SSAB has introduced a pioneering Green and Sustainability-Linked Finance Framework to drive its transition to fossil-free steelmaking and invest in more efficient, flexible production systems. This new framework enables SSAB to issue green and sustainability-linked financing instruments, or a combination of both.

The framework consists of two key components. First, it integrates SSAB’s updated greenhouse gas emission reduction targets, certified by the Science Based Targets initiative (SBTi) to align with the Paris Agreement’s goal of limiting global warming to 1.5°C. Second, it defines criteria for green finance projects and specifies the use of proceeds. This update builds on SSAB’s Sustainability-Linked Finance Framework from 2021.

“With our new finance framework, we are taking a pivotal step in our transformation toward fossil-free steelmaking and reduced carbon dioxide emissions. The framework contains ambitious, science-based emission reduction targets and sets clear guidelines for our green investments going forward,” said Leena Craelius, CFO at SSAB.

The green finance component includes two categories: “Eco-efficient products, production technologies and processes” and “Renewable energy.”

SSAB recently became one of the first steel companies globally to receive validation of science-based CO2 reduction targets according to the SBTi’s steel sector guidelines published in 2023. These targets are part of SSAB’s strategy to transform its Nordic blast furnace-based production system into fossil-free mini-mills, significantly cutting CO2 emissions from its operations. This transformation is expected to eliminate approximately 10% of Sweden’s and 7% of Finland’s total CO2 emissions.

Skandinaviska Enskilda Banken (SEB) served as the structural advisor for the framework’s establishment, while Sustainalytics provided an independent external review and second-party opinion. Sustainalytics affirmed that the SSAB Green and Sustainability-Linked Finance Framework is credible, impactful, and aligns with several key principles for green and sustainable bonds and loans, including the Sustainability-Linked Bond Principles 2023, Green Bond Principles 2021, and Green Loan Principles 2023 by the International Capital Market Association (ICMA).

Sources: 

https://www.ssab.com/en/news/2024/06/new-framework-for-green-and-sustainabilitylinked-finance 

https://www.tradingview.com/news/reuters.com,2024-06-24:newsml_Wkr46qrq6:0-new-framework-for-green-and-sustainability-linked-finance/