ResponsibleSteel has agreed a memorandum of understanding with the Sustainable STEEL Principles Association (SSPA) that will facilitate the financing of technological breakthroughs and accelerate decarbonisation, says ResponsibleSteel.
The Sustainable Steel Principles (SSP) provide a framework for banks to assess the decarbonisation of the steel companies within their portfolios, as well as the climate alignment of their steel lending portfolio. ResponsibleSteel meanwhile provides an international standard for steel sites to be certified against.
Pragmatic, global solutions to tackle emissions will not be possible “without a radical step change in how we finance these breakthroughs so industries like steel can decarbonise rapidly and be a force for good”, ResponsibleSteel chief executive Annie Heaton says in a note sent to Kallanish.
“The MoU between the SSPA and ResponsibleSteel signifies a continued determination by banks, the steel industry and wider stakeholders to achieve real progress towards net zero by 2050, and all the complexities which that entails,” she adds.
Amid the proliferation of initiatives now focusing on steel decarbonisation, this MoU also signals a clear recognition that more work must be done to avoid a divergence of standards and work towards alignment, ResponsibleSteel comments.
Erik van Doezum, Global Steel Lead at ING and Chair of the SSP says: “The decarbonisation of the steel sector globally requires significant investments to be made, and financing will be needed to facilitate these. Banks, therefore, will have to identify high-quality decarbonisation business plans, allowing them to guide their assets into investments compatible with a 1.5C future. Building consistent and transparent data via reporting requirements for the steel sector will be paramount to facilitating financing for the decarbonisation of the sector. This will enable all parties – steelmakers, lenders and other stakeholders – to use and understand common measures of progress.”
ResponsibleSteel is also setting up a Finance Working Group (FWG) with key voices from the steel industry, global finance, investment and civil society. Its goal will be to facilitate dialogue including benchmarking carbon requirements within the ResponsibleSteel Standard and certification programme in order to facilitate capital flows to meet decarbonisation requirements. The initial round of discussions will start this month and the FWG hopes to report on its recommendations by December 2023.
Adam Smith Poland
