We at worldsteel perform materiality assessments to identify the industry’s most important sustainability issues and to prioritise them based on relevance to stakeholders and impact on society.
This process ensures that the steel industry’s sustainability reporting remains relevant and meaningful to its stakeholders and society.
Our latest materiality assesment confirmed that the following seven focus areas are key topics that our stakeholders want to know more about and to know what we are doing about them.
Customers and investors are increasingly asking questions about what a company’s climate strategy is, how to ensure that no conflict minerals are used in the production process, how to ensure there is no child labour associated with scrap recovery, what solutions are in place to reduce net water consumption and pollution. The list goes on.
The questions are becoming more frequent and more specific. Are we ready to answer to those questions?
We should be. As an industry, we recognise the growing interest and need of our stakeholders to have more information on these key topics and interactive dialogue with the industry.
These issues, and how to communicate on them, were intensively discussed during our recent members meeting on Sustainability Reporting. We can definitely say that our members are on board to address these topics.
The steel industry’s journey towards responsibility in its supply chain
To respond to our stakeholders’ needs, last year we started an in-depth study looking into the steel supply chain. This project mapped 17 Environmental, Social and Governance (ESG) analytical criteria, and applied them to the 30 most important material inputs in the global steel production supply chain.
An ESG country matrix, which is designed to be used in conjunction with the material matrix, assesses the level of risk for responsible sourcing by country.
These matrices, which will be updated on a regular basis to ensure relevance for the industry, were developed to identify hotspots to help steel producers to identify where the greatest areas of concern lie for them and where actions need to be taken to mitigate their risks.
This ultimately enables steel producers to establish a sustainable supply chain management in their company and to identify potential opportunities for positive action that can be taken by the global industry.
The next steps are to develop a globally suitable and applicable supply chain due diligence guide for the steel industry, following the OECD due diligence guidelines.
The good news is that worldsteel’s recent review of steel producers’ sustainability reports reveals that many steel producers are already ahead of the game in their business practice.
The review finds that 25 out of 31 steel producing companies that were reviewed have a code for responsible sourcing in place and the topic of supply chain is covered in depth in their reporting, so they are well on their way to address this topic.
We will work with our other members to help bring them up to this same standard.
The sky is the limit. Our ambition is that every member of worldsteel addresses responsible sourcing and has a sustainable supply chain management system in place. Not to mention, that every one of them incorporates this into their daily business practices.