Nippon Steel’s feeble climate plan challenged ahead of AGM

Tokyo, Japan, 31 May 2024 - World number four steel producer, Nippon Steel, is failing to meet international standards and falling behind its competitors on climate action, due to its focus on coal-based steelmaking.

According to a new report from the international advocacy group, SteelWatch, Nippon Steel is going into its 2024 Annual General Meeting without any sign that it is planning to significantly decarbonise its production processes. The company's stated plans leave it far off-track for emissions reduction in line with the 1.5C climate scenario, and it's pursuing its current feeble targets by closing blast furnaces not shifting to cleaner production.

SteelWatch modelled how Nippon Steel’s CO2 emissions (excluding associated EAF mills and overseas assets) would compare between now and 2050 in three different scenarios: “business-as-usual”, “stated policies”, and a SteelWatch proposed “green transition.” (1) The  analysis shows that the company’s climate decarbonisation strategy is completely inadequate for it to claim it’s doing its part to stabilise the climate.

While it continues to prioritise coal-based production, Nippon Steel is facing increasing pressure from shareholders about its climate commitments. Ahead of the Annual General Meeting (AGM) taking place on 21 June, shareholder proposals are demanding the company “protect the long-term interests of shareholders by improving its decarbonisation strategy and disclosures on climate“ (2).

The proposals have been co-filed by investor engagement group the Australasian Centre for Corporate Responsibility (ACCR), Corporate Action Japan (CAJ) and one of Europe's largest asset managers, Legal & General Investment Management (LGIM), and they are the first publicly filed shareholder proposals on Nippon Steel's climate plans since the company announced its carbon neutral roadmap in 2021.

“Nippon Steel’s climate strategy is too little, too late, and represents a danger both for the global climate and for the company’s own future. Nippon Steel has ambitions to massively expand in the US and beyond, but the company simply cannot expect to be a serious player on the world stage with such a paltry decarbonisation plan. The shareholder resolution for the coming AGM shows that investor scrutiny is starting and we only expect it to increase, so Nippon Steel is going to have to shift,” said Caroline Ashley, Executive Director of SteelWatch.

Nippon Steel touts its plans for COURSE50 and Super COURSE50 when asked about decarbonisation, but as the new SteelWatch report shows, these are false solutions that perpetuate coal-based production and unacceptable emissions.