ArcelorMittal SA

ArcelorMittal actively and directly engages with policymakers and organisations that advocate for the policies and conditions that will enable the steel sector to accelerate and achieve its net-zero transition globally while remaining competitive. [...] Engagement with trade associations and other membership organizations plays a key role in our advocacy work, notably in their capacity to aggregate and communicate sectoral input to policymakers and offer feedback on upcoming legislation. Therefore, it is essential that the positions and activities of industry associations are aligned with the Paris Agreement and our broader policy priorities, both for the extensive transition of the market to net zero, and for ArcelorMittal to meet its medium and long-term decarbonization targets. [...] ArcelorMittal has done a periodic assessment of industry associations in 2020 and 2022. The latter involved the assessment of 61 associations because they either had an influential role in climate-related public policy; represented sectors or activities that are relevant to climate change; and/or operated in regions or countries where we have significant business activities. [...] In parallel to this report, we continued to engage with industry associations that were found not to be fully aligned in the past reporting cycle and who's positions have not changed. This is being done by clarifying our policy positions, highlighting our expectations from industry associations, encouraging them to refine their public narrative on policy advocacy and create dialogue between the industry associations and third parties that assess of industry associations (e.g. InfluenceMap). We will continue to engage these industry associations until the publication of our next report, possibly in Q4 2023. We will take that as an opportunity to review our action plan (e.g. potential escalation in the case of misalignment).

Monitoring and Reporting\n\nThe ArcelorMittal Communications and Sustainability team will monitor the key indicators relating to its Stakeholder Engagement Plan (SEP) efforts internally and externally on a quarterly basis. This will include:\n(a) the number of stakeholders engagements completed broken down by stakeholder category and local community, against what was planned.\n(b) the number of activities completed that are designed to support the informed, consultation and participation of vulnerable groups.\n(c) the number of stories concerning ArcelorMittal Dofasco operations covered in the media.\n(d) the number of community grievances raised broken down by gender and affected community.\n(e) the number of community grievances raised that were resolved within the specified target time.\n(f) the number of community grievances that can be classified as having occurred a second time.\n\n--NEW-PAGE--\n\nTo evaluate the continuous success of our ArcelorMittal Dofasco stakeholder engagement, we will monitor our progress using the following qualitative and quantitative methods:\n\n1. Communicate every quarter to our Community Liaison Committee (CLC) quarterly on issues of interest.\n2. Conduct an annual community survey.\n3. Map stakeholder social and environmental areas of interest and concern through an annual Materiality Survey.\n4. Hold quarterly internal meetings to understand the number and types of external grievances filed, outstanding and resolved.

Our government affairs teams globally lead on engagements that impact the steel industry from social factors through to climate change. The Sustainability Committee of the Board meets quarterly to review Sustainability matters of the company. This includes high level policy asks linked to our materials sustainability risks and opportunities. On climate change specifically, the team typically lead on engagement and alignment in accordance to our climate advocacy principles and, in this context, ArcelorMittal works not only with policymakers and trade associations but is proud to work with a range of climate-focused membership bodies and stakeholder initiatives. We are fully committed to conducting all our direct and indirect policy lobbying and advocacy work in line with the Paris Agreement. The Company believes that policy instruments need to deliver five market conditions to ensure that low- and zero carbon emissions steelmaking is at least as competitive as higher carbon- emissions steel: 1. Measures to incentivize the transition to low and zero carbon- emissions steelmaking 2. A fair and competitive landscape that accounts for the global nature of the steel market, ensuring domestic production, import and exports are subject to equivalent GHG reduction regulations and incentives, or other means to level playing field between regions with different climate policies 3. Financial support to promote innovation, ensure decarbonization at scale and make long- term investments and neutralize the higher operating costs of low and zero carbon- emissions steelmaking. 4. Access to sufficient clean energies at globally competitive price levels. 5. Incentives to encourage the consumption of low and zero carbon- emissions steel over higher carbon- emissions steel. ArcelorMittal is actively advocating the climate change regulation agenda in relevant jurisdictions, also focusing on developing significant traction between industry advocacy platforms and governments globally. The Group intends to leverage these experiences to advance its advocacy across other jurisdictions. Engagement with trade associations and other membership organisations plays a key role in our advocacy work, notably in their capacity to aggregate and communicate sectoral input to policymakers and offer feedback on upcoming legislation. In January 2022, ArcelorMittal published its second Climate Advocacy Alignment report which maps the policy positions of the 61 associations of which the Paris Agreement and the five policy priorities outlined above. In addition, in January 2023 the Company published the addendum to the Report. See: https://corporate.arcelormittal.com/media/41dbfuem/arcelormittal-industry-association-report-addendum.pdf In parallel to the report linked above, we continued to engage with industry associations that were found not to be fully aligned in the past reporting cycle and who's positions have not changed. This is being done by clarifying our policy positions, highlighting our expectations from industry associations, encouraging them to refine their public narrative on policy advocacy and create dialogue between the industry associations and third parties that assess industry associations (e.g. InfluenceMap).

