responsiblesteel webinar on standard march 2019 ......responsible sourcing: the challenge...
TRANSCRIPT
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Principle4:ResponsibleSourcing
intheResponsibleSteelDraftStandard3.0
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ResponsibleSourcing:thechallenge
responsiblesteel.org
• Steel’srawmaterialfootprint:• 10%ofcoal• 20%oftinandtungsten• 60%ofnickelandzinc• 75%ofchromium• 85%ofmanganeseandvanadium
• ResponsibleSteel scopeincludesallrawmaterials(ore,coal,scrap,alloys,coatings)
• Asteelmakingsitemaysourcefrom30or40minesites
• Highsocialandenvironmentalimpacts• Operationalstandardsvariable• Risknothighlycorrelatedwithvolume• Noestablished,comprehensivecertification
system• Plusprocessingsites:cokemaking,sinterisation,
pelletisation,smelting…
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Seekinginteroperability
responsiblesteel.org
Publicprocurement
Infrastructure:SURE
Greenbuilding:LEED,BREEAM
Automotive:DRIVE-
Sustainability
Companysourcingspecifications
Copper
Tin
Aluminium (ASI)
Etc …
Steelmaking:ResponsibleSteel
Rawmaterials EndUseProcessing
FrameworkforAlignment:Principles,Criteria…
Large-scalemining:IRMA
MAC-TSM(others?)
Artisanal&SmallScaleMining
Scrap:RIOS
ForumfortheFuture(ship-breaking)
TechnicalexpertiseMarketexpertiseBusinessinterest
Efficientstakeholdergroupings
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responsiblesteel.org
OECDDueDiligence
Thefivesteps:
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responsiblesteel.org
Assessmentofminesitecertificationstandards
ResponsibleSteel targetlevel
MAC-TSM: A MAC-TSM:AA
“IRMA75” IRMA
(maximum=100points) 40points 60points 75points 90points
Hypothetical ratingofstandards:
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responsiblesteel.org
ProductLevel3
ProductLevel1
ProductLevel2
Threshold(Sitecertification)
Target
OECD,duediligence,addressinghighriskissues
MAC-TSM
IRMA
Levelsofcertification
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responsiblesteel.org
Assessmentofminesitecertificationstandards
Atypicalsteelmakingsitemaysourcefrom30or40minesites…
Source MAC-TSM: A MAC-TSM: AA IRMA• MaterialSource1 ✓ 40
• MaterialSource2 ✓ 60
• MaterialSource3 ✓ 60
• MaterialSource4 ✓ 90
• MaterialSource5notcertified
• Etc
Overallscoreforsourcing:(40+60+60+90+0)/5=50
Atypicalsteelmakingsitemaysourcefrom30or40minesites…
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Principle4:ResponsibleSourcing
responsiblesteel.org
C4.1 ResponsibleSourcingPolicy
C4.2 Highprioritymaterialsandsupplychainmapping
C4.3 Riskandadverseimpactassessment
C4.4 Addressingandmonitoringrawmaterialriskandadverseimpact
C4.5 Supplychainmonitoringandreporting
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Principle4:ResponsibleSourcing
responsiblesteel.org
C4.1 ResponsibleSourcingPolicy
4.1.1• AssessESGimpactsofrawmaterials• Exclude sourceswithunacceptableimpacts• Sourcefromcertifiedsitesoforiginwhereavailable
4.1.2 • Incentives alignedwithpolicy
4.1.3 • Policycommunicated tosuppliers
4.1.4 • Supplierstoprovide accurateembeddedGHGdata
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Principle4:ResponsibleSourcing
responsiblesteel.org
C4.2 Highprioritymaterialsandsupplychainmapping
4.2.1 • Uptodate inventoryofrawmaterialsusedforsteelmaking,andsuppliers
4.2.2• Materialsassessed toidentifypotentialadverseimpacts• Severity ofpotentialimpactsclassifiedaslow,medium,high• Levelofassociation classifiedaslow,medium,high
4.2.3 • ‘core’rawmaterialsautomaticallyconsideredhighpriority• Otherwise,level ofpriority=severityxassociation
4.2.4 • Systemtoidentifyand recordsourcesoforigin,transportation,processingsitesforthehighpriorityrawmaterials
4.2.5 • Forhighpriority materials:sources,transportationlinksandprocessingsitesidentifiedwithin3years.
