In the third part of this series, Zulma Herrera, COO Davis Index, explores the Global Steel Climate Council certification and how it differs from similar programs.
Information on environmental performance is becoming key for companies, as all stakeholders, including employees, customers and financing sources, want to know a company’s environmental impact and climate transition plan.
For example, the new European Sustainability Reporting Standards are part of the European Union Corporate Sustainability Reporting Directive to address climate change and environmental degradation through increased transparency. U.S. Trade Representative Katherine Tai requested the U.S. International Trade Commission (ITC) develop a report on greenhouse gas emissions associated with steel and aluminum production in the U.S. by January 2025.
Under the new EU reporting standards, companies must disclose whether they have climate transition plans and social factors to inform of the investment risks and opportunities presented by environmental, social and governance (ESG) variables. Large companies must publish their first reports with 2024 data, while smaller companies will be phased into the program. EU authorities are also developing industry-specific disclosure requirements.
Many believe that the recently established EU standards are not strict enough and that their incomplete methodology hinders the creation of a precise, reliable sustainability reporting framework. Still, the climate discussion is materially coded into legislation influencing access to public and private financing.