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ArcelorMittal is committed to conducting all its direct and indirect policy lobbying and advocacy work in line with the Paris agreement. And we will take action to ensure we are not supporting lobbying that is misaligned with the goals of the Paris Agreement, taking into account ArcelorMittal's level of engagement and level of influence in the industry association. Potential escalation measures include direct communication requesting further alignment with ArcelorMittal policy priorities and the Paris agreement, ensuring ArcelorMittal's financial contribution is ringfenced for non-lobbying activities (e.g. towards standard setting only), and ceasing our membership.

Our activity and progress will continue to be overseen by a robust governance structure that includes an executive-level Climate Change Committee and the board-level Sustainable Development Committee, chaired by our lead independent director. Having set a 2030 group target, we will now link this to executive required to demonstrate its CO2 impact to the Investment Allocation Committee (IAC). The IAC considers both the potential future carbon cost as well as the capital cost of decarbonisation, to maximise our chances of achieving our targets while ensuring each project is economically justifiable and earns its cost of capital. It is a crucial part of our strategy to manage risk and deliver long-term growth. [...] In terms of our investment decision-making, each major capex project proposal is required to demonstrate its CO2e impact to the Investment Allocation Committee (IAC). The IAC considers both the potential future carbon cost as well as the capital cost of decarbonisation, to maximise our chances of achieving our targets while ensuring each project is economically justifiable and earns its cost of capital. [...] The ARCGS oversees the implications of sustainable development issues for the company under five sustainability themes, of which one is climate change. Members of the ARCGS are independent and receive regular training on climate change-related issues. Their experience of sustainability has been gained through their leadership roles in the cement, mining and global consulting sectors. The committee is chaired by the lead independent director on the Board, Mr. Bruno Lafont, who has been a board member of the World Business Council for Sustainable Development for three years. The Committee considers the implications of climate change for the business and oversees the company's strategic planning of resources and investments in response to the risks and opportunities that arise, as well as having oversight of policy and stakeholder trends. It receives regular reports from senior management on stakeholder expectations, the company's low-emissions technology strategy, climate-related policy engagement and carbon performance. Each year the ARCGS Committee spends time undertaking a deep dive on climate change to ensure they remain updated with the latest science, technology and stakeholder developments. The chair of the ARCGS liaises closely with the chair of the Audit & Risk Committee, and provides a summary of its work on climate change to the full Board. [...] Group Climate Council is responsible for informing and shaping the company's climate change strategy, considering both technology and stakeholder relations. Members of the group include VP government affairs, VP corporate communications and corporate responsibility; VP head of corporate strategy; VP technology strategy; CTO Europe, VP climate action Europe, GM, head of sustainability; CMO Global Automotive. [...] The Investment Allocations Committee authorises large capex projects, including those designed to deliver carbon and environmental improvements, and reviews CO2 impact of all proposals. Committee members include EVP and chief financial officer, Mr. Genuino Cristino, chief technical officer, Mr. Pinakin Chaubal, and VP head of corporate strategy, Mr. David Clarke. The IAC reviews the CO2 impact of all projects as part of the evaluation process. For decarbonisation projects in particular, investment project concepts are given the green light at executive level as part of the investment strategy discussed at the Climate Investment Strategy Committee. These are then scrutinised at the IAC which, after the launch of our new global targets, will also ensure that no approved project that is not specifically aimed at decarbonisation, will reduce the company's chances of achieving our CO2 reduction targets.

