initiatives.
While the fight against Climate Change continues to move forward, progress cannot come at the expense of human safety and well-being. It is for this reason that ESG is not only environmentally minded, but also takes a holistic approach to examine the behavior and fortitude of a company.
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This communication does not represent investment advice. Transcript text provided by FACTSET and S&P Global Market Intelligence.
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