ResponsibleSteel™ creates sustainability label for steel
By Dr Alan Knight OBE, ArcelorMittal’s Head of Sustainable Development and Corporate Responsibility
ResponsibleSteel™ is a new initiative to develop and certify steel against a comprehensive environmental and social standard. Initially established as a global initiative in 2015, the non-profit organisation is working to create the first multi-stakeholder standard for the steel industry covering the entire value chain. And this year will see a major step forward when the organisation publishes a second draft of its standard and begins certifying the first steelmaking sites.
The goal of the standard is to reassure customers (and end-consumers) that the steel they use meets the environmental and social standards expected by our key stakeholder groups. As a steel producer, it will allow ArcelorMittal to reassure our own stakeholders that we meet the sustainability expectations of our most demanding customers. Certificates and, where appropriate, labels, will provide the means to pass that reassurance down the value chain to the end customer.
ArcelorMittal, and Australian steelmaker BlueScope, are leading the ResponsibleSteel™ initiative. It grew out of increasing demand from our customers for information about the sustainability and environmental impact of steel production. ResponsibleSteel™ has its roots in similar initiatives which allow the timber and fishing industries to demonstrate the sustainability of their value chains.
The major elements of ResponsibleSteel™ involve multiple stakeholders. This is not a steel standard developed by the steel industry alone. It has been drafted and agreed to by key stakeholder groups including customers such as BMW and Daimler who are members. Other stakeholder groups include finance (HSBC and a commercial bank are members), mining companies, trade unions, and environmental and social groups.
Industry-wide standard creates level playing field for all
In the case of the timber industry, products which meet the standard are stamped with the Forest Stewardship Council (FSC) label. An independent organisation (FSC) ‘owns’ and maintains the standard, ensuring it is widely adopted across the industry. Decisions are made by a group of stakeholders (FSC members) who have equal say.
Customers choose products certified by these bodies because the label is robust. There are agreed standards and inspection practices for example. Discussions between the participants are played out within the organisation rather than in a public forum. After all, everyone is trying to create a level playing field for all participants. It’s become a model for communicating about sustainability proactively and transparently.
To ensure ResponsibleSteel™ achieves a similar level of acceptance as standards for other industries, we are involving businesses from every part of the steel supply chain. That includes steelmakers, steel customers, financial institutions, civil society groups, and associations. In effect any organisation, from anywhere in the world, which has an interest in creating a sustainable steel industry.
The existing membership is truly multi-stakeholder and growing. Members include carmakers (BMW and Daimler), financial institutions (HSBC), raw materials groups, environmental organisations, and steelmakers.
Raw materials covered by mining industry standards
Customers don’t just want to know that their steel is made to an agreed standard, they also want to know where the raw materials originate and the environmental impact of procuring them. That includes, iron ore, coal, zinc, and other alloying elements used in steelmaking. Rather than creating its own standard for raw materials, ResponsibleSteel™ decided to look for similar initiatives from the mining industry itself.
There are two main standards: the Initiative for Responsible Mining Assurance (IRMA) and Towards Sustainable Mining (TSM). ResponsibleSteel™ has signed memorandums of understanding with both and it is likely that IRMA and TSM will both be recognised in the steel industry’s own standard. By coupling ResponsibleSteel™ to either IRMA or TSM, we are creating a global standard which covers all parts of the steel value chain.
Steelmaking certification to begin late 2019
ArcelorMittal has already begun to measure our own coal and iron ore mining resources against TSM and our Mont Wright site in Canada has achieved a high score. Staff at our larger mining sites have also received training in TSM procedures with the view to future certification. As well as producing our own raw materials, ArcelorMittal is one of the world’s biggest buyers of raw materials (by tonnage). By taking the initiative and showing real leadership, we hope other suppliers will be encouraged to become certified.
We anticipate that the certification system for steelmaking sites should be ready by December 2019. ArcelorMittal is already testing some of our sites against the first draft of the ResponsibleSteel™ standard to ensure they will be ready. But will be unable to apply the ResponsibleSteel™ label to our products until more raw material suppliers are certified. This is expected to take longer than certifying steel sites.
A typical ResponsibleSteel™ audit will involve two inspectors and take at least three days, depending on the size of the site. The verification process is much more thorough than any questionnaire or a quick audit. That also makes the ResponsibleSteel™ label robust and thorough.
ResponsibleSteel™ will give steel companies a competitive advantage over producers who operate to much lower standards. That will make steelmaking a race to be the best, rather than a race to be the cheapest.
ResponsibleSteel™ will be a useful standard for project owners and public procurement projects. For large-scale public projects, ResponsibleSteel™ is likely to become a procurement standard which will ensure that public funds are spent responsibly on products which minimise their impact on the environment.
Become part of the community
For ArcelorMittal and our partners, ResponsibleSteel™ represents a major investment of time and energy. That’s led to many questions about why we are involved. But we believe that ResponsibleSteel™ shows the social and environmental leadership that our partners and investors expect.
For our customers, ResponsibleSteel™ will provide the information you need to convince your clients and regulators of the benefits of using steel over other materials. And by joining ResponsibleSteel™, customers, suppliers, and other stakeholders become part of a wider network which can influence the direction the standard takes.
So why not think about becoming a member of ResponsibleSteel™ and being a part of this process? The standard will be realised quicker and better meet your needs if you are involved. We look forward to welcoming you.