ESG: A Circular Future

The metal industry’s future includes many promising circular pathways for meeting the world’s growing appetite for sustainably sourced products.

Last fall, for example, BMW announced that starting in 2025, it would source only steel produced without fossil fuels. To accomplish this, it invested in a U.S. startup developing a CO2-free process for producing steel. It also struck a deal to source steel from a Swedish startup touting a production process involving hydrogen and electricity from 100% renewable energy sources.

Similarly, Tata Steel is using a blockchain-based shared ledger to store data about the chemical composition of the steel panels it’s supplying to the massive, British HS2 high-speed railway construction project. Done with an eye towards repurposing or recycling the panels at the end of their lifespan.

With so much recent change and evolution, one thing is clear – to thrive in this increasingly sustainability-driven, circular economy-minded world, we’ll need to remain focused on the following, ESG-centric priories:

New Technology

Shareholders, business and supply-chain partners, customers and, of course, regulators are calling on metal companies to behave more responsibly in terms of their environmental impact. Our segment of the industry is responding by exploring and commercializing more circular processes. Things like alternative power sources for facilities, hybrid and EV machinery, and robust in-house recycling programs. While primary producers are turning to “green” supply partnerships (with processors like Venture Metals +) and electric arc furnaces (EAFs) to reduce CO2 emissions.

Calculation and Reporting

Knowing that sustainability factors will carry increasing weight in the choices that customers, shareholders, and supply-chain partners make, strong calculating and reporting capabilities are critical to the success of circular business ventures. These capabilities enable us to accurately, and transparently, pinpoint the environmental goodwill that results from recycling reclaimable materials. They also allow us to report, in detail, the past, current, and ongoing efforts we make every day to maintain best-practices in the areas of environmental, social, and corporate governance. The interconnected nature of our ESG efforts and the actions of our partners allows these calculating and reporting capabilities to extend our own operations to the entire supply chain – making it clear, for example, that the cobalt in an electric car’s battery is sourced in an ethically responsible way, that the aluminum in certain vehicles is manufactured using renewable energy, etc.

Industry Ecosystems

Making these priorities viable can’t be accomplished singlehandedly, but rather takes collaboration between individual companies and broader industries. The third, critical piece is to establish connected business networks (or ecosystems). Within these networks we can pool data, leverage one another’s strengths, and collectively explore and develop additional, sustainable technologies, calculations, reporting, etc.

With carbon-reduction as the catalyst and technology, calculation, reporting, and business networks as the connective tissue, we can look towards a circular future with much greater clarity.