IIGCC has worked with a group of investors to identify four areas for enhanced policy interventions that would most effectively de-risk and support the transition of the European steel sector.
The steel industry is responsible for 7-9% of global CO2 emissions and around 5% in Europe. Steel is a crucial input to construction, energy infrastructure, machinery, and transport; all strategic sectors that support jobs and economic growth across Europe.
The steel sector’s decarbonisation is essential both for the economy-wide shift to net zero and for the alignment of investment portfolios with the transition. Creating a supportive policy environment for the transition of high emitting sectors is critical for achieving Europe’s commitment to climate neutrality by 2050.
Supporting investor engagement
Investors committed to working towards a net zero and climate resilient future - in line with their fiduciary responsibility to their clients and beneficiaries – see a net zero steel sector as an opportunity for job creation and industrial innovation in Europe.
In this context, the European steel industry is facing a historic, strategic turning point with risks and opportunities ahead. Investors see Europe as well positioned to lead the global transformation of the steel sector. The EU is a large, highly developed economy with generally high-end steel production that can seize the opportunities and show what is possible, paving the way for other regions to follow.
The areas identified and the underpinning recommendations are intended to serve as a resource to support individual investors’ engagement activities in relation to the steel sector. They are intended to provide a reference point for investors to refer to in their economy-wide macro-stewardship activities, direct engagement with policymakers, as well as engagement with companies in the steel sector and value chain.
As a basis for discussion, they are presented as high-level topics that need to be addressed rather than prescriptive next steps. Read more below:
