Why Conduct Environmental and Social Due Diligence in the Iron and Steel Industry?
Businesses that prioritise their environmental and social compliances have witnessed an additional competitive advantage in their respective industry as it creates opportunities for them to leverage investors, customer support, and loyalty from people who uphold environmentally friendly and sustainable practices in high regard. At the same time, this allows you to discharge your legal obligations while experiencing an enhancement in your reputation and brand value all at the same time. Allow Corpbiz to help you strike these two birds with one stone.
If you are ready to change the trajectory of your business by incorporating ESDD in your business strategy, then at Corpbiz, we have vast compliance experience, and we particularly specialise in streamlining the ESDD and ESG processes for our clients. We offer ESDD Services that include comprehensive support and guidance from our bespoke team of experts, along with assistance in completing and submitting the mandatory Documents to the concerned authorities. We are known for guaranteeing compliance and accelerating the approval procedure while ensuring customised solutions and timely submissions.
What are the Roadblocks in ESDD in the Iron and Steel Industry?
In order to discuss the roadblocks in ESDD in the iron and steel industry, we first need to acknowledge that increasing global concerns over climate change are putting an increasing emphasis on sustainability. Therefore, in order to keep up with the growing awareness of environmental worries across the globe, conducting environmental and social due diligence in the iron and steel industry has also become quite imperative.
However, this is easier said than done, as the stakeholders involved in the iron and steel industry often face certain obstacles while endeavouring to integrate ESDD norms and practices into their business operations. The iron and steel industry has contributed tremendously to the nation's economy and provided livelihood opportunities to millions. Due to these reasons and many more, stringent efforts are required to promote environmental and socially ethical practices in the industry.
If you are a business that is interested in conducting environmental and social due diligence in the iron and steel industry, then you have landed at the right place. With constant developments happening in this industry, the government has taken various initiatives to increase the monitoring levels as well as to ensure compliance. An ESDD Compliance enables you to do just the same! However, enterprises involved in the iron and steel industry have to overcome numerous challenges while attempting to ensure ESDD compliance, some of which are:
Financial Challenges Associated with the Iron and Steel Industry
The iron and steel industry is a capital-intensive sector. Research suggests that in order to set up 1 tonne of steel-making capacity, approximately INR 7,000 crore is required; therefore, the cost of financing any new steel capacity is usually very high and requires a lot of investments. Particularly in India, the cost of finance is extremely high compared to the cost in developed countries such as China, Korea, etc. The cyclical nature of the industry also adds to the financial risks and burdens of the entities involved in the industry; hence, there are fewer investments made in the sector as compared to the other sectors.
In their struggle to stay afloat or remain profitable, the additional burden of hiring a full-time in-house team to comply with environmental and social norms can add up to the total cost of manufacturing and production, which becomes a relative disadvantage as opposed to your counterparts.
Complex Regulations in the Iron and Steel Industry
The regulatory authorities have placed a myriad of rules and regulations to safeguard the environment and society that need to be taken care of while running a business in this industry. But that's not all! These already complex rules and regulations often keep getting amended or changed to keep up with the times; thus, it becomes quite arduous for small stakeholders to interpret all applicable regulatory compliance without any professional guidance or expert knowledge, and they often end up making inadvertent mistakes, which leads to adverse legal or pecuniary consequences.
Inadequate Data Collection
One of the other major challenges faced by entities in conducting environmental and social due diligence in the iron and steel industry is in assembling appropriate data, which is often due to the unavailability of proper resources, tools, and adequate technology. The data the enterprises are able to collect is often fragmented; hence, there is an urgent need for professionals and specialists who can facilitate the effective collection of standardised data, as improper data leads to inaccurate analysis, which can cause even greater troubles for your enterprise.
Now, if you are looking for help getting environmental and social due diligence conducted, particularly in the iron and steel industry, then look no further! At Corpbiz, we acknowledge that these challenges can be quite arduous, and mitigating these, if more often than not, is not a simple undertaking; however, the same can be seamlessly achieved with the help of professionals and experts. We invite you to join hands with Corpbiz so that we can help you come up with pioneering solutions that can be central to promoting sustainable and ethical practices.
Why Should You Consider Hiring ESDD Consultants?
