Steel standards group sees growth in green financing, ESG input sourcing

Industry group ResponsibleSteel said June 23 widespread support for new sustainability standards will boost low-emissions steel demand, encouraging specific financing streams and more stringent raw materials sourcing.

Steel certified by ResponsibleSteel will have to use raw materials meeting its environmental, sustainability and governance (ESG) mining and sourcing criteria, CEO Anne-Claire Howard said in a presentation to the Sustainable Steel Strategies Summit, in association with Steel Times International.

ResponsibleSteel, whose members include steelmaker ArcelorMittal and leading coking coal miner BHP Group, would certify both low-emissions steel and steel with higher carbon intensity with separate classifications, and based on certified steel meeting the raw materials standard, she said.

A standard certifying better-than-average steel production, benchmarked on the pig iron to ferrous scrap ratio, may cover 50% of the market. A smaller part of the market is currently performing at levels meeting the low-emissions draft standard, which is currently under discussion by ResponsibleSteel's members.

"Only one principle of our standard touches on greenhouse gas emissions and climate change, and that is because the whole ESG spectrum is important," Howard said. "We need to talk not only about climate change but also the other impacts steelmaking has."

Members include steel users such as Daimler and BMW, and non-governmental organizations active in climate and ESG areas.

As a "holistic ESG standard," ResponsibleSteel believes its standard can be applied globally by recognizing existing quality assurance standards and taking them "one step further," Howard said.

Steel making consumes 10% of global coal production, and 93% of all metals produced annually, including iron ore, manganese, nickel and tin.

Steel markets are showing signs of moving toward using references and standards developed to measure carbon emissions and audit ESG performance, with niches emerging, according to steel and mining companies.

The group is working with buyer groups to create demand for certified steel to support the industry's transformation, Howard said.

"ResponsibleSteel is also creating value by working with public procurement trying to design specifications that will encompass the ResponsibleSteel standard," Howard said. "We believe transition finance and green finance is only going to increase, and having the ResponsibleSteel stamp will enable companies to access financing in the future."

ResponsibleSteel expects certification in steel may increase value and demand for compliant products, expecting short-term targets to help drive greater usage of ferrous scrap and low-emissions steel routes to increase low-emissions steel supply.