All quarterly reviews

Q1 2017

Sustainable development leadership review

We start the first quarter, as always, with a review of the past year. It’s a useful exercise, because it gives us an opportunity to learn from good practice across the business and to help ourselves and our stakeholders understand the value we provide to society, value that’s often taken for granted because it surrounds us all day, every day. 

Simply, steel makes the quality of life we enjoy possible. 

The question of our time is: How do we enable everyone on Earth to enjoy the same high standard of living as we do, when resources are becoming limited and without unintended consequences such as climate change? 

To try to begin to answer this enormous question, while reminding us all what a significant contribution steel makes to our daily lives, we published our 2016 review, Sustainable progress. As in 2015, corporate responsibility and sustainable development are integrated within this annual business review. 

Throughout the course of 2016, our Action 2020 strategy has deepened our understanding of how good ecology is good for business. This has enabled us to see the links between our sustainability performance and financial results in a new light and to report on these in a more cohesive way. To further our progress toward fully integrated reporting, we’ve added a new value creation model which highlights the resources required to produce the 90 million tonnes of steel we manufacture each year and the value this creates for society. The 2016 report also explores the environmental and social trends likely to impact our business plans in the longer-term in a new section called Beyond 2020.

As important as such reports are, they are only a reflection of the leadership our sites around the world demonstrate every day. This quarter, I was lucky enough to visit Brazil, and had the opportunity to see for myself how running a highly responsible operation pays off. A case in point is the measures our Brazilian colleagues put in place to make their scrap industry more reliable. By taking steps to ensure scrap metal is the desired quality, not only are they improving that market, they’re safeguarding ArcelorMittal’s interests and in doing so, they’re aligning best practice with commercial outcomes.

It was also good to see the positive relationships which ArcelorMittal Brazil is building with local communities to develop trust and ensure our mutual success. An example of bold leadership in action is their decision to enhance a well-established trust by having their vast forest estate certified by the Forest Stewardship Council.

Speaking of certification, as a founding member of ResponsibleSteel™ and vice chair of its board, I’m pleased with the progress I see the organisation making. The draft standard is being reviewed by members and will soon be ready for public consultation. Plus ResponsibleSteel™ now has an acting managing director and a technical director, both of whom are busy meeting key stakeholders and prospective members. New members will soon be emerging and over the next quarter we should see some major decisions made, including how the ResponsibleSteel™ standard will integrate existing mining standards into its own, making it the first standard to make standardisation exactly that. 

I’m also looking forward to some significant milestones in its development. A summit, planned for the autumn should see its governance structure and draft standard proposed, debated and approved.

Internally, ArcelorMittal has begun piloting the draft standard at some of our key sites, in anticipation of ResponsibleSteel™ being market-ready in 2018-19.

Being able to say our steel is certified as sustainable is something my team and I are enthusiastic about. We see the increased interest in supply chain standards as an opportunity. We want our customers to be confident that the steel they buy has been produced according to robust environmental and social standards. This is the ambition set out in sustainable development outcome 7, supply chains that our customers trust.

Our focus for the rest of the year will be on this and the rest of our ten sustainable development outcomes and developing these into more specific plans and objectives. To get a glimpse into what this means for us, I invite you to watch a new series of videos on our YouTube channel summing up each outcome, why it matters to us and what we’re doing to develop that ambition. 

There is much to look forward to as we continue to find ways to make the lifestyles we enjoy available to all, while caring for the planet. That said, I am delighted with the progress we have already made. Progress you can learn more about in our 2016 review.

Dr Alan Knight
General manager, head of corporate responsibility and sustainable development