BlueScope Steel, the multinational steel-making corporation, is one of Australia’s major consumers of energy. The company requires large amounts of energy to be able to create steel via its smelting, furnace and production operations and is one of the top 20 energy users in Australia.
At today’s annual general meeting, chair John Bevan said Bluescope supports the goals of the Paris Agreement. However, Bluescope’s target to reduce steelmaking emissions intensity by 12% by 2030 falls a long way short of the ~50% reduction in absolute emissions required across the economy in order to align with the Paris Agreement’s goal of limiting warming to 1.5°C. Globally, steel is responsible for 7 per cent to 9 per cent of global greenhouse gas emissions.
‘How have the Climate Action 100 investor group reacted to Bluescope’s lacklustre emissions target? Are we likely to see more aggressive action from these investors to meet their demand for emissions reductions across our value chain in line with Paris?’ A shareholder asked.
Bevan declined to comment on the Climate Action 100 investor group in his response. However, he did indicate that these commitments would be improved in the next year.
‘The 12% by 2030 was set in 2018 and reflects energy efficiency projects we can actually generate ourselves to reduce emissions with our existing technology footprint.’
‘We understand that technological changes are required for us to achieve the Paris targets and we said earlier that we are committed to doing so. That may lead us to revise our longer-term commitments in the coming 12 months or so. We will keep you updated in the 2021 sustainability report.’
Bevan made similar comments last year which were not followed through with concrete policies or commitments.
BlueScope’s board and investors, including large super funds like AustralianSuper, UniSuper, Hostplus and HESTA, need to ensure the company follows through with short-, medium-, and long-term absolute emission reduction targets, which are aligned with the Paris Agreement and cover all value chain emissions.
BlueScope’s Sustainability Report outlines a range of emerging low emissions technologies the company is monitoring, which obviously has the potential to significantly improve Bluescope’s sustainability given the rapid decarbonisation required to avoid the worst impacts of climate change.
‘What is the company doing to expedite the development and take-up of these technologies? Is Bluecsope committing any capital expenditure to support their development?’ Another shareholder asked.
‘We need to have a technology change for steel to meet our longer-term objectives….we’re also working with the government in looking at how the commercialisation of green hydrogen could operate because clearly, that’s one of the technologies we could be looking at. We are allocating capital and expenditure to make sure this happens. We’ll keep you updated on our sustainability report on an annual basis.’ Bevan responded.
BlueScope needs to indicate how much capital and expenditure they are spending to make this happen and make sure this is in line with limiting warming to below 1.5°C. Bevan made similar comments last year however the company has done little to demonstrate a long-term business plan consistent with the goals of the Paris Agreement.
As we wrote in the AGM write up last year, without proper targets, there is no need for Bluescope to allocate enough capital and work hard enough to develop a zero-carbon business model, leaving the company at risk of being left behind.