On Thursday, the energy technology research group Rocky Mountain Institute (RMI) announced a new steel industry climate initiative under the aegis of its Center for Climate-Aligned Finance. Six major lenders to the steel sector–Citigroup, Goldman Sachs, Société Générale, ING, Standard Chartered and UniCredit–will come together to establish shared action standards for decarbonization of the global steel industry through a collective finance agreement.
The group aims to present an industry-backed agreement–one that creates a level playing field for measuring progress against steel sector climate targets and a platform for supporting the sector’s decarbonization–before the United Nations COP26 Climate Change Conference in November 2021. The agreement will be modeled after the Poseidon Principles, the landmark climate-aligned finance agreement for shipping. Developed through multi-stakeholder collaboration between major shipping lenders, industrial corporations and experts, RMI hopes the Poseidon framework can be usefully adapted for other industries.
While low-carbon technologies are used in many industries, RMI notes that in the steel sector, which accounts for around 7 percent of global energy emissions and is heavily coal-dependent, commercially viable alternatives are still at an early stage. The sector’s carbon intensity raises expectations from financial institutions to support its decarbonization.
The group, led by ING and co-led by Société Générale, the Working Group will create a scope, emissions pathways, methodologies, and governance structure of the collective climate-aligned finance agreement in collaboration with existing initiatives.