ArcelorMittal advocates for its relevant memberships to be aligned with the Paris Agreement targets in relation to climate change. Our Government Affairs teams typically lead on engagement and alignment in accordance with our climate advocacy principles and, in this context, ArcelorMittal works not only with policymakers and trade associations but is proud to work with a range of climate-focused membership bodies and stakeholder initiatives. We are fully committed to conducting all our direct and indirect policy lobbying and advocacy work in line with the Paris Agreement and have published updated policies in this regard in-line with the Climate Action 100 Net Zero Benchmark. For further, please refer to our latest Climate Advocacy Alignment report online: [https://corporate.arcelormittal.com/media/news-articles/arcelormittal-publishes-second-advocacy-alignment-report](https://corporate.arcelormittal.com/media/news-articles/arcelormittal-publishes-second-advocacy-alignment-report)

Describe the process(es) your organization has in place to ensure that your engagement activities are consistent with your overall climate change strategy[…]ArcelorMittal is committed to playing a leading role in decarbonising the steel industry and clearly this means we need to actively and directly engage with policymakers and organisations that advocate for the policies and conditions that will enable steel to achieve its net zero transition.
In order to maximise ArcelorMittal's policy influence in this regard, we must be as effective as possible in our advocacy work. We are committed, therefore, to ensuring it is always consistent with the policy objectives outlined at the start of this chapter. This includes both our direct advocacy activities with policymakers and our indirect influence via stakeholder climate initiatives and also our industry associations.
Moreover, on a bi-annual basis, ArcelorMittal has been carrying out a assessment of advocacy engagements with trade associations and other organizations to assess their alignment with the policy priorities necessary for the decarbonization of the steel sector. Assessment criteria include alignment/ support of the Paris Agreement.

Does your organization have a public commitment or position statement to conduct your engagement activities in line with the goals of the Paris Agreement?[…]Yes

Industry Association Report Addendum

Introduction

After COP27, there is no doubt about the commitment most countries have to transition to a resilient, low-carbon economy. Likewise, it is also clear that we are not yet on track to achieve the emissions reduction needed to limit global warming at 1.5°C and avoid the worst impacts of climate change.

Meaningful and purposeful collaboration will be critical to accelerate progress towards these shared goals across all sectors of the global economy. Of particular relevance is how businesses can engage constructively with governments and civil society to create the opportunities to either enhance decarbonization strategies, accelerate technology breakthroughs or advocate for better climate policies.

Policy impacts the framework in which the global economy operates. It has the capacity to drive investment in low-carbon technologies, increase the competitiveness of low-carbon products and shift customer preferences. It ultimately plays an important role in creating the right environment for public and private stakeholders, and society more broadly, to transition to net-zero.

To set ArcelorMittal's CO2 emission reduction targets, we have made a set of key assumptions, including the introduction of climatefriendly policies in the different regions where we operate. Policy is required to address not only the significant capital expenditure needed to transition to zero carbon-emissions technologies, but also the considerably higher operating costs associated with these technologies, and their enabling infrastructure, in their early stages of implementation. Policy instruments, such as contracts for difference used to enable competitive renewable energy, will play an important role in ensuring a level playing field during the transition period. ArcelorMittal actively and directly engages with policymakers and organisations that advocate for the policies and conditions that will enable the steel sector to accelerate and achieve its net-zero transition globally while remaining competitive.

Engagement with trade associations and other membership organizations plays a key role in our advocacy work, notably in their capacity to aggregate and communicate sectoral input to policymakers and offer feedback on upcoming legislation. Therefore, it is essential that the positions and activities of industry associations are aligned with the Paris Agreement and our broader policy priorities, both for the extensive transition of the market to net zero, and for ArcelorMittal to meet its medium and long-term decarbonization targets.

