Tata Steel: Quantifying environmental impacts to prioritize actions

Tata Steel aspires to be the global steel industry benchmark for value creation and corporate citizenship. As such, we have developed a comprehensive strategy that extends to all aspects of the business.

Steel making is energy intensive and highly dependent on natural resources like iron ore, coal and water. This significant resource footprint cuts across the steel value chain. By applying the Natural Capital Protocol (NCP), we wanted to quantify the environmental impacts arising out of its operations to prioritize actions to reduce and mitigate negative impacts.

We piloted the NCP in full at our operations in Jamshedpur, India which constitute 90% of the turnover. Applying the Protocol’s framework helped put a monetary value to the environmental impacts we’ve been measuring for some years.

We used the value transfer method for our valuation approach. Our senior management supported the assessments as a means of guiding future investments and becoming more transparent as a company.

Natural Capital Protocol used
  • Yes
Impact drivers assessed
  • GHG emissions e.g. volume of CO2, CH4, N2O, SF6, HFCs and PFCs etc.
  • Non-GHG air pollutants e.g. PM2.5, PM10, VOCs, NO, NO2, SO2, CO, etc.
  • Solid waste e.g. volume of waste by classification, materials constituents or disposal method
  • Water pollutants e.g. volume discharged to receiving water body
  • Water use e.g. volume of ground- or surface water consumed
Organizational Focus
  • Project
Valuation Type
  • Quantitative
  • Monetary
  • Value to society
Geographical Scope
  • India
Value Chain Boundary
  • Direct operations
Sectors
  • Mining and Metals

Key findings

We consider this an evolving subject, and as such, we connected with PwC (UK) to build sufficient capacity within Tata Steel. We trained close to dozen people on NCP framework and concepts.

While we had a sense of our operations’ impacts on air, water and land, this assessment helped us prioritize the most important environmental impact drivers. We found that GHG emissions contribute about 97% of total impact, followed by water (~2%) and solid wastes (~0.5%). We also found the materiality process of the NCP very helpful to prioritize the impact drivers for natural capital assessments.

In the next phase, we intend to value our dependencies to better understand our supply chain vulnerability. We will also continue to explore the use of the NCP to evaluate different project options. We suggest that it would be very useful to develop a sectoral supplement for the metal and mining sector, like the sector guide for food and beverages, finance and apparel. 

More information

Madhulika Sharma (madhul@tatasteel.com) Chief Corporate Sustainability