By Jen Carson, Head of Industry, Climate Group
Enhancing transparency through reporting
Transparent reporting is crucial for any climate target to be met. However, reporting on Scope 3 emissions that result from activities not owned or controlled by the organisation, continue to be a challenge for steel users, in large part because of the number of partners in the value chain.
As the adage goes, you cannot manage what you cannot measure. Reporting forms a critical area of our work to drive accountability and transparency as well as to track progress from our members towards their 2030 commitment, which requires 50% of their steel requirement by 2030 to be met by lower emission steel.
This year marked a milestone as our members collectively reviewed their steel procurement and the associated environmental impact using our reporting framework for the first time. The key pieces of information they needed to understand their progress were the emissions intensity, in CO2e emissions/tonne crude steel, and the percentage of scrap share input. Crucially, this information was asked for at the crude steel level, ensuring a common reference point for interoperability and comparability between all steel purchased.
Being able to get data from their steel suppliers speaks to the heart of our work and our members’ efforts to reduce emissions from the steel they use. But for many steel users, getting hold of this data remains challenging. The reporting process laid bare the reality of an absence of this data being rigorously measured and shared at the crude steel level on a widescale by steelmakers.
Through our reporting framework, we are looking to shape best practices for responsible and transparent procurement of steel and to unlock the disclosure of crude steel emissions data at scale for the first time. But steel users cannot do it alone.
Working with steelmakers to achieve industry decarbonisation at scale
We need steelmakers to work with us to share the emissions intensity of their crude steel data. With data transparency, there is a unique opportunity for steelmakers to showcase leadership and progress on decarbonisation through disclosing and verifying emissions data and certification of their steel. Through such practices they can transparently showcase progress in supplying increasingly lower and lower emission steel.
And we are committed to help foster collaboration and create alignment along steel supply chains to drive emissions reductions in steelmaking. Because the need for data transparency and alignment on definitions for green steel are interlinked. In our recent commitment framework review, the technical criteria which defines our ‘Lower Emission Steel’ threshold has been updated. Critically, this definition has been aligned with the emissions intensity thresholds required to meet ResponsibleSteel Decarbonisation Progress Level 2.
This way, we have now aligned the procurement requirements of our members with the decarbonisation progress levels steelmakers need to meet to achieve ResponsibleSteel certification. This way, we are helping drive common frames of reference between the supply and demand side for the collection and reporting of crude steel data, which also ensures transparency to demand progress towards net zero steel production and procurement. Increased data transparency and decarbonisation progress are two sides of the same coin – without one we cannot have the other.
This is just the start of the journey
There is of course much more work to be done. While existing data disclosure systems are in place for steel products such as environmental product declarations (EPDs) and life cycle assessments (LCAs), we know that asking for steel emissions intensity and scrap share at the crude steel level on a wide scale is currently more challenging.
The progress we need to make is clear. There needs to be greater understanding both upstream and downstream in steel supply chains on the ‘what’ and ‘how’ for sharing crude steel data, and for greater interoperability between existing and new forms of sharing emissions data.
The role of data transparency in the steel transition is set to only further increase in the coming years. We are committed to drive this so the demand side can play its critical role in speeding up the net zero steel transition. Ultimately, this will enable businesses like our members to accurately measure the environmental impact of the steel they procure and assess their progress towards eliminating scope 3 emissions. Only with this visibility can they do this effectively.
We need all steelmakers to work with us in unlocking access to better data, breaking down barriers, and laser focusing action towards achieving a net zero steel industry. Fast.