If you are wondering whether or not to hire ESDD consultants, then let us tell you that the iron and steel industry has the potential to participate in the circular economy without compromising quality because of its high strength and capacity for reinforcement. In fact, over the last few decades, the iron and steel industry has put efforts into reducing carbon emissions; however, it is also among the most energy-intensive sectors, producing around 8 per cent of all Co2 emissions.
With the world taking measures for decarbonisation across sectors, lowering these Co2 emissions is crucial for the iron and steel industry as well. Therefore, those who want to enhance the sustainability of their business operations can benefit from ESG and ESDD indicators to gain a competitive advantage and stay ahead of changing regulatory domains. Implementing environmental and social due diligence in the iron and steel industry can lead to positive impacts such as:
Enhanced Investments in the Iron and Steel Industry
Enhanced investments in the iron and steel industry have become a possibility with the exponential increase in environmental and social concerns, which has led to stringent rules and regulations across sectors; investors are now looking for ecologically friendly portfolios. The reason is that these investors also want their potential investment targets to comply with ESG regulations. With the implementation of carbon tax regimes, the government has been trying to decarbonise industries to ensure that environmentally friendly practices are followed in order to achieve the SDG and zero net carbon targets.
Therefore, apart from legal requirements, improving ESG and ESDD measures will benefit entities involved in the iron and steel industry overall. These recognised investors make it a point to use the ESDD metrics prescribed to identify the enterprises that have more sustainable models and stronger ESG performance as they lower operational risk and are more adaptable to future developments. Thus, investing in environmental and social due diligence in the iron and steel industry can be a huge incentive for the businesses concerned as it helps them attract capital and investments.
Enhanced Reputation & Brand Value
ESDD compliance is no longer a voluntary measure but has become obligatory. In fact, it is more than just compliance, as it helps compliant businesses garner support from investors and customers who value transparency and accountability. With the world becoming environmentally and socially conscious day by day, discharging your ESDD obligations effectively will help enhance your reputation & brand value in the market and gain an added competitive advantage in the corporate race. It is a tool that can be employed to showcase your commitment to corporate responsibility and sustainability. Thus, by continuously investing in improving ESDD reporting mechanisms and embracing technological advancements, pharmaceutical companies can showcase their commitment to sustainability and lead the industry by example.
Saving Cost with ESDD Consultants
Apart from these, there is another benefit that an enterprise can enjoy by outsourcing environmental and social due diligence in the iron and steel industry, which is that it allows an opportunity to save redundant costs that you might face while ensuring ESG and ESDD compliance on your own. You may wonder about having your in-house team; however, hiring such a team leads to additional costs such as maintaining them on payrolls, providing them training from time to time, distributing benefits, etc., which you are completely exempted from in case you outsource these services to a consultancy firm like ours. Therefore, outsourcing these ESDD and ESG Services allows you to not only access professional guidance but also helps you save unnecessary long-term costs.
However, the problem is that ESDD compliance is a multifaceted obligation, and thus, it becomes difficult to discharge these without any professional guidance. Therefore, businesses and entities involved in the iron and steel industry often outsource these environmental and social due diligence services to ensure proper and effective compliance in order to avoid any involuntary failures.
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ESDD Consultant Services in India
For businesses looking to conduct environmental and social due diligence in the iron and steel industry, Corpbiz's ESDD Consultant Services in India provide a variety of benefits. By engaging our ESDD Consultants, you can enjoy the following services:
Assistance in Identification & Assessment of Risks
The whole purpose of conducting ESDD is to identify and assess the risks associated with your business operations so that you can mitigate them well in advance. However, entities either turn a blind eye towards the risks attached to their business ventures or simply cannot locate them due to the inherent bias and conflict of interest involved.
Therefore, an impartial assessment is what is required in order to identify the potential and veiled risks attached to a particular business activity or a prospective investment, and that is where our team of experts steps in and helps your business to asses and identify the environmental and social risks involved, which may eventually cost you a limb therefore, in order to avoid that get access to our ESDD Consultants and Industry Experts who will help you without leaving any stone unturned.
Comprehensive Risk Management Plans
Analysing and identifying the potential risks associated with your business ventures or operations alone will not suffice; you are additionally required to have comprehensive risk management plans and programmes in place to alleviate these concerns, which can cause future problems for the investors as well as you. We at Corpbiz understand that it is almost impossible to completely eliminate the probabilities of these environmental and social risks, and we do not make such exaggerated claims, but what we do claim is that we can help you have effective risk management plans in place so that you can swiftly cope up with such risks under our expert guidance.
