Rio Tinto’s destruction of the sacred Juukan Gorge caves in Western Australia in May 2020 revealed significant corporate governance failings at Rio Tinto. There were no clear direct financial consequences, stakeholders were left vulnerable to a public backlash as a result of governance controversy . A fully integrated
ESG
approach enables investors to mitigate these ex-financial risks, such as Rio Tinto’s weak management of its community relations. Cameron Hume describe how it is possible to mitigate such risks within global fixed income allocations by taking a diversified, risk-based approach to portfolio construction and analysis.
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