After ArcelorMittal issued two bonds totalling EUR 1 billion last Friday, civil society groups including frontline communities from Mexico, Liberia, and South Africa are calling on banks and investors involved in the deal to end unrestricted finance for the steel giant.

The deal comes amid fresh criticism of ArcelorMittal’s recently announced decision to delay final investment decisions on its green steel projects in Europe.(1) BNP Paribas, Credit Agricole, Citi, Goldman Sachs, HSBC, Intesa Sanpaolo, and Natixis are listed as underwriters on the bond issuances.

“​​Slowing climate change is our goal as citizens of the earth—and banks are not listening to our call to put people and their livelihood over their profits. The banks’ support in destroying the earth by giving ArcelorMittal carte blanche financing to continue polluting the atmosphere with increased volume of greenhouse gasses from its coal use is unacceptable and condemned in no uncertain terms!” said John Brownell of Green Advocates and the Fair Steel Coalition.  

Due to its reliance on coal for steelmaking, ArcelorMittal’s 2023 carbon footprint of 114.3 million tonnes of carbon dioxide equivalent (MtCO2e) is comparable to that of Belgium.(2) ArcelorMittal has pledged to transition away from coal towards climate-compatible steel production processes and has already secured €3 billion in public aid, and a €5.5 billion sustainability-linked credit facility to do so.(3) However, in mid-November, ArcelorMittal announced it will pause its final investment decisions for hydrogen based Direct Reduced Iron (DRI) plants in four European Countries, citing an insufficient policy landscape.

Banks are increasingly setting their own targets to decarbonise their steel lending portfolios. Six out of the seven underwriters have a steel decarbonisation target for their lending portfolios (BNP Paribas, Crédit Agricole, BPCE, Citi, HSBC and Intesa Sanpaolo), but only HSBC includes underwriting activities within the scope of its target. 

“Providing unrestricted debt to a steelmaker which treats climate action as a ‘nice to have’ rather than a fundamental necessity is dangerous and risky behaviour. The banks underwriting this deal are playing fast and loose with our future,” said Julia Hovenier, Banks and Steel Campaigner at BankTrack. 

Notes

1. ArcelorMittal delays green investments in Europe over policy uncertainty, Financial Times, 26 November 2024
2. ArcelorMittal Corporate Climate Assessment 2024, SteelWatch, 8 May 2024 
3. ArcelorMittal amends US$5.5bn Revolving Credit Facility to align with its sustainability and climate action strategy, ArcelorMittal, 30 April 2024