Emerging Practice: Climate Target Setting for Steel Sector Financing

Year Published

2024

Contributing Organizations

United Nations Environment Programme Finance Initiative (UNEP-FI)

Net Zero Banking Alliance (NZBA)

Type of Resource

Research/Insights Report

Languages

English

Relevant Topics

Core Topic

Mining & Metals

Topic 2

Target Setting

Topic 3

Banking

Target Audience

Banks

Relevant Geography

Global

Resource Description

This resource outlines emerging practices for setting climate targets in steel sector financing, based on NZBA member experience. It provides guidance on methodologies, emissions scopes, and scenario use for net-zero alignment.

Why This Matters

With steel responsible for ~7% of global CO₂ emissions, this resource helps financial institutions align financing with credible decarbonization pathways.

Key Insights

Recommends intensity targets (tCO₂/ton steel) covering Scope 1, 2, and key Scope 3 emissions
Supports use of IEA and SBTi pathways tailored to steel production
Highlights challenges like diverse technologies, policy differences, and Scope 3 data gaps
Advises factoring in transition technologies, plant turnover, and production models
Stresses borrower engagement and strong internal governance

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