A coalition of investors representing $55 trillion in assets has set out a plan of action for the steel industry in a bid to accelerate the so-called transition to net zero in the sector.
The group of investors –signatories of the Climate Action 100+ initiative including AP Funds and the Church of England Pensions Board – said the steel sector must follow the strategy to align with goals laid out by the Paris Agreement.
The campaign is being coordinated by the Institutional Investors Group on Climate Change (IIGCC), which highlighted that steel emissions account for 9% of total global emissions.
According to the group, it is “technically” feasible to decarbonise steel by 2050, but the industry is not on track to meet the International Energy Agency’s target by 2050.
Net zero by 2050 in the steel industry will only be achieved if multiple actions are pursued across the value chain, IIGCC said.
John Howchin, secretary general of the council on ethics at AP Funds, said: “Business as usual is no longer acceptable, considering the decarbonisation challenges that these sectors face. The need for different short, mid and long-term technical solutions is huge, but these need to be accompanied by interim actions that demonstrate real progress by companies.
“The steel sector is a particularly important one – and it is now moving – but there remains a lot of work to do. As owners of these companies, we are focused on accelerating the pace of this work and supporting those committed to taking action.”
Among the actions proposed to decarbonise the steel industry are the usage of emerging technologies, setting short and long-term goals, and implementing transparent policies.
IIGCC said there is willingness from the steel industry to start transitioning towards net zero. Nine companies representing around 20% of global steel production, including the five largest producers, have set made net zero emissions pledges, but these companies are concentrated in Europe and Asia the groups said.
The organisation is also spearheading a seperate campaign calling for new corporate governance measures that would allow shareholders to hold companies to account over their net zero emissions goals. Directors unable to demonstrate credible decarbonisation plans with clear targets will be voted out, it was warned.
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