While decarbonizing the steel sector is of the utmost urgency, ArcelorMittal is still dragging its feet. Although repeatedly emphasizing its commitment to decarbonization, its actions tell a different story. Investors should be seriously concerned about the signals that ArcelorMittal is sending regarding its climate action – or rather, its climate inaction. From delaying to not allocating enough resources to decarbonization projects, its contradictions raise serious doubts about the sincerity and feasibility of its climate commitments. Investors must demand a robust climate strategy – starting with the long-overdue Climate Action Report 3 (CAR3), which must include a commitment and a timeline to phase out coal across its global operations.
When publishing its last climate commitments in 2021, (1) ArcelorMittal pledged to reduce CO2 emissions by 25% at the group level – 35% in Europe – by 2030, and to achieve carbon neutrality by 2050. Not only does this offer no guarantee of alignment with a 1.5°C climate scenario, (2) but signs of climate backtracking have accumulated from the company in recent months.
In past years, investors – for instance as part of the Climate Action 100+ initiative, or the French Sustainable Investment Forum – have submitted written questions to ArcelorMittal on its decarbonization strategy. (3) Yet, in its responses, the company still fails to provide a clear commitment to phase out coal in its operations.
ArcelorMittal’s actions speak louder than its shiny claims
Although in its communications ArcelorMittal keeps pretending to be a decarbonization leader – for instance by priding itself in being a partner of the Paris Olympic and Paralympic games and building the Olympic torches with recycled steel – its actions tell another story. In late 2024, the company delayed investment decisions on its European Hydrogen based Direct Reduced Iron (HDRI) projects, meant to replace coal-based blast furnaces, (4) citing the Carbon Border Adjustment Mechanism (CBAM) review as a factor. The company’s executive chairman complained about profitability in the Financial Times, (5) but ArcelorMittal received at least €3 billion in public subsidies from EU governments to see these projects through. (6) On top of this, despite being the biggest industrial CO2 emitter in Europe – emitting more CO2 than Denmark – ArcelorMittal also received €3.8 billion in free allowances. (7)
Civil society has voiced concerns about these delays. (8) These actions may be seen as political maneuvering for EU subsidies. Moreover, ArcelorMittal has faced project delays in Spain and France even before this announcement. (9) Investors must seriously question what lies behind these announcements and make sure that ArcelorMittal adopts a credible climate transition strategy. SteelWatch points out that the company’s CEO declared remaining committed to net zero in 2050, but failed to mention anything about 2030, although science is clear that emission cuts will be needed by 2030 and 2040. (10)
Furthermore, ArcelorMittal’s lobbying practices at the EU level still seem to be misaligned with climate imperatives. Indeed, analysis by Influence Map reveals that ArcelorMittal’s advocacy and positions on a number of EU policies was strongly in favour of carbon capture, use and sequestration in 2024, and were not aligned with IPCC science. (11) Investors must question support for these technologies, as they not only sustain metallurgical coal use but are also proven ineffective for decarbonizing the steel sector.
A financial strategy at odds with climate imperatives
Alarm bells should be ringing for ArcelorMittal’s investors when looking at the company’s financial strategy. In its Q4 earnings release, (12) published on February 6 2025, ArcelorMittal has made significant cuts for its decarbonization projects, with only US$0.3-0.4 billion out of the US$4.5-5 billion of planned capital expenditures in 2025 to be spent on decarbonization projects. (13) Research by Friends of the Earth Europe and SOMO reveals that ArcelorMittal’s CAPEX investment rates in decarbonization projects are far below the average of publicly listed European firms in key energy transition sectors. (14)
Another worrying signal that ArcelorMittal sent to its financiers has been to drop ESG terms from a US$5.5 billion revolving credit facility it refinanced in May 2024 according to data compiled by Bloomberg. (15)
ArcelorMittal also seems to be selective in the information it presents to its investors. For instance, although separate climate targets have been set for the joint venture with Nippon Steel in India (AMNS India), ArcelorMittal expanded the scope of its earnings to include income from this joint venture. This means that profits from AMNS India are accounted for but not carbon emissions. (16) Another example is the 50% reduction in absolute emissions that ArcelorMittal presented to its investors in its latest earnings report. This number is highly misleading, as the group’s emissions intensity has barely moved and is still at 1.96tCO2/t of steel, (17) still above industry average. (18) Furthermore, this reduction in absolute emissions can be largely attributed to a decrease in total production due to the shedding off of assets in different countries since 2018. This includes in Kazakhstan (19) and Italy (20) where governments took over following mining accidents which led to the death of 50 people in Kazakhstan, (21) and legal and financial troubles in Italy. (22)
ArcelorMittal’s investors have been patient enough. The last version of its climate action report dates back to 2021, and it hasn’t been updated since then. Investors cannot afford to wait after a company that refuses to demonstrate genuine climate commitments. It is time for them to leverage their influence to push ArcelorMittal towards true climate leadership. They must demand the publication of CAR3 before the next annual general meeting (AGM), ensuring it presents strong climate commitments, including a clear, time-bound plan to phase out coal across all operations, geographies, and joint ventures. If ArcelorMittal fails to deliver a robust CAR3, investors must demonstrate their commitment to climate action by holding the company accountable at the next AGM through written and oral questions and votes against director reelections.
