New Delhi: Environmental think-tank iFOREST on Thursday released India’s first ESG (Environmental, Social and Governance) report for the steel industry, introducing a common carbon tracking and reporting system and improving sustainability disclosures.
The report also includes a specific amendment to the Securities and Exchange Board of India’s (Sebi) Business Responsibility and Sustainability Reporting (BRSR), which is designed to improve the quality of disclosures and attract climate finance.
The report comes at a time when the decarbonisation of the steel sector has gained global attention due to the industry’s high carbon intensity and trade barriers being erected by various Western economies, including the European Union, which is implementing the Carbon Border Adjustment Mechanism (CBAM), a carbon tariff on carbon-intensive products such as steel.
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India has already taken steps to reduce the carbon intensity of its steel sector by creating a green steel taxonomy. Implementation of a globally acceptable Greenhouse Gas (GHG) accounting and MRV (monitoring, reporting & verification) framework would be another step towards making the Indian steel industry more environmentally compliant.
“India needs trillions of dollars in climate finance to meet its mitigation and adaptation goals. Three elements are necessary to attract this level of finance. The first is a taxonomy that clearly defines climate finance and ensures transparency of inclusion and exclusion. The second is a clear sectoral decarbonisation policy plan to build investor confidence. The third is a credible, comparable and executive investment decision maker,” said Chief Investment Officer Bhuandra. when running the message.
“Today, our work is focused on the last pillar – transparent ESG reporting for the steel sector. This will strengthen credible disclosure of greenhouse gas emissions and improve the quality of ESG reporting to attract climate finance to the sector,” he added.
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One of India’s most resource and energy intensive industries, the iron and steel industry contributes approximately 12% to the nation’s carbon dioxide (CO₂) emissions. With steel production estimated to increase from 140 million tonnes in 2023 to 255 million tonnes by 2030 and further to 500 million tonnes by 2050, decarbonisation of the sector is critical to India’s 2070 net-zero goals.
At the India Green Steel Transition event in New Delhi, organized in collaboration with industry body Indian Steel Association, iFOREST presented three key reports: BRSR Disclosure: ESG Performance of the Steel Sector (2023-24); BRSR amendment for the steel sector: Improving ESG disclosure and transparency; and Unified GHG Accounting and MRV Framework for the iron and steel sector.
Bhushan said the reporting standards developed by the think tank could be used by both the Indian steel industry and the steel ministry to standardize green processes in the steel sector, which are also being tested globally.
iFOREST’s BRSR analysis included 31 reporting companies representing 65% of India’s crude steel production and 60% of the sector’s revenue. The study found that the industry emitted 221 million tonnes of carbon dioxide equivalent (CO₂e) in FY24, with an emission intensity of 2.54 t CO₂e per tonne of steel, higher than the global average of 1.92 t CO₂e/t. Renewable energy accounts for less than 0.5% of total energy consumption in the sector, with almost half of water withdrawals occurring in water-scarce areas.
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The report highlights persistent social and governance disparities, with women making up 18% of board members and 7% of key management roles in the steel sector and 56% of the workforce employed on contracts. Only 16 companies have formal anti-corruption frameworks.
“The way forward is to develop sector-specific BRSR reporting guidelines that provide credible information to investors. Sectoral GHG emission targets supported by robust MRV systems are essential to meet net zero targets. Along with disclosure, we also need a well-defined taxonomy to guide investments,” said Ajay Tyagi, former chairman of Sebi.
Alok Sahay, Secretary General of the Indian Steel Association said, “Steel in India is not just an industry; it serves a social purpose. The Indian steel industry will require investments of ₹9 lakh crore to fund its environmental initiatives. The Common Framework for GHG and MRV Accounting together with the ESG Supplement released today by iFOREST will play an important role in publishing comparable and verifiable information.”
To address emissions reporting discrepancies, iFOREST has introduced a unified India-specific GHG emissions accounting tool that simplifies and standardizes emissions tracking.
“Sector-specific templates are essential to strengthen ESG reporting in resource-intensive industries such as steel. The BRSR amendment provides a pathway for consistency, comparability and credibility,” said Sanjeev Kanchan, Director of Industrial Decarbonisation and ESG, iFOREST.
