10. Our contribution to society measured, shared and valued

Businesses not only contribute to society through the taxes they pay, but by creating employment, sustaining smaller suppliers, and supporting local economies. We need to measure this contribution and ensure it is widely understood.

Why is this important to us?

Across the world, companies are increasingly expected to make more than a financial contribution – our stakeholders and communities want us to play a wider social role locally, nationally, and internationally. For all these reasons, it’s vital that companies develop better measures of the real long-term value they create.

The commercial imperative

What kind of challenges do we face?

Our social licence to operate depends on the perceived value we deliver to our stakeholders: economic, social and environmental. Where this is deemed to be negative, not positive enough, or simply where we do not have the data, we can lose the trust of governments and communities. We have to be aware that this could cost our business – whether through changes in policy or taxation, or in disruptions to our everyday operations. Unless we have a well-founded reputation, we risk losing customers or potential recruits too.

What do we need to do?

We need to be able to measure the different types of value we create accurately, make this information open to scrutiny, and communicate it meaningfully. We need to consider not only salaries and dividends, tax contributions and payments to suppliers, but the skills training we provide, the investments we make in local infrastructure and to prevent pollution, the impact we have on the sustainability of other industries, and the value our products bring to both consumers and society at large.

What is the potential to create value?

We already make a significant contribution to society, but we need to demonstrate it better. This will help build trust not only in our communities, but among our investors, and our employees will be proud to say they work for us. It will also help prevent disruptions. As our local operations take responsibility for measuring and valuing their own impact, they will make better decisions, and form more resilient business strategies. We will become a partner of choice for governments, and an employer of choice for the talent of the future.

Our stakeholders’ expectations

Mining companies, more than in many other sectors, are expected to make significant economic and social contributions to the communities where they operate. The agreements with host governments – memorandums of understanding – set out these requirements in great detail. Steelmaking companies can also face similar challenges from their host governments and communities.

Recent disclosures about corporate tax payments in the retail sector make the media and consumers more aware of the issue of the contributions companies make. Greater scrutiny of company tax structures is shining the spotlight on the contributions business makes to government revenues. Stakeholders and investors also attach great importance to transparent disclosure, as a crucial element of better governance. The Extractive Industries Transparency Initiative is an example of this, and we have been involved in it since 2007, both on the board and in Liberia.

Sustainability frameworks like the Global Reporting Initiative (GRI) and the Integrated Reporting Framework, as well as concepts such as ‘net positive’ and ‘shared value’, are driving companies like ours to measure and report on the social and environmental value we create through our operations, investments and products.

The outcome we need

We can show the value of the contribution we make to society, and our stakeholders understand and appreciate it.

Achieving our new outcome

We have reported on our socio-economic contribution at a corporate level for a number of years, and we want to do so in a more meaningful way at a local level. As part of our sustainable development framework we will ask our local managers to consider how they demonstrate the positive and negative social and economic impacts of our business. We will also ask them whether there are opportunities to be had in measuring these better, either themselves or by collaborating with others. Most of our local operations produce their own sustainability report and we are making a big effort to improve and extend the information these local reports provide, asking them all to work towards alignment with the GRI G4 framework by 2016 to report on their socio-economic impacts.

Our approach to date

At present we monitor the safety of our workforce, assess the interests of our stakeholders at site level, and report on our implementation of labour standards and human rights. At a global level we also assess the economic value created through our procurement, tax payments and R&D investments. With the exception of a small number of studies – we have not yet combined these and our environmental measurement into a comprehensive assessment of net social impact. Nor have we assessed the social impact of our steel products. However, we are taking some initial steps in this direction, which we will build on as we pursue this new outcome.

What's new?

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Our Stories01.04.2016 Collaboration on the Great Lakes
Our Stories01.04.2016 Getting on the front foot in Ostrava: dealing with dust
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Our Stories01.04.2016 Clearing the air: new products for indoor environments
Our Stories01.04.2016 New ideas, new technology: interns in Argentina
Our Stories01.01.2015 Engineering low-carbon solutions for buildings
Our Stories01.01.2015 Sustain Our Great Lakes
Our Stories01.01.2015 Measuring impact in South Africa
Our Stories01.01.2015 Liberia: Mobilising the response to Ebola
Insight30.05.2015 Steel packaging and the circular economy
SD Update19.01.2017 Gender diversity award for ArcelorMittal Ostrava
SD Update31.10.2016 Moroccan steelmaker heads for 90% wind-powered steel
SD Update10.10.2016 Largest exporter in Bosnia & Herzegovina
SD Update25.09.2016 Judiciary honour for social outreach work in Brazil
SD Update27.06.2016 ArcelorMittal assesses contribution to South Africa
SD Update16.05.2016 Nafta: review of 2015
SD Update13.05.2016 How does ArcelorMittal create value for society?
SD Update03.12.2015 Presenting lightweight solutions at Megatrends India
SD Update12.11.2015 The building you can build again and again
SD Update30.07.2015 Building for the future: the b home