ArcelorMittal has done a periodic assessment of industry associations in 2020 and 2022. The latter involved the assessment of 61 associations because they either had an influential role in climaterelated public policy; represented sectors or activities that are relevant to climate change; and/or operated in regions or countries where we have significant business activities.

This report is an addendum to the full report published in March 2022 "Mapping ArcelorMittal's advocacy alignment with the goal of net zero by 2050". It focuses on 5 industry associations that were highlighted in InfluenceMap's review of our industry associations and that have displayed changes in their positions since our last report.

In parallel to this report, we continued to engage with industry associations that were found not to be fully aligned in the past reporting cycle and who's positions have not changed. This is being done by clarifying our policy positions, highlighting our expectations from industry associations, encouraging them to refine their public narrative on policy advocacy and create dialogue between the industry associations and third parties that assess of industry associations (e.g. InfluenceMap). We will continue to engage these industry associations until the publication of our next report, possibly in Q4 2023. We will take that as an opportunity to review our action plan (e.g. potential escalation in the case of misalignment).

Paris-aligned advocacy

As ArcelorMittal highlighted in its Climate Action Report 2 (CAR2), an important element of our long-term business strategy is to achieve the goals of the Paris agreement through meeting our target of net zero carbon emissions by 2050. One of the key actions to achieve this is to support climate policy that facilitates our sector's accelerated decarbonisation in each of our jurisdictions. In CAR2, we outlined the vital policy conditions needed for the sector and ArcelorMittal to achieve this, as follows:

1. Measures to incentivise the production of zero carbon emissions steel e.g. emissions trading systems, carbon taxation

2. Fair and competitive market conditions to avoid carbon leakage e.g. carbon border adjustment mechanisms

3. Financial support to make long-term investments e.g. carbon contracts for difference

4. Access to sufficient, affordable clean energy

5. Measures to incentivise the consumption of zero carbon emissions steel

Different combinations of the policy conditions described above (hereafter referred to as our policy priorities) can be used to deliver the necessary end result: where the five policy conditions outlined above are achieved, low and zero carbon-emissions steel will be at least as competitive as higher carbon emissions steel and the decarbonisation of steelmaking will accelerate. Currently this is happening at different levels across the main jurisdictions in which we produce steel, as we highlight in the table below.

Methodology

Similarly, to previous versions of this report, we determined the extent of overall alignment for each association in two steps.

• The first step was to assess each industry association's policy priorities and lobbying activities against ArcelorMittal's five policy priorities alongside commitment to the Paris Agreement to determine whether they are broadly consistent with ours, absent or misaligned. Absence of alignment on a policy priority may be due to the nature of the industry association, whereby the policy priority is irrelevant, or because there is lack of consensus amongst the association's membership.

• The second step was to determine whether the overall industry association is: (1) Aligned; (2) Partially Aligned; (3) Not engaged; or (4) Misaligned. The key considerations were whether the associations stated their support for, or had activities aligned with, the Paris Agreement goal to limit global warming to well below 2 °C. If they did not, they could only be categorised as Partially Aligned, Not Engaged or Misaligned, depending on the number of broadly consistent positions. The specific criteria for each category are outlined below:

Alignment

Extent to which the association works towards ArcelorMittal's policy priorities

Aligned

Stated support for the Paris Agreement. No evidence of policy positions or activities misaligned with ArcelorMittal five policy priorities. ≤ 50% of areas where we found no position.

Partially aligned Not engaged Misaligned

Alignment with ArcelorMittal policy positions in some or most areas. No evidence of policy positions or activities misaligned with ArcelorMittal policy priorities. No position on > 50% policy priorities.

No evidence of policy positions or activities on any of ArcelorMittal's policy priorities.

Evidence of policy positions or activities misaligned with ArcelorMittal policy priorities.

