Climate Action

Six global banks join forces to decarbonize steel

Six banks are working together to develop a climate-aligned finance agreement to support steel sector decarbonization.

  • 01 June 2021
  • Rachel Cooper

Six banks are working together to develop a climate-aligned finance agreement to support steel sector decarbonization.

Several top lenders to the steel sector—Citi, Goldman Sachs, ING, Societe Generale, Standard Chartered, and UniCredit—have come together to define common standards of action for steel sector decarbonization through a collective climate-aligned finance agreement.

The climate-aligned finance agreement establishes a framework for assessing and disclosing the degree to which the greenhouse gas emissions associated with a financial institution’s portfolio are in line with 1.5°C climate targets.

The banks have formed the Steel Climate-Aligned Finance Working Group (the Working Group), facilitated by RMI’s Center for Climate-Aligned Finance, with the goal of crafting an industry-backed agreement before COP26 in November.

The agreement would create a level playing field for measuring progress against climate targets in the steel sector, as well as a platform for proactively supporting the decarbonization of the sector.

Arnout van Heukelem, global head metals, mining & fertilizers, ING Bank, said: “ING aims to be a positive force in the fight against climate change. With our Terra approach we’re steering our lending book in line with the goals of the Paris Agreement. Steel is essential for modern life. The challenge for the steel sector to decarbonize is significant with alternative technology paths unproven and not yet commercialized."

"By leading this working group we signal our commitment to help define what the energy transition means for the sector and our clients. It will also help us to define our expectations for change and define an ambitious yet realistic trajectory to meet those ambitions.”

The Working Group, led by ING and co-led by Societe Generale, comprises senior representatives from each bank’s metals and mining teams. The Working Group will forge the scope, emissions pathways, methodologies, and governance structure of the collective climate-aligned finance agreement in collaboration with existing decarbonization initiatives. With the goal of setting global best practices on climate for financial institutions that fund steelmaking, the Working Group plans to enroll other banks in the final climate-aligned finance agreement to be released at COP26.

Stéphanie Clément de Givry, global head mining, metals & industries, Societe Generale, said: “As a founding member of the UNEP-FI Net Zero Banking Alliance, Societe Generale is committed to work with its clients and partners across sectors to achieve net-zero no later than 2050. By co-leading the Steel Climate-Aligned Finance Working Group, our ambition is to help define a pathway consistent with the development of low-carbon industrial solutions in the steel sector."

Find out more here.