Our challenge

With a large and complex value chain, the risk of variable social and environmental standards is very real, and assessing these social and environmental standards is no simple task. With high expectations from our customers, and as a customer to our own suppliers, we need to create alignment on what standards are needed and show that we conform with these. We want our customers to be able to tell the full story of their products with the confidence that our steel – and the raw materials it’s made from – comes from a value chain that meets everyone’s expectations.

Our approach

We engage continuously with our customers to understand what they expect from us. As their expectations grow in this area, we are making progress on several fronts:

• ensuring our management systems reflect the highest global standards
• strengthening our due diligence  to deepen our understanding of the risks right across our supply chain
• working with other stakeholders to mitigate risks 
• building global multi-stakeholder standards with third party assurance both for the steel industry and our supply chain, especially the priority area of raw materials, where risks are highest.

This approach is aligned with the five-step guidance developed originally for conflict mineral supply chains by the Organisation for Economic Cooperation and Development (OECD , ‘the five-step OECD guidance’): manage – identify risks – mitigate – audit – report.

Management systems – Code for responsible sourcing

Our responsible sourcing team works with the corporate responsibility department on our approach, defining the standards we promote, assessing our supply chain risks, implementing and monitoring our systems. On a day-to-day level, we assess how our suppliers manage their performance, by assessing them against our code for responsible sourcing.

Our code was established in consultation with customers, suppliers, peer companies and NGOs, observing international best practice. It covers health and safety, human rights, labour standards, business ethics and environmental management – and we evolve it to incorporate new expectations that emerge such as conflict minerals and modern slavery. It is focused on the procurement of raw materials, industrial equipment and operating products, which we purchase centrally through a single purchasing channel.

All new suppliers must agree to the terms of our code and all existing suppliers are asked to acknowledge it or commit to equivalent standards. Each year we invite our core and strategic global suppliers to complete a questionnaire, and we regularly evaluate any suppliers that do not meet our standards until they can comply. If necessary, we jointly develop an action to help them monitor their progress towards meeting our standards.

At the same time, given the wealth of standards that exist, and the number of companies auditing the same suppliers, we are acutely aware of the potential to achieve better synergies and at the same time provide our customers with a common form of reassurance. For these reasons we encourage our raw materials suppliers to collaborate on global sustainability certification standards, and work with them, customers and other stakeholders to develop multi stakeholder standards

Due diligence

Identifying and monitoring supply chain risk: To identify and manage social and environmental risks in our supply chain, we apply supply chain due diligence. Over recent years, we have deepened our mapping of the social and environmental risks in our raw materials supply chain, working with the Dragonfly Initiative to analyse these risks by supplier, by country and by material. This has been a challenging piece of work given the complexity of our supply chain. We have also worked with worldsteel to create tools for our industry on supply chain due diligence.

There is also continued concern that some conflicts around the world are being financed by the trade in minerals such as tin, tantalum, tungsten and gold. From a portfolio of more than 2,000 steel products, only a very limited number of ArcelorMittal products contain tin and tungsten, which are necessary for the functionality or production of certain products.

Our annual due diligence process ensures we're aligned with the five-step OECD guidelines for responsible supply chains of minerals from Conflict-Affected and High-Risk Areas – we explain and report on the most recent results of our survey and publish our Special Disclosure Report in compliance with the Dodd Frank Act Section 1502. In addition to the US Dodd-Frank Act, we’re preparing to meet the requirements of the EU’s new conflict minerals regulation.

There are also a number of other regulations requiring public reporting on the due diligence we undertake.

Working to mitigate risks

An essential element of supply chain due diligence is demonstrating action on the ground to address issues we've identified. For example, we have been part of the Tin Working Group (TWG). This coalition of high-profile consumer electronics brands, metal manufacturers, NGOs, and government and industry bodies has been run by the Responsible Minerals Initiative, and aims to address the social and environmental impacts of tin mining. Working with miners, local government and other stakeholders to understand the situation in Bangka island, Indonesia, the TWG supports a road map for improvements. With a grant from the European Partnership for Responsible Minerals (EPRM), the TWG has supported two pilot projects: one focused on the sustainable reclamation of mining land and one to improve health and safety among miners.

Multi-stakeholder standards and site-based certification: We’ve taken a key role in the evolution of two new certification organisations, ResponsibleSteel™ and the Initiative for Responsible Mining Assurance (IRMA) and we work with the Responsible Minerals Initiative to help create greater alignment between mineral-using industries. We’re helping to strengthen their governance, membership network, strategic outlook and communications. To create greater impact and efficiency, we’re working to align both standards bodies with each other.

In the first exercise of its kind, we piloted ResponsibleSteel™ at multiple sites worldwide in 2019, to test and shape the process. This has helped us understand how the standard is likely to be applied, how manageable the audit process is, and how close we are to meeting the standard. We’re planning the roll-out of ResponsibleSteel™ across the company and aim to certify all our integrated steelmaking sites in Europe against the ResponsibleSteel™ standard by the end of 2020. See here for more.

We’re already completing the three-yearly independent verification review of the performance of ArcelorMittal Mines and Infrastructure Canada as part of the Toward Sustainable Mining (TSM) programme of the Mining Association of Canada (MAC). And we’re committing to a gradual roll-out of TSM principles and standards across our marketable mines outside Canada in a four-year work plan beginning in 2018.

In addition, several of our business units globally are certified to responsible sourcing standards, such as BES 6001, SA 8000 or the Ethical Trading Initiative (ETI) base code.

At the same time, we have worked to encourage co-operation between standard-setters at IRMA, TSM and ResponsibleSteel™. In the same spirit, the Responsible Minerals Initiative has joined forces with the International Council on Mining and Metals (ICMM) to create a working group to shape the debate. Members include miners, mineral users from the auto and electronic sectors and several mining schemes (IRMA, TSM, ICMM, RJC, ASI, ResponsibleSteel™).