Disclosure, disclosure, disclosure. The imperative of data transparency to the steel transition

The Climate Group

As the adage goes, you can’t manage what you don’t measure. And if you’re interpreting this to understand emissions data, you can’t reduce what you don’t measure.

This begs the question, how can businesses accurately understand where the emissions in their supply chain happen and therefore, where they need to act? This is the critical role data transparency will play in driving the steel industry’s net zero transition.

Steel supply chains are complex

They can pass through many stages, upstream from the steelmaker all the way downstream to an end user like a carmaker, ship owner, or clean energy provider. For any business, looking to review how much steel they use, where it comes from, and the emissions attached can be daunting.

But achieving data transparency in supply chains is imperative to give businesses the visibility, control, and insight to know where they need to act. It unlocks the tidal wave of potential for corporate leadership to drive the net zero steel transition.

So, to update the adage, we can reduce what we can measure. And we’re working with our SteelZero members to enable this for the entire industry.

Breaking new ground

SteelZero requires members to make a commitment to 100% net zero steel by 2050, at the latest, with an interim commitment to use lower emission steel for 50% of their steel requirement by 2030.

For the very first time, we asked our SteelZero members to take active steps to report on their progress against their 2030 commitment. This has allowed them to understand how much of the steel they use currently meets it.

To do this, we asked our members to review their steel procurement and to source data on how much steel they use, which steelmaker or steel mill of origin they procure from and, most important of all, we asked them to engage their suppliers and request the emissions data and scrap share of the crude steel they bought.

This is core to their SteelZero commitment, which is a crucial initiative bringing together leading demand side companies globally to signal the need for lower emission steel from all markets and all producers. Immediately.

As our reporting methodology becomes more sophisticated, it will become a key tool for driving policy recommendations and incentivising flows of finance to make data collection and sharing mechanisms readily available and compatible across the industry.

The current barriers

This was groundbreaking. For many of our members, this was the first time they’d conducted such an extensive review of their steel procurement. And more importantly, for the first time, our members were making the request for this emissions intensity and scrap share data in an aligned and consistent manner through our reporting framework.

The process was valuable not just for the data it did reveal, but also, for the data it did not. For many steel users, getting hold of data they need to understand the progress of their suppliers in providing lower emission steel to the market remains challenging.

On some occasions, members faced difficulty due to suppliers simply not providing access, or because suppliers did not have the data available at a crude steel level in the format required.

“Mace, along with SteelZero and other leading businesses, chose to be at the forefront and develop reporting frameworks together. The accuracy with which we can measure the relative carbon intensity of our materials and the embodied carbon of our structures will allow us to continually challenge designs and manufacturing processes. This is fundamental to understanding where to focus our efforts to meet internal, client, and industry wide decarbonisation targets.”

Adrian Bywaters, Operations Director – Engineering, Mace Group

Providing the methodology

Format is important. We’re breaking new ground in creating the parameters, methodologies, and frameworks through which the industry will achieve transparency on steel emissions data.

By doing so, we’re actively looking to create shared understanding and alignment between steelmakers and steel users. We’re setting expectations on what is required in the industry for emissions data sharing. The request of our members is a clear signal to steelmakers of how the market is shifting towards demanding lower emission steel.

We have a framework. We have the asks. Now we need to see the data from steelmakers.

There’s a unique opportunity for steelmakers to showcase leadership and progress on decarbonisation through disclosing and verifying emissions data and certification of their products. Through monitoring, measuring and reporting, we can achieve real change.

Driving convergence, not just transparency

Through our reporting frameworks, both steel users and steelmakers must operate from the same points of reference and criteria for the collection and reporting of crude steel data.

But our members are also driving common understanding with steelmakers on how to describe lower emission steel, quantified through the thresholds of emissions intensity and scrap share needed to qualify.

Industry-wide alignment on the definition of ‘lower emission’ steel, an understanding of what needs to be procured and what suppliers need to provide, are all critical in driving common understanding across the value chain. There can be no room for interpretation.

“To drive a successful steel transition, we need to design markets that value greener product features, like lower carbon footprints, as a competitive factor. However, these markets need reliable and comparable data to reflect the impacts of products. Our collaboration with SteelZero is key to ensure the implementation of harmonised data requirements to build the transparency needed.”

Maximilian Schnippering, Head of Sustainability – Siemens Gamesa

Conclusion: Forging the path ahead

It’s imperative we achieve data transparency to enable the steel industry’s net zero transition. With collective accountability, we can forge the path to drive down emissions in steelmaking. Fast. Our first reporting process may have revealed the current barriers in place. But it’s revealed where we need to act and emboldened us to drive this for the industry.

We’re committed to work with our SteelZero members, and all steel using businesses, to reduce emissions and show leadership in unlocking the data transparency that will make it possible. We need steelmakers to work with us so that we can break down those barriers, get to work measuring, and they can get to work reducing emissions.

This way we can all drive urgent climate action to drive down emissions in the steel industry and, ultimately, protect our planet for generations to come.

Visit our homepage to find out more about our SteelZero work.

/Public Release. View in full here.