Investors Tackle Methane Emissions in Steel Production
Methane emissions in steel production are under scrutiny, with investors like Fidelity International, managing $862bn, addressing the 'emissions testing near me' issue due to its investment risk. The warming potential of methane is 84 times greater than carbon dioxide over 20 years, making it a significant short-term 'climate change' concern. Steel, crucial in the energy transition, accounts for 8% to 27% of lifecycle emissions when including methane from metallurgical coal extraction.
Fidelity International, along with Aware Super and Royal London Asset Management, is piloting a systems-level approach in Australia to tackle methane emissions in steel value chains. Historically, methane's financial materiality was overlooked, referred to as the 'methane blind spot'. The initiative focuses on three pillars: corporate engagement, data transparency, and policy advocacy. Regulations like the EU's methane monitoring requirements and Australia's Safeguard Mechanism are creating cost pressures, increasing the financial materiality of methane. The goal is to enhance the visibility of 'climate change' risks, align investment decisions with long-term sustainability, and accelerate the transition to greener steel production.
The initiative aims to make methane emissions a systemic risk in the steel sector, encouraging corporates to set ambitious reduction targets, improving data transparency, and advocating for supportive policies. By addressing methane emissions, investors can better manage 'climate change'-related risks in their portfolios and contribute to a greener energy transition.
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