Fidelity Tackles 'Methane Blind Spot' in Steel Industry to Reduce Climate Impact
Fidelity International, a global investment firm managing $862bn, is tackling methane emissions in steel value chains due to their significant financial and climate change impact. Traditionally, methane's role in steel investing was overlooked, a phenomenon dubbed the 'methane blind spot'.
Methane's warming potential over 20 years is 84 times greater than that of carbon dioxide, making it a critical short-term climate change intervention. Fidelity's approach aims to frame methane as a systemic risk, providing asset owners with a comprehensive framework to address such risks.
The firm is collaborating with corporates like British Steel, GFG Alliance, and ArcelorMittal, along with policymakers and innovation players, to invest in methane abatement technologies and promote transparency. Regulations such as the EU's methane monitoring requirements and Australia's Safeguard Mechanism are creating cost pressures in steel supply chains, further driving this climate change initiative.
Incorporating methane emissions from metallurgical coal extraction increases the proportion of lifecycle emissions from steel to 27%. Fidelity is piloting a systems-level approach to address methane emissions in the Australian steel market, with the goal of reducing these emissions and enhancing the sector's sustainability.
Steel, a vital material in the energy transition, is being targeted by Fidelity International to reduce its methane emissions. By addressing this 'methane blind spot', the firm aims to mitigate climate change risk, enhance sustainability, and create long-term value for investors.
