By Maria Mähl, Partner and Head of USA ESG Solutions, ESG Book
As one of the world’s most carbon-intensive sectors, the steel industry is facing ever-growing pressure to decarbonize. With increasing demand for green steel, new regulations like the EU’s Carbon Border Adjustment Mechanism (CBAM), and increasing expectations from banks, investors, and customers, steel producers are being asked to provide transparent, credible, and verifiable sustainability data. Artificial intelligence (AI) and cloud technologies are emerging as powerful enablers in simplifying sustainability reporting, unlocking efficiencies across the value chain, and supporting the transition to low-carbon steel.
Quantifying the value of green steel
The transition to green steel is not just a technological challenge — it is also an economic one. To make the case for sustainable steel compelling to investors, customers, and regulators, the industry must better quantify and monetize the business case for green steel. This means translating sustainability performance into measurable value, such as reduced regulatory risk, preferential financing, or premium pricing from climate-focused buyers.
AI plays a key role here by helping organizations model the carbon footprint of their operations and estimate the downstream benefits of switching to green steel inputs. For steel producers, this enables clearer storytelling around their decarbonization efforts. For customers, particularly those in sectors like automotive and construction, it provides a way to demonstrate Scope 3 emissions reductions and make more informed procurement decisions.
Decarbonizing the value chain, not just production
While much of the focus on decarbonization has been on production technologies — such as hydrogen-based steelmaking — there is a growing recognition that the entire supply and value chain must be addressed. From mining and material transport to final product delivery, each stage of the steel value chain presents opportunities to reduce emissions.
AI-powered optimization tools are being deployed to reduce inefficiencies in logistics, supply chain management, and transportation, helping companies minimize energy use and emissions beyond the blast furnace. By integrating carbon data into these systems, companies can track the full carbon lifecycle of their steel products, creating a more holistic view of sustainability performance.
Regulatory drivers: CBAM and global pressure
The regulatory environment in the EU is shifting rapidly. CBAM, set to be fully phased in over the coming years, will impose a carbon cost on imported steel, aligning it with the EU Emissions Trading System. This is particularly significant given that 28% of steel consumed in the EU is imported, often from countries with fewer decarbonization requirements. For steelmakers and their global customers, complying with these rules requires accurate, auditable, and harmonized emissions data.
Financial institutions are also under increasing scrutiny to assess climate risks in their lending and investment portfolios. This includes gathering emissions data from financed entities — data that is often incomplete, inconsistent, or unverifiable.
The data challenge: Fragmentation and fatigue
One of the biggest hurdles in sustainability reporting is the fragmented and inefficient way data is collected. Steel producers and their customers are often asked to submit multiple versions of the same data in different formats to various financial institutions, regulators, and partners. This repetitive, manual process not only drains time and resources, but also undermines data quality and consistency.
Moreover, financial institutions now require granular, asset-level emissions data for accurate risk assessment — a level of detail that is both difficult and expensive for companies to gather and maintain.
The role of LEO: A single, AI-powered reporting solution
To address these challenges, platforms like LEO by ESG Book are changing the game. Developed in partnership with Boston Consulting Group (BCG) and built on Google Cloud, LEO is a purpose-built analytics and reporting solution that simplifies sustainability disclosures through AI, standardization, and secure data sharing.
LEO allows companies to report their sustainability data once and securely share it with multiple financial institutions and stakeholders. Its AI-driven interface pre-fills reporting templates using more than 200,000 public disclosures, reducing the burden of manual entry. Organizations can generate tailored reports using BCG-developed modules based on the Climate and Sustainability Data Template, adjusting for their specific sector or organizational context.
With standardized formats and interoperability with global frameworks like the International Sustainability Standards Board (ISSB), LEO ensures that data is both comparable and compliant. This makes it easier for companies — steelmakers included — to meet the information needs of banks, investors, and regulators without duplicating effort.
A strategic advantage for green financing
By simplifying sustainability reporting and improving data accuracy, AI-enabled platforms like LEO not only reduce compliance costs but also unlock access to sustainable finance. Banks and investors seeking to decarbonize their portfolios are increasingly prioritizing companies with transparent, high-quality ESG data. This creates a clear incentive for steel producers and buyers to invest in better data infrastructure.
Furthermore, aligning industry standards — such as the collaborative work ESG Book is doing with banks and associations — helps build a common language across the value chain. This supports a more unified, transparent, and efficient ecosystem for sustainability disclosure.
Toward a more resilient steel sector
In the face of tightening regulation, stakeholder pressure, and the rising cost of carbon, the steel industry must transform how it approaches sustainability reporting. AI and digital platforms offer a scalable path forward — simplifying complexity, improving data integrity, and connecting producers, customers, and financiers in more efficient ways.
As the demand for low-carbon steel accelerates, those who embrace intelligent reporting systems early will not only reduce their administrative burden — they will also position themselves as leaders in a greener, more resilient industrial future.
About the author
Maria Mähl is a sustainability-focused technology leader with over 15 years of experience at the intersection of innovation and climate action. As a four-time founder, she has played a central role in building and scaling companies across diverse sectors, including climate technology, fintech, medtech, and asset management. Her work draws on a background in management consulting, supply chain operations, and product development, shaped by early experience in the automotive and circular sectors. Passionate about the potential of technology to accelerate the shift toward a low-carbon future, Maria focuses on creating solutions that drive meaningful environmental impact. She brings a global perspective to the challenges and opportunities of the climate transition and is active as an advisor, board member, and speaker on these topics.