ArcelorMittal’s report scores well on transparency, but lacks context in some important areas

Contributing to the mining and manufacturing sector’s 1% of all manmade emissions and with more than a quarter of a million workers to keep safe, steel giant ArcelorMittal’s vision of “safe sustainable steel” is both apt and ambitious. But there is still a feeling of reticence in its latest corporate responsibility report.

The report gets off to a promising start, opening with headline figures and a calendar of highlights from the year that includes an upfront acknowledgement of how difficult 2009 was in the face of a 35% reduction in demand.

The introduction from chief executive Lakshmi Mittal tackles the impact of the economic downturn head-on with a frank discussion of the need to reduce headcount by 34,000, which has been impressively achieved entirely through voluntary redundancy and early retirement.

Mittal hails a 24% cut in lost-time incidents but omits to mention the 39 fatalities, which receive only a cursory note later in the report despite the company’s goal to be the safest company in the sector.

The report is refreshingly open throughout about the impact of the economic downturn on the company and its corporate responsibility programmes. However, by the 12th of 50 pages, this begins to feel like an excuse for inaction.

In several key areas, the company appears rather slow to respond. It has only now published an emissions reduction target (8% by 2020), begun developing a human rights policy and put a diversity policy in place to tackle discrimination.

Solid steps forward

That’s not to say ArcelorMittal’s responsible business programmes have ground to a halt in hard times. Some significant steps were taken in 2009: linking executive remuneration to safety performance; joining the Extractive Industries Transparency Initiative; and establishing the industry’s first joint health and safety committee with trade unions. Product innovation also offers some exciting opportunities to make the application of steel more sustainable in the construction and automotive industries.

Stakeholder engagement is clearly a key focus at global and site level. The company views its main stakeholders as those within 10km of each site – an interesting if slightly arbitrary sphere-of-influence model.

A list of stakeholder groups, presented as a wheel, offers an insight into why each one is important to the company and vice versa. Their input is evident in the process behind the report’s materiality matrix prioritising the issues most important to the company.

However, to assess whether the company has identified the right issues, readers need a better understanding of the business than the report offers. There is very little context on what ArcelorMittal does and where it operates. Tantalising titbits are thrown in here and there, such as the fact that 40% of its operations are in emerging markets. But you have to go to the full annual report to find the total number of employees and then be able to assess the real impact of the headcount reduction (just over 10%).

The extent of ArcelorMittal’s mining operations is unclear in the report and it comes as a bit of a surprise to find out that the company mines a large proportion of its own raw materials.

This lack of context is also evident in the discussion of performance, with only two years’ data, little commentary on trends, and a single chart in the entire report. Displaying data graphically and using design to pull the targets out of the dense text would help the reader see progress at a glance.

A personal touch

That said, the report has some nice features. Quotes from executives introducing each section add a personal touch and give a sense of ownership of the issues. These internal views could be complemented with some more challenging external voices.

A snippet from the assurers’ report at the start of each issue section adds an element of credibility, although this is noticeably absent for environment. The sections themselves are set out as a Q&A, adding vitality.

Short country case studies offer a flavour of best practice from the company’s operations in more than 60 countries. Longer case studies on the website show evidence of responding to stakeholders and offer deeper insights into the company’s approach, including a life-cycle analysis of steel.

However, there is very little signposting from the printed report to additional information on the web, which includes quarterly corporate responsibility updates and an interactive site – www.arcelormittal.tv – with videos, blogs and Twitter feeds.

ArcelorMittal may have been slow to reach important corporate responsibility milestones, but there is evidence that momentum is building. As revenues bounce back, perhaps the company will reinforce its progress towards safe, sustainable steel.

Scarlet McBarnet is client director at Context.
Additional reporting by Katie Start, consultant, Context.
scarletm@econtext.co.uk
www.econtext.co.uk

Snapshot

Follows GRI? Yes, index online (including mining and metals sector supplement).
Assured? Assured to AA1000 for the first time.
Materiality analysis? Yes, good description of the materiality process and supporting stakeholder engagement.
Targets? Yes, targets, data and progress could be flagged up more clearly in the text. Summary table at the back of the report.
Stakeholder input? Good description of engagement process. Some stakeholder voices in the report.
Seeks feedback? Not explicitly but CR team contacts provided.
Key strengths? Open about the impact of the economic downturn; calendar of highlights; strong community engagement programme.
Chief weakness? Lacks context on the company, data and trends.
Pleasant surprise? A frank CEO introduction.



Related Reads

comments powered by Disqus