Severstal

Severstal has established a thorough set of short- and long-term emissions intensity targets. These targets align with the typical asset renewal cycle in the sector. Furthermore, they are closely matched with the company’s 1.5°C pathway and offer clear guidance on its climate performance.

No leading practices were identified for this company.

No leading practices were identified for this company.

No leading practices were identified for this company.

Between 2017 and 2022, Severstal reduced its emissions intensity from steelmaking by less than 1% annually, falling short of its established targets. This poses a risk to the company’s ability to achieve its climate goals. Additionally, the company lacks a net-zero target. Establishing a net-zero target will enhance the credibility of the company’s climate commitments. Further, the company provides no scope 3 targets addressing emissions from its supply chain, which limits the coverage of its emissions reduction efforts.

Severstal currently lacks a low-carbon transition plan. It is imperative for the company to develop a time-bound action plan outlining its transition to a low-carbon economy. This plan should entail a firm commitment to the transition and provide details on investments in crucial decarbonisation technologies and the establishment or expansion of low-carbon business models.  Further, the company’s board should be tasked with supervising the plan, and the company should technical expertise among its board members on climate change and energy transition issues.

Severstal disclosed total research and development (R&D) investments of USD 5.85 million in 2022, but it provided no evidence of the amount allocated to low-carbon technologies. This poses a risk to the company’s targeted commitments, as it requires upfront investments in research to decarbonise steelmaking processes. Additionally, the company does not disclose any significant plans for low-carbon investments in its steelmaking plants, meaning that it’s unlikely the company’s future emissions intensity will drop.

Severstal does not clearly disclose the scope of its supplier engagement strategy, with no explicit mention of emissions reduction requirements or low-carbon criteria. While the company shares the goals of the Paris Agreement, the absence of explicit low-carbon commitments raises questions about its alignment with international climate initiatives.

Severstal has set forth a series of climate targets primarily focused on reducing its scope 1 and 2 emissions intensity. By 2024, the company aims for a 3% reduction in emissions intensity compared to the 2020 baseline of 2,063 kilograms of carbon dioxide equivalent per tonne of steel, followed by a more substantial reduction of 10% by 2030 against the same baseline.

While Severstal shares the goals of the Paris Agreement, the absence of explicit low-carbon commitments raises questions about its alignment with international climate initiatives. The company lacks a transition plan or a clear statement of its investments allocated to low-carbon technologies to fulfil its ambitious climate targets.

Severstal’s absolute scope 1 and 2 emissions have increased at a rate of about 2.2% annually between 2017 and 2022, while its emissions intensity from steel production has not significantly decreased within the same timeframe.

The company focuses on improving energy efficiency and on the use of secondary resources from coke oven gas and blast furnace gas to increase electricity generation and reduce consumption of natural gas. In 2022, a total of 13 energy audits were conducted across the company’s resource assets, each of them assisting the production facilities in dealing with internal issues and in achieving an economic impact of over USD 4 million.

Severstal does not have a transition plan and there is no evidence it intends to develop one in the near future. While the company outlines detailed actions for emissions reduction until 2024, it lacks the long-term actions needed to deliver its 2030 and 2050 targets.

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.

No public commitment by the company was found stating its intention to create and support access to green and decent jobs as part of the low-carbon transition. Moreover, no evidence was found of the company’s action to promote these jobs in a way that ensures gender balance and inclusion of vulnerable groups.
No relevant disclosure was found of the company’s assessment of employment dislocation risks. Further, no public commitment by the company was found stating its intention to reskill and upskill workers displaced by the transition to a low-carbon economy. Additionally, no evidence was found that the company reskills and upskills workers in a way that ensures gender balance and inclusion of vulnerable groups.

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, and it expects its business relationships to respect the ILO fundamental rights at work. Additionally, the company discloses the categories of stakeholders whose human rights have been or may be affected by its activities. However, it can strengthen disclosure of its human rights due diligence process and engagement with stakeholders.

The company commits to respecting the health and safety of its workers and expects the same commitment from its business relationships. It also discloses statistics on the gender of its workforce by employee category. However, the company can strengthen its disclosure of these and other key decent work issues, such as collective bargaining and working hours.

The company has a policy prohibiting bribery and corruption, and it includes corresponding clauses in its business relationship contracts. Additionally, the company discloses the corporate income tax it pays in each relevant jurisdiction. The company can, however, strengthen its disclosure of these and other key ethical business topics, such as responsible lobbying, political engagement and personal data protection.