The NGO Reclaim Finance denounces the financial support of international banks for steelmakers who still use coal to make steel – the historic and still almost exclusive method, highly emitting CO2, responsible for the rise in temperatures on the planet.
Of the 50 large banks studied by the NGO, only one, the Dutch ING, has a specific policy dedicated to financing the production of steel, a basic industry for construction as well as for automobiles and aeronautics.
And only 17 of the 50 banks studied have adopted steel decarbonization objectives, adds the study entitled steeling our future, a play on words in English untranslatable into French, according to which steelmakers and banks are stealing the future of the planet .
The 17 banks are members of the Net Zero Banking Alliance (NZBA), an initiative launching in 2021 with the UN. The members of this alliance are encouraged to prioritize their financing efforts on reducing CO2 emissions by sector – including steel. But its commitments are considered highly insufficient by the NGO.
Thus, while 354 banks provided $429 billion to the 100 largest steel producers between 2016 and June 2023, none of them targets the indirect CO2 missions of so-called scope 3 steel that come from clients like automotive or construction, and none targets methane emissions, denounces Reclaim Finance.
To be aligned with their own decarbonization goals, banks should stop financing coal-based blast furnaces, adds the study which lists the top 10 banks representing 31% of global bank financing granted to steel: Bank of China , China Construction Bank, Bank of America, JPMorgan Chase, Goldman Sachs, CITIC, Citigroup, Mizuho Financial, BNP Paribas, and Agricultural Bank of China.
The NGO nevertheless welcomes the financing granted to 89 green or carbon steel production projects around the world (60% of which are in Europe), via innovative technologies, by banks such as BNP Paribas, ING, KfW, IPEX-Bank, Societe Generale and Unicredit.
This is a step in the right direction on the part of these banks, but they simultaneously continue to finance steel production capacities (blast furnaces) based on coal, notably ArcelorMittal in India, and Nippon Steel, denounces Reclaim Finance.