Mapping exercise results

Policy priorities

1. Measures to incentivise the production of zero carbon emissions steel e.g. emissions trading systems, carbon taxation

2. Fair and competitive market conditions to avoid carbon leakage e.g. carbon border adjustment mechanisms

3. Financial support to make long-term investments e.g. carbon contracts for difference

4. Access to sufficient, affordable clean energy

5. Measures to incentivise the consumption of zero carbon emissions steel

Industry association

International Federation of Industrial Energy Consumers (IFIEC)

Canadian Chambre of Commerce (CCC)

Paris 1 2 3 4 5 Assessment

Level of engagement: On the board of directors Alignment: partially aligned IFIEC's position is aligned with the aims of the Paris agreement, while maintaining the EU should operate on a level playing field with other, non-EU based competitors1. IFIEC also supports an ETS that both delivers climate targets cost efficiently and supports the decarbonisation of the EU industry, and the introduction of Carbon Border Adjustment as a measure to address the risk of carbon leakage2.

In 2021, IFIEC stated that revision of the renewable energy directive could help industry decarbonise provided access to abundant, competitive secure and low carbon energy and hydrogen is assured, also point out that the revision should create the necessary legal certainty for investment in low-carbon and breakthrough technological solutions3.

In 2022, it strongly supported the EU's increased 2030 GHG target, while again stressing the risk of carbon leakage and impacts on international competitiveness due to unilateral increases in the EU's climate ambition4. Finally, it advocates for carbon contracts for difference to finance breakthrough technologies5.

Level of engagement: Member Committees/ working groups: International Affairs and Liaison Alignment: aligned CCC broadly supports Canada's NDC and climate strategy, while seeing the development of policy recommendations to ensure the decarbonisation of Canadian energy grids as a catalyst for further economic growth and development6. CCC is in favour of government's net zero support (Net Zero Accelerator Initiatives and input tax credits) but calls for more support such as an incentives-based approach to net zero7. It has also recommended the direction of majority of revenues from the carbon tax towards efforts that directly facilitate businesses' transition to a low-carbon economy (e.g. investment in low-carbon processes). In 2022, it also supported a carbon border adjustment mechanism that reduces the risk of carbon leakage, maintains the competitiveness of domestic industries, and drives climate action. It recommended that revenues from such a mechanism be used to support investment in private sector decarbonization initiatives8.

Aligned

No position

Misaligned

Next steps

• ArcelorMittal will remain a member of IFIEC, while we continue to engage on areas where we do not have alignment and that are relevant to its nature.

• By way of this report and other communications, we signal to IFIEC our policy positions and the need for continued alignment in the future.

• Alignment will be periodically tracked, with the aim of reflecting any changes in the industry association's position, and any changes in ArcelorMittal's policy priorities.

• ArcelorMittal will remain a member of CCC, while we continue to engage on areas where we do not have alignment and that are relevant to its nature.

• By way of this report and other communications, we signal to CCC our policy positions and the need for continued alignment in the future.

• Alignment will be periodically tracked, with the aim of reflecting any changes in the industry association's position, and any changes in ArcelorMittal's policy priorities.

1 https://www.ifieceurope.org/fileadmin/Downloads/20151214_IE_Press_Release_Real_action_to_follow_the_Paris_agreement_is_needed.pdf

2 https://www.ifieceurope.org/fileadmin/Downloads/Climate/EIIs_joint_statement_on_ETS.pdf

3 https://www.ifieceurope.org/fileadmin/Downloads/Climate/IFIEC_Europe_final_response_to_RED_18.11.21.pdf

4 https://www.ifieceurope.org/fileadmin/Downloads/Climate/EIIs_joint_statement_on_ETS.pdf

5 https://ec.europa.eu/info/law/better-regulation/have-your-say/initiatives/12228-EU-Green-Deal-carbon-border-adjustment-mechanism-/F2751888_en

6 https://chamber.ca/strategicissues/natural-resources-environment-energy/

7 https://chamber.ca/wp-content/uploads/2022/09/2022-09-15-Canadian-Chamber-of-Commerce-Oil-and-Gas-Sector-Emissions.pdf

8 https://chamber.ca/wp-content/uploads/2022/02/2022-01-31-CCC-Border-Carbon-Adjustments.pdf

asInsodcuisattriyon Paris 1 2 3 4 5

Federation of German Industries (BDI)

South African Iron and Steel Institute (SAISI)

American Iron and Steel Institute (AISI)

Assessment Next steps

Level of engagement: On the board of directors Alignment: aligned The BDI has been mandated with the presidency of the B7, which has the role of consolidating the interests of the business community of the G7 countries and develop concrete and actionable recommendations. The B7 issued recommendations in 2022 focusing on Climate Policy. In which it welcomed the exploration of the "climate club" concept, which aims to accelerate industrial decarbonization while addressing carbon leakage concerns.

