Gerdau

Gerdau produces 71% of its steel from recycled scrap metal, which allows the company to have a lower-than-average emissions intensity. Additionally, the company has decreased its scope 1 and 2 emissions in line with its 1.5°C pathway.

No leading practices were identified for this company.

No leading practices were identified for this company.

No leading practices were identified for this company.

Gerdau has set a target to reduce its scope 1 and 2 emissions intensity by nearly 12% by 2031 compared to 2020. Moreover, the company aims to be net zero by 2050, although this target includes the use of carbon offsets. In addition to these targets, the company should also set intermediate targets at gaps of no more than five years to incentivise near-term action on its longer-term goals. Between 2019 and 2022, Gerdau decreased its scope 1 and 2 emissions intensity at 3.5% annually, which is aligned with its 1.5°C pathway.

Gerdau has a comprehensive time-bound transition plan that includes emissions intensity and emissions reduction targets for both its scope 1 and 2 emissions. Moreover, the company has implemented board-level oversight and incentives for managing the low-carbon transition. However, none of the company’s board members were found to have significant climate expertise. Gerdau is developing low-carbon activities outside of its core business, such as its business branch Gerdau Next, which focuses on products, services and solutions that complement steel.

Gerdau does not disclose its investment in research and development (R&D) in the last three years, nor the proportion invested in low-carbon technologies. R&D expenditure on low-carbon technologies will be essential for the company to develop a low-carbon product portfolio. There is no evidence that Gerdau carries out interventions within its value chain to reduce emissions for purchased products, such as ferroalloys.

Gerdau actively collaborates with its scrap metal suppliers, as around 70% of its steel production is sourced from ferrous scrap metals. The company has partnerships with its scrap metal dealers, who collect scrap metal disposed by people. However, Gerdau can go further by encouraging its bigger suppliers to set science-based targets and developing joint low-carbon R&D projects. The company publicly demonstrates support for climate policies and collaborates with international organisations. For example, it commits to the nine sustainable principles set out in the World Steel Association’s (Worldsteel’s) Sustainability Charter.

Gerdau has set a target to reduce its scope 1 and 2 emissions intensity by nearly 12% by 2031 compared to 2020. Moreover, the company aims to be net zero by 2050, although this target includes the use of carbon offsets.

Gerdau has a comprehensive transition plan that considers quantified technological opportunities for decarbonisation. However, the company does not disclose its investment in R&D for the last three years, nor its percentage of low-carbon revenues.

Gerdau’s scope 1 and 2 emissions intensity decreased from 2018 to 2022 in alignment with the company’s 1.5°C pathway. The annual historical reduction was approximately 3.5%.

Gerdau has established a new business branch called Gerdau Next, focused on new products, services and solutions that complement steel. One of the segments includes a portfolio of sustainability-driven energy businesses, such as Newave Energia. This venture focuses on renewable energy, from generation to trading.

Gerdau has a comprehensive low-carbon transition plan but does not include targets for scope 3 emissions. To ensure alignment with a 1.5°C pathway, the company should include targets that cover the majority of its emissions, including scope 3. The company has implemented board-level oversight of climate change issues, but its board does not have expertise in the low-carbon transition.

No evidence was found of the company’s commitment to social dialogue or of the categories of stakeholders the company engages with on a just transition. Furthermore, no evidence was found to demonstrate the company’s ongoing social dialogue and meaningful engagement with affected stakeholders.

No evidence was found of the company undertaking low-carbon transition planning to mitigate the social impacts of the transition on workers, affected stakeholders and its business relationships. Additionally, no evidence was found to demonstrate the company’s engagement in social dialogue and with stakeholders in its just transition planning.

The company discloses its actions to create jobs through targeted investments, including in renewable electricity. It also discloses the measures it takes to ensure that these jobs embed equality of opportunity for women and vulnerable groups. For example, it has targeted programmes for the employment of people in the LGBT+ community. However, no evidence was found of the company committing to create and support access to green and decent jobs as part of the low-carbon transition.

No relevant disclosure was found of the company’s assessment of employment dislocation risks. The company discloses its actions to provide training and educational opportunities for workers and affected stakeholders. For instance, it offers internship and trainee programmes and targeted training for certain needed skills among its employees. However, no relevant disclosure was found of the company embedding equality of opportunity for women and vulnerable groups in these actions. Furthermore, no evidence was found of the company having a process for identifying skills gaps for workers and affected stakeholders or a public commitment to help workers displaced by the transition to reskill or upskill.

No relevant disclosure was found to show if the company identifies the impacts of the low-carbon transition on social protection for workers and affected stakeholders, nor how it contributes to their social protection. Additionally, no evidence was found that the company expects its business relationships to contribute to the social protection of their workers and affected stakeholders.

No relevant disclosure was found to show how the company identifies any misalignment of its lobbying activities with policies and regulations that support the just transition, nor of the measures it takes to address misalignment. Furthermore, no evidence was found that the company lobbies for policies and regulations for green and decent job creation; retention, education and reskilling; and social protection for workers.

The company commits to respecting human rights and the ILO fundamental rights at work. However, no evidence was found of the company’s process to identify, assess and mitigate salient human rights risks in its operations and supply chain. Moreover, no evidence was found of the company disclosing the stakeholders whose human rights have been affected by its activities. The company does, however, have a grievance mechanism available to workers and external stakeholders.

The company commits to respecting the health and safety of its workers and expects the same commitment from its business relationships. However, no evidence was found of the company having a time-bound target for paying all workers a living wage. While the company discloses the proportion of its direct workforce covered by collective bargaining agreements, no relevant disclosure was found of the company’s required working hours. The company discloses some indicators of workforce diversity, such as the age and gender of its workforce by employee category. However, no relevant disclosure was found of additional indicators of workforce diversity. The company commits to promoting gender equality and women’s empowerment.

The company commits to protecting personal data, but no evidence was found of the company having a privacy statement regarding the collection, sharing and access to personal data. While the company discloses its global tax strategy, no relevant disclosure was found of the corporate income tax it pays in each relevant jurisdiction. The company has a policy prohibiting bribery and corruption, and it includes corresponding clauses in its business relationship contracts. Additionally, the company has a publicly available political engagement policy that specifies that it does not make political contributions. However, no relevant disclosure was found of the company’s expenditure on lobbying activities.