The financial sector is doing “almost nothing” to prevent investments in new metallurgical coal mines and coal-consuming blast furnaces in steelmaking infrastructure, according to new research from France-based NGO Reclaim Finance. Due to its reliance on metallurgical coal, the steel sector produces 11% of global CO2 emissions, making it the largest industrial emitter of carbon emissions. Decarbonising the steel sector therefore is critical to achieving the 1.5°C target. But a review by Reclaim Finance of the practices of 150 banks, insurers and investors in the steel and metallurgical coal sector has found while some investors are engaging companies in both sectors, only banks have policy commitments. Further, none of the 60 banks covered in its analysis seem to have adopted a sector policy related to steelmaking companies, but four banks have committed to restrict their financial services to metallurgical coal. Sixteen out of the 60 banks have adopted a steel decarbonisation target. The research also found that none of the analysed financial institutions use both absolute and intensity metrics in their steel decarbonisation targets as recommended by the UN High-Level Expert Group on net zero, and no financial institution is currently targeting steel Scope 3 emissions, even though these may account for more than a quarter of total emissions of the sector.
🔴 Finance still has very weak commitments on steel.
Yet, due to its reliance on metallurgical coal, the steel industry is the largest industrial emitter of CO2.
A quick overview of financial institutions' (lack ok) commitments 🧵⬇️https://t.co/bmzthgZq7S
— Reclaim Finance (@ReclaimFinance) August 23, 2023