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Corerawmaterials
responsiblesteel.org
Aluminium(metallic)CharcoalCoalMetallurgicalCoalCokeCobaltCalcium(coredwire)DolomiteFerro-AluminiumFerro-BoronFerro-ChromiumFerro-ManganeseFerro-MolybdenumFerro-NickelFerro-Niobium
Ferro-PhosphorousFerro-SiliconFerro-TitaniumFerro-TungstenFerro-VanadiumGraphiteIronoreIron(pig)LimestoneMagnesiaMolybdicOxideSilico-manganeseTinZinc
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Principle4:ResponsibleSourcing
responsiblesteel.org
C4.3 Riskandadverseimpactassessment
4.3.1 • Assessment ofthecompanies’actualsupplies• Suppliesclassifiedasbeingoflow,mediumorhighconcern
4.3.2 • Assessmenttakesaccount ofrelevantinformation(e.g.certification,auditreports)
4.3.3• Humanrightsassessment includesproactivestakeholderconsultation• OECDconflictguidance• Focuson‘redflag’suppliersandlocations
4.3.4 • Materialfrom‘redflag’suppliersandlocationsautomaticallyofhighconcern• High prioritymaterialsofunknownoriginareautomaticallyofhighconcern
4.3.5 • Processisupdatedonongoing basis
4.3.6 • MethodforcalculatingtheoverallResponsibleSteel score– seeAnnex3
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Principle4:ResponsibleSourcing
responsiblesteel.org
C4.4 Addressingandmonitoringrawmaterialriskandadverseimpact
4.4.1 • Time-bound, costed planstoreduceprobability/severityofnegativeimpacts,andtoeliminateissuesofhighconcern
4.4.2 • Senior managementresponsiblefordecidingonactionstoaddressissuesofhighconcern,withurgentactiononissuesofhighconcern
4.4.3 • Systemformonitoringimplementationofplananditseffectiveness• Includes demonstrationthatRSscoreisimprovingovertime
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CertifiedSteel
4.4.4– 4.4.7Level1
CertifiedSteel
4.4.8– 4.4.10Level2
CertifiedSteel
4.4.11– 4.4.13Level3
Responsiblesourcing
• Thirdparty audits atsmelters of mineralsfrom conflict-affectedand high-risk areas
• Issues of highconcernaddressed and resolvedfor allhighpriority rawmaterials
• >Y%ofsites(byvolumeandbynumberofsites)arecertified
• Dataonsites of originmade available tocustomers
Asforlevel1,plus:• >YY%ofsites(byvolumeandbynumberofsites)arecertified
• Overallscoreforrawmaterialperformanceis>Z)
Asforlevel1,plus• >YYY%ofsites(byvolumeandbynumberofsites)arecertified
• Overallscoreforrawmaterialperformanceis>ZZ)
Requirements4.4.4to4.4.13
Productcertification:allrequirementsforsitecertificationaremet,plus:
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ProductClaims Responsible SourcingofRawMaterials GHGEmissions
Level1 4.4.4– 4.4.7 Level1GHGemissions
Level2 4.4.8– 4.4.10 Level2GHGemissions
Level3 4.4.11– 4.4.13 Level3GHGemissions
Product(steel)certificationlevels
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Principle4:ResponsibleSourcing
responsiblesteel.org
C4.5 Addressingandmonitoringrawmaterialriskandadverseimpact
4.5.1 • Recordsofsupplychainassessments arekeptfor5years,andavailabletodownstreampurchasersonrequest
4.5.2• Raw materialsinventoryismaintained,includingquantities,embeddedGHG
figures,whichsitesarecertified(withperformancelevel),levelsofadverseimpact(see4.3.1– 4.3.3)
4.5.3 • Annualreportonduediligencesystem
4.5.4 • Adverse impactassessmentsandactionplansavailabletocustomersonrequest
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responsiblesteel.org
Foryourdiaries
11April:deadlineforcommentsonDraft3-0ofthestandard
24-25April:OECDForumonResponsibleMineralSupplyChains,Paris
17-18June:ResponsibleSteelmembersmeeting,London
1-3December:ResponsibleSteel ForumII,locationtobeconfirmed,likelySydney
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responsiblesteel.org
Yourcontacts:
MarnieBammert,TechnicalDirector,[email protected]
MatthewWenban-Smith,ExecutiveDirector,[email protected]