SteelWatch Statement on Nippon Steel Climate Resolutions

(Updated on June 26, 2024) Tokyo, Japan, 24 June, 2024 – World number four steel producer, Nippon Steel, faced three resolutions from investors to reform its climate change policies at its 2024 annual general meeting on Friday, showing its inadequate plans are under increased scrutiny.

The company’s climate targets fall far short of 1.5C alignment, and its plans rely on technologies that are not capable of deep and necessary emissions reductions, even if fully implemented.

At Nippon Steel’s annual general meeting on 21st June, the three proposals were rejected but according to the Australasian Centre for Corporate Responsibility (ACCR)’s statement, investors in Nippon Steel including Amundi, Nordea Asset Management and Storebrand Asset Management, supported the proposals. ACCR stated, “The support for these shareholder proposals reflects that investors want to see greater ambition from Nippon Steel in seizing the opportunities of the green steel transformation.

Nippon Steel announced the results of the shareholder proposals:

  • Proposal 6 (Climate targets), FOR 21.48 percent
  • Proposal 7 (Remuneration and GHG emissions reduction targets), FOR 23.01 percent
  • Proposal 8 (Climate lobbying), FOR 27.98 percent

These results show significant support by shareholders.

Executive Director of SteelWatch, Caroline Ashley stated, “Public scrutiny of Nippon Steel has started. They use fine words about decarbonisation, hydrogen and future technology but the reality of how little those words mean is finally being understood by others. Scrutiny will only increase as the company expands its global presence from the United States to India. Globally, we see investors increasingly questioning steel companies on the inadequacy of their climate plans and the risks that inaction on climate pose to steelmaker competitiveness in a rapidly decarbonising world.”

This debate on Nippon Steel’s inaction on climate change comes at a time when leading steelmakers, Thyssen-Krupp in Germany and SSAB in Sweden both achieved validation by the Science Based Targets Initiative (SBTi) for having climate plans that are aligned with 1.5C, raising the bar globally for best practices.

It is not too late to change and SteelWatch calls upon Nippon Steel to heed this call by a significant number of investors to make transformational reforms and align its business model with a liveable global climate.

Our recommendations include:

  • Set science-based verified emissions reduction targets in line with 1.5C pathways and immediately develop plans with interim targets to ensure delivery.
  • End research and development of insufficient technologies that prolong fossil fuel-based steelmaking including COURSE50, Super COURSE50 and carbon capture.
  • Focus investment on transformative green technologies with a global shift to renewable-powered EAFs fed by near-zero-emissions green iron and steel scrap.
  • Present detailed transition plans by April 2026 to replace all existing fossil-based facilities and technologies with near zero-emissions steelmaking.
  • End coal-based steelmaking by 2040 at the latest, with no relining of blast furnaces, and a global phaseout in line with investment cycles.
  • No new investments or expansions of coal mining for metallurgical and thermal coal and phase out all ownership and investment in coal mining by 2040 at the latest.

Read more on Nippon Steel’s climate shortcomings and what it can do to get on track in SteelWatch’s recent report: “Too Little, Too Late – Corporate Climate Assessment of Nippon Steel, 2024

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