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Monks sells Rio Tinto stake over ESG concerns
Monks Investment Trust, run by Baillie Gifford, has sold its £20 million stake in Rio Tinto over concerns about the mining giant’s environmental and governance practices.
This decision comes after criticism of Baillie Gifford’s own investments in fossil fuel companies, which led the company to withdraw sponsorship from several book festivals.
President of the monks Carlos Sternberg emphasized the fund’s commitment to ESG factors in investment decisions, saying insufficient progress in these areas led to the sale of the Rio Tinto holding company.
In a statement to investors, Mr Sternberg said: “Many shareholders will be aware of the public debate surrounding fossil fuel investments.
“The board and management take their stewardship responsibilities very seriously. Environmental, social and governance (ESG) factors are intrinsically linked to long-term investing.
“The managers incorporate analysis of these factors into their core research when seeking high-quality growth companies. They are supported by a dedicated ESG analyst who assists with the ongoing management of each holding – part of a wider team of over 40 people.
“The goal is not to strive for perfection, but to focus on materiality and direction of travel. Engagement can encourage responsible behavior and meaningful change.”
“The company’s direct investments in businesses with activities related to fossil fuels totaled 2.6%, against 4.8% for the index at the end of the year.”
The fund’s concerns originally stemmed from the destruction of a 46,000-year-old Aboriginal site in 2020 and lingering unease about the company’s culture. Then-CEO Jean-Sebastien Jacques and president Simon Thompson left the mining giant.