The document supports the commitment of all industrial nations to Paris-aligned short and long-term objectives, including reductions by 2030, and to net-zero targets by mid-century, as a condition for a global carbon price910. It also acknowledges that technologies and approaches to expand deployment of diverse energy sources, including renewable energy, are important to meeting climate goals and energy security. In relation to finance, the document argued for scaling up climate finance for developing countries from developed nations, in addition to technical assistance (e.g. through climate partnerships).

The document also called on governments to resolve issue of standards and common definitions for green base materials, including green steel, while also considering appropriate measures (e.g. Green Public Procurement) for the creation of corresponding markets. Finally, the document urged all G7 governments to aim to introduce carbon pricing.

Level of engagement: Member Alignment: aligned In 2022, SAISI adopted the World Steel Association's policy paper "Climate change and the production of iron and steel" which indicates support of the aims of the Paris Agreement. The paper also calls for policy support for the mitigation of first mover disadvantage when it comes to the production of low-carbon steel. This would come in the form of increasing the demand for low-carbon materials and creating a market for low-carbon steel. It also calls on governments to enable access to finance for the transition, and ensuring availability and affordability of low-carbon resources (e.g. hydrogen)11. Some evidence also suggests SAISI supports a carbon tax in South Africa12.

Level of engagement: Member Alignment: partially aligned AISI supports some of the goals of the Paris Agreement around climate change mitigation and energy transition. In February 2022 in comments to the Department of Energy, the association supported the decarbonization of the steel industry by advocating for renewable energy, CCS, and clean hydrogen13, and has expressed support for renewables and nuclear provisions in the Inflation Reduction Act, which would increase financial support available for energy related investments.

As part of its energy and climate change principles, AISI also highlighted the importance of including effective border adjustment in future climate legislation, as well as the adoption of policy that acknowledges that emission reduction is dependent on the development of new processes for steelmaking that significantly reduce GHG emissions by minimizing reliance on carbon-intensive fuels14.

It also it supported the US government's action to stimulate purchasing low-carbon materials for federal projects. In December 2022, AISI published supported the Federal Buy Clean Initiative, which would prioritize lower-carbon construction materials in Federal procurement and federally funded projects15.

• ArcelorMittal will remain a member of BDI.

• By way of this report and other communications, we signal to BDI our policy positions and the need for continued alignment in the future.

• Alignment will be periodically tracked, with the aim of reflecting any changes in the industry association's position, and any changes in ArcelorMittal's policy priorities.

• ArcelorMittal will remain a member of SAISI.

• By way of this report and other communications, we signal to SAISI our policy positions and the need for continued alignment in the future.

• Alignment will be periodically tracked, with the aim of reflecting any changes in the industry association's position, and any changes in ArcelorMittal's policy priorities.

• ArcelorMittal will remain a member of AISI.

• By way of this report and other communications, we signal to AISI our policy positions and the need for continued alignment in the future.

• Alignment will be periodically tracked, with the aim of reflecting any changes in the industry association's position, and any changes in ArcelorMittal's policy priorities.

9 https://english.bdi.eu/article/news/climate-club-as-the-starting-point-to-globally-align-climate-ambitions/

10 https://english.bdi.eu/article/news/b7-climate-policy-recommendations-energy-electricity-gas

11 https://www.saisi.org/steel-industry/environment/

12 https://www.engineeringnews.co.za/article/opinion-south-african-steel-industry-is-an-industry-in-distress-2020-03-06/rep_id:4136

13 https://www.steel.org/2022/09/aisi-comments-on-white-house-buy-clean-announcement/

14 https://www.steel.org/public-policy/energy-and-climate-change/

15 https://www.steel.org/2022/09/aisi-comments-on-white-house-buy-clean-announcement/