We have expanded the list of climate policies we assess company engagement with to incorporate land-use related policy, referring to legislative or regulatory measures to enhance and protect ecosystems and land where carbon is being stored. Assessments under this category are currently underweighted in terms of their contribution to the overall company metrics. This weighting will be progressively increased over the next 6 months.
We adjusted the terminology used to describe the queries running down the left-hand side of our scoring matrix and added additional explanatory text to the info-boxes. This has no impact on the scores and methodology. It has been done following user feedback to improve clarity.
Climate Policy Engagement Overview: The Korea Iron and Steel Association (KOSA) appears to highly negative engagement on climate change policy in South Korea. The association has expressed a mixed position on climate policy in South Korea through its top-line messaging, but it has engaged negatively with specific climate-related regulations, in particular regarding the increased 2030 National GHG emissions reduction target of South Korea, the Korea Emissions Trading Scheme (K-ETS), and the EU Carbon Border Adjustment Mechanism (EU CBAM).
Top-line Messaging on Climate Policy: The Korea Iron and Steel Association (KOSA) has taken mixed positions in its top-line messaging on climate policy. In the association’s November 2021 Steel Paper, KOSA presented an ambiguous position on raised ambition for South Korea’s national GHG emissions reduction target and achieving carbon neutrality by 2050, emphasizing the challenges involved in the steel sector’s transition. In February 2021, the corporate members of KOSA signed a joint declaration of 2050 carbon neutrality, stating their support for the national net-zero emissions target and transformation in the industry, but without stating a position on near term actions to reduce GHG emissions.
Engagement with Climate-Related Regulations: The Korea Iron and Steel Association (KOSA) engages negatively with specific climate regulations in Korea, as well as the EU CBAM in Europe. In October 2021, the Head of the Department of Climate, Environment and Safety of Korea Iron and Steel Association did not support the upward revision of the 2030 National GHG emissions reduction target and the 2050 Carbon Neutrality scenario, citing difficulties in meeting targets and suggesting that such regulations would impede energy transition. As reported by Chosun Biz in October 2021, KOSA also opposed a GHG emissions reduction target of 35% or higher, citing concerns that it would affect steel industry production. KOSA did not seem to support the K-ETS in its November 2021 Steel Paper, arguing that the K-ETS should be reformed to reduce industry ‘burden’ and that additional emissions allowances should be allocated to the steel industry. The association opposed the EU CBAM in its December 2021 Steel Paper, claiming that the regulation would cause economic and administrative burden on steel export companies.
Positioning on Energy Transition: The Korea Iron and Steel Association (KOSA) has taken mixed positions on the transition to a low-carbon energy mix, citing concerns about its impact on the steel industry. In November 2021, Byun Young-man, the Vice Chairman of KOSA, stated support for zero emissions in the steel industry through hydrogen-reduced steel technology, but without clarifying his position on decarbonizing hydrogen production. In its November 2021 Steel Paper, KOSA expressed concerns about the feasibility of reducing GHG emissions and transitioning within the steel sector in the short term.