NEW YORK, Sept. 23, 2022 /PRNewswire/ -- Under RMI's leadership, six top lenders to the global steel sector — Citi, Crédit Agricole CIB, ING, Societe Generale, Standard Chartered and UniCredit — today announced the signing of the Sustainable STEEL Principles (SSP), the first climate-aligned finance agreement for lenders to the steel industry.
Under RMI's leadership, six top lenders to the global steel sector announce signing of the Sustainable STEEL Principles.
The SSP are the turn-key solution for measuring and disclosing the 1.5°C alignment of steel lending portfolios. Designed to support the practical achievement of net-zero emissions in the steel industry, they also provide the tools necessary for client engagement and advocacy.
The Principles were carefully designed over the course of a year by a working group facilitated by RMI, led by ING and co-led by Societe Generale, with participation from Citi, Standard Chartered and UniCredit. The resulting framework positions lenders to facilitate the net-zero transition of the steel industry — the largest source of industrial emissions globally. Signatories to the SSP represent a combined bank loan portfolio of approximately $23 billion in lending commitments to the steel sector, for a market share of over 11% of total private sector steel lending, according to RMI research.
The SSP provide a methodology for banks to measure and report the emissions associated with their loan portfolios compared to net-zero emissions pathways. In doing so, the framework informs banks of how emissions-intensive their steel loans are relative to the net-zero pathway needed to stay within our planet's remaining carbon budget — a metric known as climate alignment.
Steel is used in everything from cars and fridges to buildings and planes. However, because of the sector's reliance on coal, it contributes 7% of CO2 emissions globally. With demand for steel projected to grow 30% by 2050, emissions are set to rise significantly if we continue with business-as-usual.
Signatories to the Sustainable STEEL Principles commit to the following five principles:
Standardized assessment – A methodology to measure portfolio emissions
Transparent reporting – A framework to disclose progress annually
Enactment – Instructions to obtain credible, high-quality data
Engagement – Signatories are encouraged to engage clients on net-zero transition plans, and available financial products
Leadership – Signatories are encouraged to utilize the framework for advocacy, in the interest of the decarbonization of the steel industry
Law firm Allen & Overy provided legal counsel and CRU provided cutting-edge steel sector data. For full announcement, visit: https://rmi.org/press-release/global-banks-sign-sustainable-steel-principles/
For media enquiries, contact Shravan Bhat, Senior Associate, RMI's Center for Climate-Aligned Finance: firstname.lastname@example.org
SOURCE Rocky Mountain Institute