Baillie Gifford-run trust ditches £20m Rio Tinto stake over ESG concerns

An investment trust run by Scottish asset manager Baillie Gifford has ditched its £20m stake in Rio Tinto, calling out the mining giant for inadequate ESG practices.

FTSE 250-listed Monks Investment Trust name-checked Rio Tinto as it pledged to offload shares in firms making insufficient progress on environmental, social and governance factors.

Karl Sternberg, chair of Monks, said “concerns regarding governance and the approach to environmental impact” had not been “adequately addressed” by the world’s second-largest mining group.

Monks first expressed concerns over Rio Tinto after it bulldozed a 46,000-year-old sacred Aboriginal site in Western Australia in 2020. The scandal triggered the exit of both Rio Tinto’s chief executive and chair.

Malcolm MacColl, Monks’ co-manager, said on Tuesday that he was “quite unimpressed” by Rio Tinto and that its culture “made us a little bit uneasy”.

As of 31 October 2023, Monks held a £20.5m stake in Rio Tinto, worth 0.8 per cent of its total assets. This holding was down from £35.6m last April. The trust manages more than £2bn worth of global shares.

The news comes after Baillie Gifford cancelled all of its remaining literary festival sponsorships last month after ending its deal with the Edinburgh International Book Festival at the end of May.

The company, which manages roughly £230bn, has faced criticism for its investments in fossil fuels and businesses benefiting from Israel’s occupation of Palestine.

Baillie Gifford said in May that only two per cent of its investment was in fossil fuel companies, compared to five per cent invested in companies dedicated to renewable energy.

“The suggestion that Baillie Gifford is a large investor in the Occupied Palestinian Territories is seriously misleading,” it added

Rio Tinto declined to comment when approached by City A.M.