ESDD Reporting
After analysing and identifying these risks and further formulating and implementing risk management plans, the enterprise is required to make sure that all ESDD obligations get duly discharged. An important aspect of the same is ESDD reporting, which is labelled as a critical element of performing environmental and social due diligence in the iron and steel industry. Our team of seasoned experts and ESDD Consultants can help you with ESDD Reporting by providing outstanding, comprehensive and accountable ESDD Reports that will be sufficient proof of your commitment to sustainable corporate practices.
Comprehensive Regulatory Compliance
In addition to ESG and ESDD compliance, we also provide comprehensive regulatory compliance services to our clients. As discussed, the iron and steel industry is monitored and regulated by several laws and regulations. With relentless amendments and changes, the process of compliance can get daunting for the businesses concerned. Our team specialises in all kinds of regulatory compliances and licensing associated with numerous industries, thereby enabling you to stay ahead of every recent regulatory development.
Corpbiz - Your Trusted Partner for Environmental and Social Due Diligence in the Iron and Steel Industry.
Reasons to Team up with Corpbiz
Let us give you some additional reasons that will motivate you to choose Corpbiz as your partner:
Explore Environmental and Social Due Diligence
If you are wondering what environmental and social due diligence is after all, then let us begin by explaining Due Diligence first. Due diligence is known as a process of exercising proper and reasonable care before deciding to invest in any business venture or operation. It has become tremendously integral in corporate decision-making and formulating corporate strategies, as this ensures that the business plan is as per the prescribed standards and regulations.
In a world that is becoming increasingly concerned with environmental and social issues, a subcategory of due diligence, which is Environmental and Social Due Diligence (ESDD), has gained attention. In their pursuit to align themselves with the prescribed rules and regulations, it has become imperative for the business to consider investing in ESDD to ensure sustainability along with profitability.
Now, coming back to Environmental and Social Due Diligence refers to a process of examining and assessing the environmental and social impacts of a business's operations and practices. This helps them to appraise newfangled investments or projects by identifying the possible risks and liabilities associated with them, thereby allowing them enough time to adopt mitigation strategies well in advance to save future costs and losses.
Need for Environmental and Social Due Diligence in the Iron and Steel Industry
Over these years, with the growing environmental concerns, the iron and steel industry has made efforts to reduce carbon emissions, and the same has been recognised as well. However, a closer look will reveal that most of these positive effects have been possible due to the technological innovations and advancements made and introduced to the existing production processes, but this will not suffice. The industry will have to do much more than this in order to reduce its carbon footprint going forward, which also makes us contemplate the unsustainable practices that are being followed in the industry.
The increase in the usage of iron and steel over these years has been so exponential that they are present in almost every aspect of our lives. Apart from its rampant usage, steel is also among the most recycled materials in the world and, thus, can easily become a part of the circular economy; however, its production process tends to require a large amount of energy in the form of high temperatures. Hence, the iron and steel industry, apart from being one of the largest consumers of energy, emits huge amounts of carbon dioxide, accounting for around 6 per cent of greenhouse gas emissions. It is one of the most polluting and energy-intensive industries as steel is produced in huge blast furnaces for which traditional fossil fuels, such as coal, oil, etc., are used abundantly to catalyse the required chemical reactions.
With increasing global concerns regarding climate change, investors, customers, and regulators are increasingly demanding this industry take sustainable measures and reduce its carbon emissions. To help this process, enterprises will have to break down age-old patterns and explore opportunities to finance environmental and social due diligence in the iron and steel industry in order to achieve the desired goals.
How Significant is the Iron and Steel Industry in India?
The significance of the iron and steel industry in India is apparent from the fact that India is known to be the second-largest producer of crude steel in the world, with a productivity of 125.32 million tonnes of crude steel in 2023 and a finished steel output of 121.29 million tonnes. The industry is expected to grow 4-7 per cent to 123-127 million tonnes by next year. In the last decade, the steel industry in India has expanded significantly, as reports suggest that production is up by 75 per cent, since 2008, which was then followed by an 80 per cent increase in the domestic demand.
