responsiblesteel webinar on standard march 2019 ......responsible sourcing: the challenge...

Principle4:ResponsibleSourcing

intheResponsibleSteelDraftStandard3.0

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…

Seekinginteroperability


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


OECDDueDiligence

Thefivesteps:


Assessmentofminesitecertificationstandards

ResponsibleSteel targetlevel

MAC-TSM: A MAC-TSM:AA

“IRMA75” IRMA

(maximum=100points) 40points 60points 75points 90points

Hypothetical ratingofstandards:


ProductLevel3

ProductLevel1

ProductLevel2

Threshold(Sitecertification)

Target

OECD,duediligence,addressinghighriskissues

MAC-TSM

IRMA

Levelsofcertification


Assessmentofminesitecertificationstandards

Atypicalsteelmakingsitemaysourcefrom30or40minesites…

Source MAC-TSM: A MAC-TSM: AA IRMA• MaterialSource1 ✓ 40

• MaterialSource2 ✓ 60



• MaterialSource5notcertified

• Etc

Overallscoreforsourcing:(40+60+60+90+0)/5=50

Atypicalsteelmakingsitemaysourcefrom30or40minesites…



C4.1 ResponsibleSourcingPolicy

C4.2 Highprioritymaterialsandsupplychainmapping

C4.3 Riskandadverseimpactassessment

C4.4 Addressingandmonitoringrawmaterialriskandadverseimpact

C4.5 Supplychainmonitoringandreporting



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



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.

Corerawmaterials


Aluminium(metallic)CharcoalCoalMetallurgicalCoalCokeCobaltCalcium(coredwire)DolomiteFerro-AluminiumFerro-BoronFerro-ChromiumFerro-ManganeseFerro-MolybdenumFerro-NickelFerro-Niobium

Ferro-PhosphorousFerro-SiliconFerro-TitaniumFerro-TungstenFerro-VanadiumGraphiteIronoreIron(pig)LimestoneMagnesiaMolybdicOxideSilico-manganeseTinZinc



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




4.4.1 • Time-bound, costed planstoreduceprobability/severityofnegativeimpacts,andtoeliminateissuesofhighconcern

4.4.2 • Senior managementresponsiblefordecidingonactionstoaddressissuesofhighconcern,withurgentactiononissuesofhighconcern

4.4.3 • Systemformonitoringimplementationofplananditseffectiveness• Includes demonstrationthatRSscoreisimprovingovertime

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:

ProductClaims Responsible SourcingofRawMaterials GHGEmissions

Level1 4.4.4– 4.4.7 Level1GHGemissions



Product(steel)certificationlevels




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


Foryourdiaries

11April:deadlineforcommentsonDraft3-0ofthestandard

24-25April:OECDForumonResponsibleMineralSupplyChains,Paris

17-18June:ResponsibleSteelmembersmeeting,London

1-3December:ResponsibleSteel ForumII,locationtobeconfirmed,likelySydney


Yourcontacts:

MarnieBammert,TechnicalDirector,[email protected]

MatthewWenban-Smith,ExecutiveDirector,[email protected]

responsiblesteel webinar on standard march 2019 ......responsible sourcing: the challenge...

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