The issue

Over the past two years, we have been engaging with Iluka's sustainability team to express our concerns around the absence of emission targets.  In 2021/22 part of the conversation was on the company's business model transition to become an enabler of the energy transition through the construction of Eneabba. This is the first Australian fully integrated rare earth refinery, partly funded by a A$1.25b loan from the Federal Government’s Critical Minerals Loan Facility. Rare earths produced by the refinery will be used in permanent magnets critical for wind turbines and Electric vehicles (EVs).
Because we were very supportive of this business model transformation and the company's commitment to progress their climate work we decided to make an exception to our climate voting policy and not vote against directors on this basis.
However, during our pre-AGM meeting in 2023, it became clear that the company would not be in a position to announce new emissions reduction targets. Over the last twelve months, the company had undertaken a firm-wide review of potential short and medium-term decarbonisation projects and ranked those options but did not feel comfortable announcing reduction targets. The company indicated that they are still doing more work around the viability of options and will continue to work towards potential commitments in the future. 
While we are supportive of the company’s decarbonisation journey and repositioning of the business to a low carbon economy, we also encourage companies to pursue more ambitious emission reduction targets and decarbonisation strategies. 

The outcome

At ILU’s 2023 AGM, we decided to vote against in relation to the election of a director noting our concerns on the lack of emission reduction targets. We will continue to engage with ILU to develop their emission goals and ESG disclosure. All resolutions were passed in the meeting.