After all, increased production and use of iron and steel is often seen as a measure of the economic development of a nation. Therefore, the government of India has also been taking effective measures to boost the growth in this sector; for instance, under the Union Budget of 2023-24, the government allocated INR 70.15 crore (USD 8.6 million) to the Ministry of Steel. Furthermore, the industry has been witnessing the merger of stakeholders, which has attracted increased investments from other sectors. The continuing consolidation also provides an incentive for global investors to enter the Indian market.
Amidst all this growth, the question arises about the sustainability of these operations in the iron and steel industry, as various reports have suggested that the steel sector emissions contribute around 12 per cent of the total in the country. That is to say that every tonne of steel produced in India produces 2.55 tonnes of emissions against the international average of 1.85 tonnes. All these numbers look enticing and demonstrate that the iron and steel industry in India will be experiencing further growth. But with these increased opportunities for growth, there is a need for some intensified monitoring as well. Therefore, participating in environmental and social due diligence in the iron and steel industry becomes imperative to incorporate the adverse effects of prospective business operations.
Why Ensure ESDD Compliance with Corpbiz?
You can consider ensuring ESDD compliance with Corpbiz because of its extensive experience and strong presence in the legal and environmental domain. By choosing Corpbiz for environmental and social due diligence in the iron and steel industry, you can unlock an array of benefits that will enable your business or company to thrive in today's ultra-competitive world. Our team of veteran experts bring extensive knowledge and years of experience to the table for you, and due to them, we have a proven track record of 99.8% proficiency in conducting environmental and social due diligence in the iron and steel industry.
Our team at Corpbiz stays abreast of all the changes and amendments in rules and regulations to ensure your business remains compliant in order for you to avoid any inadvertent slipups and failures. We maintain stringent ethical standards and, therefore, promise to provide you with top-notch services and valuable insights.
Our success-focussed approach allows us to serve a wide client base, as we have successfully emerged as a one-stop solution platform for all minds of business queries and problems, so in case you want to deliberate and learn more about Environmental and Social Due Diligence Services in the iron and steel industry, please don't hesitate to contact us.
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Get ready to attain excellence in environmental and due diligence practices. Contact us at9121230280to discuss how Corpbiz can help you achieve success in the iron and steel industry. Join us in building a sustainable future for the iron and steel Industry in India.
Frequently Asked Questions
Yes, the steel industry is eco-friendly in the sense that steel is among the most recycled materials in the world and, thus, can easily become a part of the circular economy; however, its production process tends to require a large amount of energy in the form of high temperatures.
There are several ways in which we can reduce pollution from the iron and steel industry, such as using cleaner processes for the production of iron or steel, installing pollution control equipment to treat pollutants, reducing dependence on non-renewable sources of energy and switching to cleaner fuels, ensuring proper and effective disposal of hazardous waste, etc.
Some of the risks associated with the iron and steel industry are mechanical risks, electrical risks, toxic gas exposure risks, fire & explosion risks, temperature exposure risks, chemical exposure risks, etc.
The environmental aspect of the iron and steel industry, apart from being one of the largest consumers of energy, is that it emits huge amounts of carbon dioxide, accounting for around 6 per cent of greenhouse gas emissions. It is one of the most polluting and energy-intensive industries as steel is produced in huge blast furnaces for which traditional fossil fuels, such as coal, oil, etc., are used abundantly to catalyse the required chemical reactions.
The reports have suggested that the steel sector emissions contribute around 12 per cent of the total emissions in the country. That is to say that every tonne of steel produced in India produces 2.55 tonnes of emissions against the international average of 1.85 tonnes.
Environmental and social due diligence refers to the process of discovering a company's environmental and social policies and the risk factors involved therein. This information is then utilised to look for less risky investments, mergers and acquisitions, etc.
The iron and steel industry of India is known to be the second-largest producer of crude steel in the world, with a productivity of 125.32 million tonnes of crude steel in 2023 and a finished steel output of 121.29 million tonnes. The industry is expected to grow 4-7 per cent to 123-127 million tonnes by next year.
Environmental and Social Due Diligence (ESDD) is undertaken by following various steps such as identifying the risks and liabilities attached to the business venture or investment made, scrutinising the scope of assessment, collecting relevant data, designing risk mitigation strategies, formulating ESDD reports, and lastly, implementing the strategies so formulated.
