SSAB Introduces New Green and Sustainability-Linked Finance Framework
SSAB, a leading steel company, has launched a new finance framework that will help them move towards fossil-free steelmaking and invest in more efficient production systems. This framework allows SSAB to raise money through both green and sustainability-linked financing instruments.
What is the New Framework About?
The new framework has two main parts:
Greenhouse Gas Emission Reduction Targets: SSAB has updated its goals to reduce greenhouse gas emissions. These targets have been certified by the Science Based Targets initiative (SBTi), which means they meet international standards to limit global warming to 1.5°C as set by the Paris Agreement.
Green Finance Projects: The framework also sets criteria for what qualifies as a green finance project and how the money raised will be used.
Let's break this down a bit more.
What Are Greenhouse Gas Emissions?
Greenhouse gas emissions are gases like carbon dioxide (CO2) that trap heat in the atmosphere, causing global warming. SSAB aims to cut down these emissions by switching to fossil-free steel production. This means they won't use fossil fuels like coal to make steel anymore, which is one of the largest sources of CO2 emissions.
What is a Green Finance Project?
A green finance project is a project that focuses on environmental sustainability. For example, this could be investing in renewable energy like wind or solar power.
Why is This Important?
Leena Craelius, CFO at SSAB, explained that the new framework is a big step in their journey towards fossil-free steelmaking. By having clear expectations and goals, SSAB ensures their investments will help reduce carbon dioxide emissions significantly.
SSAB is one of the first steel companies to get its carbon reduction targets approved following the new guidelines set out by the SBTi. This transformation in their processes has the potential to remove about 10% of Sweden's and 7% of Finland's total CO2 emissions.
Who Helped in Creating This Framework?
The finance framework was developed with the help of Skandinaviska Enskilda Banken (SEB). An independent firm called Sustainalytics reviewed and ensured that the framework meets various international principles for green and sustainable bonds.
Examples of Projects Under the New Framework
- Developing fossil-free steel production processes.
- Investing in renewable energy projects like wind farms.
- Constructing new facilities that use less energy and fewer raw materials.
About SSAB
SSAB is a steel company based in the Nordic region and the US. They are known for creating innovative and sustainable steel products. Examples include SSAB Fossil-free™ steel, made without using fossil fuels, and SSAB Zero™, which is steel made from recycled materials. SSAB has facilities in Sweden, Finland, and the US, and employs people in over 50 countries.
Key Takeaways
- SSAB has launched a new finance framework supporting their move to fossil-free steelmaking.
- The framework sets ambitious targets for reducing greenhouse gas emissions, certified by the SBTi.
- Investing in green finance projects relates to eco-efficient products and renewable energy.
- Their efforts could significantly cut down CO2 emissions in Sweden and Finland.
With this new framework, SSAB positions itself as a leader in sustainable and eco-friendly steel production, aiming to create a significant positive impact on the environment.
